By: Darrel Hicks
Hospitals and health systems have repeatedly confronted a range of financial and operational challenges, including historic volume and revenue losses as well as skyrocketing expenses. When coupled with rising inflation and growth in input prices, these expense increases have been severely detrimental to hospital finances, leading to billions in losses and over 33% of hospitals operating on negative margins.
When I read a headline in a hospital business journal like Becker’s Healthcare, that declares that “Hospital X’s operating loss grows to $201M against revenues of $1.25B,” I must ask why? The hospital declares that they need to find operational efficiencies and layoff a bunch of staff to stem future losses. This begs the question why didn’t they look for these operational efficiencies and right size staffing before they lost all this money?
Hospital and Healthcare Systems administrators and CFOs are running their hospitals at a loss – as a percentage of top line revenue like that of the one described above.
One service provider stated, “I showed one of them how they could save $400,000 per year by having their probes repaired by us rather than simply exchanging them for new ones direct from the OEM. They responded, ‘my $96M problem isn’t going to be solved by saving $400,000 – I have much bigger issues to focus on.'”
“I was tempted to say something snarky, but the calmer side of me prevailed. The truth is this hospital did not lose $92M all in one transaction… it was the aggregate of sub-optimal buy decisions in virtually every department within the hospital. There was, and continues to be, a culture of making the easy decisions not the right decisions.”
Start making the right decisions
Hospitals and Health Networks says that sustainability can reduce costs, reduce risks, and promote a positive public perception. Furthermore, by serving as community leaders in sustainability, hospitals show that they recognize the impact that improperly handled waste can have on public health.
On June 30, 2022 the Biden-Harris Administration announced that 61 of the largest U.S. hospital and health sector companies responded to the Administration’s Health Sector Climate Pledge, committing to reduce greenhouse gas emissions 50% by 2030. The new commitments represent over 650 hospitals and thousands of other providers across the country, and include plans to strengthen resilience to climate change, protect public health, and lower costs. The health care sector accounts for 8.5% of U.S. emissions, so these bold commitments advance President Biden’s goal to reduce nationwide greenhouse gas emissions 50-52% in 2030 and reach net-zero emissions in 2050.
There is a German idiom that states, “Don’t throw the baby out with the bath water.” This is an avoidable error in which something good is eliminated when trying to get rid of something bad, or in other words, rejecting the favorable along with the unfavorable. The challenge in front of hospital leaders is to continue meeting the healthcare needs of their community by remaining financially viable while meeting their climate pledge. The opposing forces between preserving the bottom-line AND reducing greenhouse emissions are strong.
This should not be a binary choice between two very worthwhile goals. When looking at privacy curtains for example, it is possible to:
- Convert from reusable, launderable, curtains to recyclable: A 400-bed hospital can save $100k+ annually
- Reduce curtain changing labor by 90%
- Keep EVS staff off ladders (no more OSHA regs to follow)
- Enhance your infection prevention efforts
- Gather real-time data on curtain exchanges to match your facility’s protocols
- Improve patient throughput (“Room Dirty” to “Room Ready” turnaround times when curtain exchanges are necessary)
- Improve patient satisfaction (no more torn mesh, unhooked grommets, wrinkles or “mysterious spots or stains,” curtains too short or too long, etc.)
- Give patient care spaces a clean/fresh appearance
- Reduce your carbon footprint by eliminating #5 blue wrap and other single-use disposables (SUDs) by recycling curtains along with all your other waste that would otherwise go to the landfill
In closing, if you are looking an easy solution for your $96M problem, we can’t help you. However, if you want the RIGHT solution along with lean workflows for your Environmental Services Department, your patients, and your staff, you have 9 reasons to follow this link to contact us at KleenEdge.
