Factors Affecting Hospitals’ Operational Efficiency
Hospitals have various kinds of operational expenses. It ranges from staff salaries to debt payments. One of the most significant cost-heads is the procurement of medical supplies. In fact, it is the second largest expense constituting approximately one-third of a hospital’s total cost of operations (TCO). Conventional procurement systems (mostly offline ones) have multiple limitations when it comes to transparency in supply chain and product knowledge. Lack of channels for product information leads to uninformed purchases where hospitals end up buying mediocre supplies at disproportionate prices which results in poor patient care. Also, considering the aspect of time, offline procurement is very time consuming as medical centres have to contact multiple vendors and deal with numerous quotations. Dr Anupam Karmakar, CEO of D.Y. Patil Hospitals said, “Procurement of supplies is a major expense category. It has to be handled carefully otherwise it can have an effect on both patients and operational costs.” Organisations such as Medikabazaar can help hospitals adopt a digital/online approach in their procurement process which can help them make informed purchases of quality medical equipment at cost-effective prices. This, in turn, will make healthcare affordable for patients and also help hospitals in saving approximately 30 per cent of their operational expenditure.
Another cause of operational inefficiency is interdepartmental miscommunication. Doctors tend to write prescriptions in a poor handwriting or even non-standardised abbreviations, which results in the administration of incorrect medicines or care to the patients. Many times even telephonic orders by doctors are not vetted later for correct execution and this often results in injuries and death. Doctors even take consent for granted and many times important procedures are changed without informed consent.
This invites several medico-legal complications due to which hospitals have to spend a lot on getting legal aid. According to a report named, “To err is human,” by the Institute of Medicine (IoM), out of 44,000 preventable deaths caused due to medical errors, 7,000 have been attributed to bad handwriting. A recent example can be taken from a hospital in New Delhi where a patient who was supposed to be given a medicine named Duodil (an analgesic), but due to the doctor’s poor handwriting was administered Daonil (diabetes medicine). The patient suffered convulsions due to low blood sugar levels. These kinds of errors can be avoided if doctors prescribe medicines legibly in capital letters. Appropriate screening mechanisms can also be established to ensure adherence. With regards to this, Dr Vipin Checker, a renowned gynecologist and president of Association of Medical Consultants, said, “Communication is the key to effective patient care.”
An important metric of a hospital’s efficiency can be a patient’s average length of stay (ALOS) at the facility. Studies have revealed that for-profit ALOS of hospitals is 4.64 days while the non-profit ALOS stands at 4.75. If hospitals see that their ALOS for patients is more than the benchmark numbers, it can be deduced that the facility is mismanaging their resources. In many cases medical establishments tend to extend the stay of patients out of fear of not getting new patients. However, what they don’t acknowledge is the fact that, because of overextension, process to achieve these benchmarks, different hospitals have varying methodologies to diagnose/ treat patients with similar illnesses. Here, regulating standards such as the ones existing in NABH (for example, just one standard of NABH, MOM 13 for standardising procurement can save upto 30 per cent of opex costs through streamlined procurement processes) and ISO 9001 can provide hospitals with a roadmap on how to formulate effective operational processes and conduct regular and stringent checks in place.
“Hospital leadership teams have to be aware about benchmarks like staff to bed ratio, earning metrics, and ALOS so that they have a grip on effective care and eliminate wastage at all levels,” stated Dr Akash Rajpal, EVP, Marketing and Product Management at Medikabazaar who has earlier been the COO of Jaslok Hospital & Research Centre, Mumbai.
There are problems as well as solutions. However, to realise the problems and gradually solve them, more awareness coupled with proactive initiatives must be the central focus for hospitals, if they want to provide quality patient care in a cost-effective manner. To conclude, all hospital administrators have to remember that hospitals are places where ‘customers’ do not want to visit. And if they do visit, they want to exit the facility as fast as possible after getting the appropriate treatment. Hospitals unlike other business entities are unique in a sense that their goodwill only increases when their customers (patients) don’t have to take their services often, and therefore, it becomes all the more important to make hospitals more efficient to ensure timely, effective and affordable care.
