Financial Costs to Hospitals from Complications

In today’s world with the intersection of healthcare and economics in the spotlight, there is huge pressure on hospitals to reduce spending. With sometimes uncertain reimbursement, keeping costs low is vital to maintain both healthy patients and a healthy budget. Reducing patient length of stay and limiting complications from procedures and the resulting fallout have both been major targets for potential savings.

Costs and the length of time that a patient spends in a bed are directly related, and this is only compounded in already high cost areas such as the ICU. A study published in 2013 created a financial model that projected savings for hospitals from the implementation of an early physical rehabilitation program in the ICU. The program directly reduced patient time in the ICU by advanced physical preparation for discharge. Based on the rehabilitation program at the Johns Hopkins ICU, the researchers projected net savings from the earlier release time at hundreds of thousands of dollars per hospital even providing for varying ICU sizes.

Length of stay or subsequent readmission is often the direct result from procedural complications, and these complications are also highly costly. One of the most common complications are surgical site infections (SSIs) which occur in approximately 2% of surgeries. Research suggests that per patient, an SSI can cost a hospital over $20,000 extra and another 10 days of in-hospital care. Compounded nationally, SSI runs a price of approximately $1.6 billion with an extra 900,000 days of extended stay, with about half the cost due to SSI caused readmission. Other costly surgical problems include improper anesthetic use or disposal. The purchasing of anesthesia medications or other anesthesia services is a significant portion of surgery costs, but research has found that excessive waste of useable anesthetics costs between$13-30 per surgery. It may not seem like much per surgery, but nationally this runs a cost of $350-750 million a year, so well-regulated anesthesia management services could conserve funds for hospitals.

Finally although mortality is not a savory topic to consider when planning hospital budgets, it does have a substantial impact on hospital revenues. A recent study found that an increase in mortality rate of 0.01-0.02% was significantly related to revenue reductions of 19% per dollar. A better bank account for a hospital is indeed related to better patient care.

Reduced costs are vital for a hospital’s survival in today’s political climate towards healthcare. In order to provide the best possible patient care, a hospital needs the necessary funds, and it cannot depend solely on procedure prices. The reduction of big spenders like readmission or extended stays from complications or quicker discharge is a valid way for hospitals to better balance their budgets.

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