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A growing challenge: Hospitals operating in a cost-constrained environment

Access the full article by The Economist Intelligence Unit here  

Chris Steel, head of the US healthcare practice and global head of healthcare at PA Consulting Group is quoted in an article which examines the growing cost challenges facing hospitals in the US.

The article notes that across the US, hospital executives are under pressure, with mounting cost concerns. It states that the good news however is that technology can maximise staff capabilities and help address a number of cost concerns. 

In particular, hospitals are reviewing staffing expenditures. Chris says that: “If you can have a nurse practitioner in a critical access hospital operating at the top of his or her license instead of having a physician there, that’s going to save a considerable amount of money and address a staff shortage."

It goes on to assess whether economies of scale could reduce costs and also improve care quality. Rather than patients going to one venue to see their physician and another for their surgeon, many hospitals are bring these services together. 

“You’ve got better collaboration and faster-moving processes and thus reduced costs. That’s an approach being adopted with the added advantage that it’s better for patients,” Chris adds.

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The article goes on to assess the telemedicine model which can cut the cost of other hospital functions, such as the pharmacy. Chris notes that: “Telehealth and other virtual solutions are only viable as long as there’s a clear path to return on investment. And with e-pharmacy, there is that path.” 

He concludes by saying that new payment models will strengthen the business case for telemedicine. “One of the blockers in bringing in virtual technologies has not been technology itself but the fact that it’s been hard to get reimbursed for the consultations. That’s changing in many states.” 

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