By Lumeon
One would think an industry that represents some 18% of U.S. GDP would be on solid financial footing. But healthcare as a business is far from stable. In fact, many provider organizations are in crisis.
How is that possible?
There are several contributing factors, including financial pressures (a big basket comprising numerous issues), waste (both time and money), and staff shortages and burnout.
On the financial side, healthcare industry consulting firm Chartis assessed the first quarter of 2023 for healthcare providers as “a mixed bag.” Research analyst Floyd Pitts noted that “for-profit systems like HCA Healthcare and Tenet Healthcare performed relatively well and have optimistic forecasts for 2023,” but the same cannot be said for many not-for-profit healthcare providers. Pitts wrote that “initiatives to increase revenues at health systems include improving patient access for elective procedures and finding ways to reach into target growth markets, including via partnerships.” Concurrently, efforts to reduce operating costs “include implementing new and creative approaches to tackle workforce shortages and reduce costly contract staffing…”
As for waste in healthcare, the data is startling. In a whitepaper produced by Chilmark for Lumeon earlier this year, the authors cited a study led by Dr. William Shrank of Humana, which “estimates that the U.S healthcare system wastes up to $935 billion annually.” In addition, Chilmark wrote, “According to a 2019 study in JAMA, 30% of US healthcare spending can be considered wasted spending. The study found that failures in care delivery accounted for $102.4 billion to $165.7 billion and that the failure of care coordination accounts for $27.2 billion to $78.2 billion of the wasteful spending or at least 17% of total waste.”
With regard to staffing constraints at healthcare provider organizations, a recent report from the U.S. Surgeon General, referenced by Chilmark in its whitepaper, highlights the factors causing burnout and the overall impact on patients and access to care. Chilmark writes, “A leading factor is the ever-growing administrative burden that clinicians are faced with. The administrative burden creates a disconnect between the mission of medicine that attracts professionals to the field and the actual practice of clinical medicine, according to the report.”
In short, there’s a lot on the table for healthcare as an industry, and complex dynamics to boot, but there is a potential solution that care orchestration – a type of clinical workflow automation — represents for many of healthcare’s vexing problems.
Given the magnitude of the issues facing healthcare, to have a meaningful impact any proposed solution would have to be deployable at scale and deliver massive benefits at scale. Such is the case with care orchestration: for example, $28 million could be saved per hospital per year by implementing orchestrated surgery preparation – and that’s just one specific use case for care orchestration technology.
To learn more about today’s healthcare crisis, and the role automated care orchestration can play in helping to solve it, download Lumeon’s infographic.