Hospitals Cut Back When They Should be Streamlining

We’ve all read about some of the realities driving the push for change in healthcare: It costs too much, there is a lot of waste, hospitals need more capacity, there are too many errors, too many unnecessary deaths, and so on.

As if those weren’t enough, here’s another: Half of the nation’s hospitals are losing money, according to an article in the Los Angeles Times quoting an analysis by Thomson Reuters.

Hospitals typically get a big chunk of their income from investments, and that income has shrunk dramatically due to the stock market collapse. But that’s not all.

Paying admissions declined as people put off elective procedures and insurers tightened their grip on the length of hospital stays they covered. And the number of patients without insurance or the means to pay their part of the bill began to rise.

Hospitals are responding with cutbacks.

As a result, 47% of the hospitals surveyed expect to make staff cuts, and 69% plan to cancel or delay equipment purchases, according to the survey by Novation, a company that manages supplier contracts for hospitals.

That is not surprising, but it is disappointing. It might be possible to avoid, or at least minimize, cutbacks if hospitals were applying lean approaches to eliminate waste and increase capacity.

If only more of them realized that.

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