By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    healthy hobbies
    The Importance of Hobbies for Our Health
    September 15, 2024
    Whiplash
    Understanding Whiplash: A Guide For Healthcare Practitioners
    January 22, 2025
    research chemicals and health care
    Chemical Research Drive Medical Breakthroughs
    June 14, 2023
    Latest News
    7 Most Common Healthcare Accreditation Programs: Which Should You Use?
    August 20, 2025
    Hospital Pest Control and the Fight Against Superbugs
    August 20, 2025
    Hygiene Beyond The Clinic: Attention To Overlooked Non-Clinical Spaces
    August 13, 2025
    5 Steps to a Promising Career as a Healthcare Administrator
    August 3, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    Hospitals and Providers Using NHIN (Nationwide Health Information Network)
    March 11, 2012
    Image
    Physicians With High Productivity And Satisfaction Scores Employ Strong Patient-Centered Communication Skills
    May 7, 2013
    My Solution to the Healthcare Crisis
    March 31, 2012
    Latest News
    How Social Security Disability Shapes Access to Care and Everyday Health
    August 22, 2025
    How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
    August 22, 2025
    How One Fall Can Lead to a Long Road of Medical Complications
    August 22, 2025
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Hospital Budget Problems? Break Down Costs With Smarter Software
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Hospital Administration > Hospital Budget Problems? Break Down Costs With Smarter Software
eHealthHospital AdministrationTechnology

Hospital Budget Problems? Break Down Costs With Smarter Software

Larry Alton
Larry Alton
Share
8 Min Read
Hospital Budget Problems? Break Down Costs With Smarter Software
SHARE

Why is healthcare so expensive in the United States? Everyone has a go-to reason, but if you look at the inner workings of any hospital, it quickly becomes evident that waste is a big player in high medical bills – and some departments are guilty of more waste than others. In fact, this reasoning extends to all medical practices, including traditional primary care offices and even nursing homes. What’s the reason for all of this waste?

Contents
  • Parsing The Budget
  • The Power Of Prediction
  • Too Much Tech – Or Too Little?

In many cases, waste is a result of two key factors. First, waste is an attempt to prevent infection. By simply getting rid of everything that has even been near a prior patient, even if unused, doctors assume they lower the risk of infection or error. The second reason is protocol. It’s become standard to set-up operating or procedure rooms with specific tools – doctors have documents similar to celebrity riders that lay out their preferences – and no one can question these protocols. It’s just not done.

Still, as healthcare continues to dominate the airwaves, cost has also become a hot-button issue and hospitals are sitting up and paying attention. In response to public outrage and investigations into wasteful healthcare practices, hospitals are turning to assessment software in hopes of cutting the fat.

Parsing The Budget

Logic says that if you want to cut costs, look for where the greatest budget overruns are because this is where there’s leverage, but in order to do this, hospitals need to parse expenses down to the finest details. That’s where assessment technology comes in.

More Read

engagement
7 More Simple Secrets to Engagement, Action and Sharing
Five Ways to Reduce Errors in Pathology Synoptic Reporting
5 Ways Healthcare Providers Can Reduce Costly Hospital Readmissions
3 Factors Fueling Growth in Mobile Health Apps
Business Analytics Cures: How BI Is Used for Healthcare

Some hospital expenses are subject to minimal tracking, at least at the enterprise level. This is particularly true of purchased services, which may include third-party transcription, waste disposal, staffing, and even clinical services such as dialysis. In fact, according to HealthTrust, purchased services may amount to as much as 30% of hospital spending. Without tracking these purchases, however, hospitals can’t consolidate and negotiate for lower costs or identify when internal execution would be more cost-effective.

Project portfolio management (PPM) software can help bridge the gap between purchased services costs and available funds. For example, the PPM Meisterplan tracks overall finances as well as individual project expenditures. For further efficiency, it can reassign workers based on skills to complete tasks in a more efficient, expert, and cost-effective manner, making it a triple-win.

