5 ways to boost your Agency’s Efficiency

What is efficiency? Does It depend on whom you ask?

With the passage of the Affordable Care Act (ACA) in 2010 the concept of efficiency in health care has become a mainstream issue. With the issue of efficiency in mind, one  must determine what is efficiency? An economist would  
define efficiency as “a relationship between ends and means. When we call a situation inefficient, we are claiming that we could achieve the desired ends with fewer means, or that the means employed could produce more of the ends desired.”1 Therefore, if one’s goal were to produce a widget, efficiency would be measured by the amount of resources needed to produce that widget. Therefore, the least possible amount of resources needed to produce the widget would represent efficiency. As production becomes more resource intensive without gains in quality, or level of efficiency decreases.  

In health care, one does not trade in widgets, rather it is people and their wellbeing that health care as an industry must try to maintain efficiently. However, experience in measuring efficiency in health care teaches us that this is a difficult task.  Firstly, efficiency is a relative term and ultimately depends on the context as to what elements of health care delivery are being valued. Payers, plans, consumers and providers all look at efficiency from a different perspective as to what constitutes efficiency. For example, a variety of interventions can be used to manage a disease. From the standpoint of each of these stakeholders, there will be different interpretations of risks, benefits, and overall efficiency. A payer may believe that a particular intervention would represent an efficient way to manage a disease given their emphasis on cost containment, however a consumer may have a differing opinion and believe that efficiency may be obtained by investing more money in the intervention given that the disease can be managed effectively.  further making the question of efficiency in health care more complicated. For example, a 1999 article published in the British Medical Journal illustrates this dilemma.  

Health care can be seen an intermediate product, in the sense of being a means to the end of improved health. Efficiency is concerned with the relation between resource inputs (costs, in the form of labor, capital, or equipment) and either intermediate outputs (numbers treated, waiting time, etc.) or final health outcomes (lives saved, life years gained, quality–adjusted life years (QALYs))…Ideally, economic evaluations should focus on final health outcomes.

Given this analysis, one can state that efficency in healthcare is ideally dictated by clinical outcomes. Therefore, efficient delivery of care should seek to obtain the best health outcome possible without wasting resources. Herein lies the problem, the US health care system is plagued with waste. Dr. Rita Redburg best illustrates the scope of this problem in a 2012 commentary for the Institute of Medicine.  

The United States health care system (public and private sector) he United States has the most technologically advanced health care system in the world. Although we spend far more on healthcare than any other country in the world, we perform poorly on many health measures…It is estimated that hundreds of billions to $1 trillion or more goes to waste annually—health care spending that does not contribute to the well-being of patients.

Given our health care system’s rather dismal record in efficiency (the effective translation of time and cost into the desired output) what can be done to fix this problem (or at a minimum make it less of a problem)? Some problem areas in health are delivery can be identified that one can apply to some different care settings. This lesson applies hospitals, ambulatory clinics, long-term care facilities and home health care providers equally. With this in mind, the following keys represent specific ways home health care providers (and providers in other care settings, as well) can boost their efficiency.  

1.Manage Supply Costs :

 One of the key aspects of reducing the cost of care without sacrificing clinical outcomes is managing supply costs. Agency’s can effectively monitor their performance in this area by examining the cost per patient day in order to determine if supply costs can be cut without sacrificing quality.  

2.Improve Operational Workflow:

Lost employee productivity contributes to the cost of care. For example, home health caregivers report that over 50 percent of their time is spent documenting the visit.4 By cutting down the time needed to administrative tasks more time can be devoted to quality of care. Using technology including electronic health records and electronic care management can reduce time spent on documentation and improve quality and efficiency.   

3.Reduce Revenue Interruptions:

Time spent a dressing audit risk can detract from valuable time devoted to quality of care. Reducing audit risk and streamlining audit response can pay large dividends in efficiency. With less staff time devoted to audits and the risk of revenue interruptions from audits efficiency can be improved.   

4.Use Health IT To Identify Waste:

health care technology can provide significant insight  into area in which resources are being wasted in the process of delivering care.  

5.Manage Staffing to Improve Efficiency:

Adjust staffing roles to reduce interruption due to hand offs, promote teamwork among care teams and monitor staff travel patterns in order to reduce the time spent reaching patients.  

The main takeaway-efficiency matters in health care. It directly affects a set of relevant variables, the ability to effectively translate inputs (time, money, and resources) into outputs (more affordable services for consumers, more profitable services for providers and most importantly high quality care.  For example, if your local coffee shop operated like our health care system, relying on a range of estimates our health care system experiences waste at about 18-30%. Let’s say to be fair, waste is 25%, in other terms 25% of the input into producing a health care output is for naught, it does not contribute to the intended goal of improving health. Back to the coffee shop example if you are the owner of said shop and your barista spills 25% of the beans needed to make a pot of coffee, firstly the output (coffee) will not be of the intended quality, secondly in order to achieve the intended result more resources will need to be pumped in to achieve the desired outcome. For coffee shop, owners or those concerned about the quality of home health care services efficiency must be a top priority when evaluating organizational performance.