Tuesday, June 22, 2010

The Latest Victim Of Recession: Hospital Safety

For years, hospitals have been considered recession-proof. They have survived during many turbulent economic times in the past. Most people thought that this most recent recession would be no different even though it has been a major one. Well the vulnerability of hospitals to economic distress has finally shown itself according to a new study published in the May/June issue of the Journal of Hospital Medicine. The study was a joint effort by the University of Michigan Health System and the St. Joseph Mercy Health System.

It appears that even though the economy has been terrible for an extended period, relatively few hospitals are closing down. Instead they are all reacting to the economic downturn by laying off staff, halting new construction projects and finding various other ways to improve efficiency and contain costs. Still, more than half of the hospitals in the U.S. reported negative margins in 2008.

All of these hospitals reported decreases in revenue from all sources; patient revenue, investment earnings and donations. Driving the decrease in patient revenue is the fact that many Americans have lost their jobs completely, or at least their health insurance. The number of managed care and private insurance patients has dropped significantly for many hospitals.

When hospitals start losing money on the bottom line, it usually does not bode well for patient safety. Understaffed and under financed hospitals are rarely safe. There certainly are ways for hospitals to improve efficiencies without compromising patient safety. In fact some efficiency efforts can actually improve safety and quality. We at Compirion help hospitals do this every day. But it must be done correctly. Issuing edicts to cut a certain level of costs simply because the bottom line has vanished will not work. There must be a well documented plan based on eliminating wasted efforts and materials, not just on cutting costs. If you need any assistance with this we would be happy to come assess your situation at no cost to you.

Hospital can survive this economic crisis but we must make sure that they do not do so at the expense of patient safety.

More on this later.

Mark Brodeur

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