The Power Of Prediction

When asked about waste, doctors often justify acts of excess with a simple excuse – “you just never know.” In other words, tools are opened and set out and never used because of the tiny possibility those implements could be needed. Patients tell tales of being charged for hospital personnel they never met, and when they complain they are met with the explanation, “well they had to be present just in case.” While hospitals should be prepared for serious eventualities, there must be a way to do so with less waste.

In fact, there is a way to embrace preparation and limit excess; it’s called predictive analytics. Predictive analytics software can identify thousands of risk factors within a hospital, including surgical complications and medical interactions, as well as environmental factors, and assess the likelihood of different outcomes.

One example of technology-assisted risk management can be seen in an unlikely place: the laundry room. Linen laundering is a topic of serious concern in hospitals, particularly among infection preventionists, because linens can harbor harmful bacteria and spread disease. Therefore, when choosing a linen service, hospitals need to consider not only the price per pound of laundry, but also whether the chosen linen service provides high-quality cleaning. Savings on laundry can quickly endanger the budget if substandard procedure spreads disease, but careful analysis can balance the financial and medical interests of a hospital.

Too Much Tech – Or Too Little?

Whenever hospitals discuss spending overruns, there are always people who suggest that the problem is really technology. By relying on new technology, the individuals argue, and therefore purchasing countless new machines and devices, hospitals are unnecessarily driving up costs. But is this really true?

According to research Robert Graboyes, technology itself isn’t the problem. In fact, in terms of sheer computing power, American spend far less on technology today than they did in prior decades. Rather, Graboyes says that American healthcare costs more in large part because we are wealthier than ever and have committed a greater portion of that income to medical treatment. It’s largely a question of priorities.

Returning to the example of purchased services, then, we can see how technology is a friend rather than a foe in the fight against overspending. Using improved classification technology and enterprise-wide management, consultants can be mandated to classify all charges. Historically, consultants have only categorized, on average, 80% of services, even though hospital standard is 95%. Central services can deny payment for uncategorized services or work with consultants to determine barriers to categorization based on this data.

Finally, the particularly American ethos that accepts enormous amounts of waste as normal is a major contributor to high healthcare costs. Nursing homes, for example, throw away hundreds of millions of tons of perfectly good medication each year. Hospitals toss equipment without a second thought. And despite the millions of people who can’t access adequate healthcare, these products go to the incinerator.

Why do practices do this – and what can we do to stop it? There are several options, but the most obvious choice is to make internal policy changes. Data collection and analysis can help fuel this. Many doctors don’t realize the scale of medication waste because they aren’t directly involved in tossing pill packets or staplers. But presented with a chart of all wasted materials, many could be convinced to make changes. Using simple analytics software, waste can even be broken down by department, placing doctors in competition with each other to reduce waste. The data creates a record and doctors can’t argue with the numbers.

Ideally, all hospitals should use enterprise software across all departments for tracking expenditures and other data, as this allows for centralization and internal policy reform. But hospitals should remember: this is data driving costs down – or at least it has the potential to if used properly.

Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

travel nurse in north carolina
Balancing Speed and Scope: Choosing the Nursing Degree That Fits Your Goals
Nursing
September 1, 2025
intimacy
How to Keep Intimacy Comfortable as You Age
Relationship and Lifestyle Senior Care
September 1, 2025
engineer fitting prosthetic arm
How Social Security Disability Shapes Access to Care and Everyday Health
Health care
August 20, 2025
a woman explaining the document
How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
Public Health
August 20, 2025

You Might also Like

health technology
eHealthSocial MediaTechnology

Mapping the Patient Journey with Advanced Social Intelligence

June 13, 2013
Dr. Ryan Greysen, pictured on right, in a hypothetical photo demonstrating what type of online physician behavior could prompt state boards to investigate. (Image used with permission by Dr. Ryan Greysen.)
Social Media

Doctors and Social Media – Two Photos Which Could Prompt State Boards to Investigate

January 24, 2013
Medical Devices

Here Is Everything You Need To Know To Purchase A New MRI Machine

September 25, 2019

Rise of People Power or Arrogance of the Academy?

April 29, 2011
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?