About half of adults in the United States say it is difficult to afford healthcare costs. That’s no surprise given that annual healthcare spending has reached $13,493 per person.
Hospital costs are some of the highest in the U.S. healthcare system. The average per-day hospital cost is $2,883, and the average stay is 4.6 days, resulting in an average cost of $13,262. Even when healthcare consumers are equipped with insurance, these expenses often are unaffordable.
What is the Biggest Expense for Hospitals?
Labor costs account for nearly 60 percent of the average hospital’s expenses. Such costs increased by more than $42.5 billion between 2021 and 2023 to a total of $839 billion, in part due to roughly $51.1 billion spent on contracted staff.
Behind labor costs and expenses for supplies (13 percent) are drugs at eight percent. Hospitals spent $115 billion on drug expenses in 2023 alone.
It’s not only expenses causing a negative financial impact on hospitals. Since the start of 2022, the number of days cash on hand for hospitals and health systems has declined by 28.3 percent.
5 Ways Hospitals Can Reduce Costs
Hospital administrators know that it is imperative to combat high costs to remain financially sustainable. Many utilize technology to do so. In this blog, we’re highlighting one of the newest of these digital health tools — conversational artificial intelligence (AI) — and how it’s helping hospitals improve patient care while optimizing operational efficiency.
1. Streamline Administrative Tasks
Hospitals and their associated health systems consist of a lot of moving parts that must work together to run smoothly. Along with treating individuals in the emergency department and through inpatient care and same-day surgeries and other procedures, most hospitals offer imaging and pharmacy. Additionally, primary and specialty care offices continue to provide care for patients after discharge.
Non-clinical hospital staff play an important role by scheduling appointments for follow-up care, filling and refilling prescriptions, conducting insurance verification and prior authorization and handling other administrative responsibilities. Patients lead busy lives, though, and sometimes forget about an appointment, even if it is for their health.
Missed appointments by patients because of no-shows and cancellations do more than lead to a loss of expected revenue, costing the industry $150 billion annually. They typically lead to longer wait times for other patients, lower satisfaction, wasted resources, reduced productivity and clinical effectiveness, added stress on staff and an overall decrease in the quality of care.
However, healthcare providers actively working to minimize no-shows can reduce them by up to 70 percent. Appointment reminder types shown to be effective include phone calls, email and text messaging. Phone calls — including live calls, automated messages and interactive voice response calls — specifically have been proven to reduce no-shows.
Secure conversational AI meets patients’ expectations for a seamless healthcare experience while reducing the administrative burden on staff. Used for patient reminders, it has been shown to increase the completion of recommended preventive care and improve prescription refill rates.
2. Combat Staffing Shortages
Nearly 30 percent of healthcare workers are considering leaving their profession altogether. Just like their physician and nurse counterparts, allied healthcare professionals experience high levels of stress and burnout.
More than 65 percent of hospitals and healthcare systems report that they have run at less than full capacity at some time over
the past year because of staffing shortages. That means there are fewer staff members to handle routine patient inquiries, triage patients and direct them to the appropriate care setting.
In addition to combating these staffing issues with contact labor, a growing number of healthcare providers are expanding their digital health capabilities. These tools have been adopted to minimize the pressure on allied healthcare professionals while also increasing the time clinicians can spend bedside. They are not designed to replace staff but instead enhance their ability to focus on more meaningful work and less time on repetitive tasks.
By employing conversational AI, hospitals are able to support allied staff by managing inbound call volume, automatically notifying patients of test results and providing education on next steps. The secure technology also can be used to collect patient information, including insurance, medical history and medication allergies.
3. Digitize Test Results and Lab Reports
Laboratory results can take anywhere from a few minutes to a few weeks to come back. That waiting can be frustrating and even scary for some patients, depending on the severity of what such results might show.
Using conversational and text-based AI allows health systems to securely deliver test results as soon as they’re available and signed off upon, notifying patients accordingly. This not only increases patient satisfaction but also lessens phone tag between patients and staff and reduces unnecessary paperwork and office visits.
Receiving test results and laboratory reports through conversational AI often prompts patients to book appointments for follow-up care. For healthcare organizations, this results in improved patient experience and increased revenue.
4. Enhance Revenue Cycle Management
Delivering high-quality patient care is the goal of every hospital, but they cannot do that without making money. Strong revenue cycle management is crucial for increased cash flow, improved patient satisfaction, fewer denials and decreased administrative burden. Conversely, inefficiencies in revenue cycle management can be costly, resulting in an increased number of billing errors, lost revenue and unnecessary administrative time and expense.
Through conversational AI, hospitals can send automated and personalized notifications to patients regarding upcoming payments, bill due dates and payment confirmations. The technology provides them with the capability to automatically follow up on overdue or missed payments, remind patients of expiring credit cards or direct them to secure payment gateways.
Because conversational AI is equipped to handle a wide range of billing inquiries 24/7, it reduces call volumes and wait times. It also benefits health systems by ensuring timely payments and reducing the administrative burden on their staff.
5. Improve Patient Outcomes by Reducing Readmissions
The primary goal of healthcare providers, including hospitals, is to deliver care that improves health outcomes. That does not always occur, though.
The average hospital readmission rate in the U.S. is 14.5 percent. The average readmission cost is $15,200, with an estimated annual cost for Medicare of unnecessary readmissions at $26 billion.
Multiple studies show that hospitals can perform specific activities to lower their rate of readmissions. At the top of this list is post-discharge follow-up.
There are numerous reasons to follow up with patients after a hospital stay, including scheduling a visit with their primary care provider to review current and ongoing symptoms that led to admission, going over test results, reviewing potential medication changes and checking vital signs. The follow-up process also mitigates post-discharge complications and gives the patient a chance to talk with his or her primary care physician about any other health concerns.
A follow-up appointment within seven days of discharge is significantly associated with lower readmission risk across all patient types, including medical and surgical patients. If a patient experiences a post-discharge complication, a well-timed follow-up appointment may prevent costly hospital readmission arising from medication discrepancy or acute decompensation. Half of all readmitted patients, though, did not see their doctor for their follow-up appointments.
Post-discharge phone calls are important for a smooth and effective care transition for patients who have been hospitalized — they are one of the most economically recommended ways to reduce 30-day hospital readmission rates. In fact, multiple studies have found that follow-up phone calls were associated with reduced readmissions.
Conversational artificial intelligence (AI) is increasingly being utilized by hospitals for post-discharge follow-up. It can be scaled to direct patients to the right level of care to close gaps in care, whether through an in-office appointment or an at-home screening.
Providertech’s Role in Reducing Hospital Costs
It’s estimated that adoption of AI could lead to savings of five to 10 percent in U.S. healthcare spending, saving billions of dollars each year that is now wasted money. How? One way is by automating responses to many routine and repetitive questions and tasks.
Providertech’s conversational AI solution is designed to support you in increasing patient engagement while reducing the administrative burden on your staff. By providing individualized, accurate and timely responses to patient inquiries, it enables you to achieve a positive return on investment (ROI) and:
- Automatically provide accurate and updated information to patients
- Decrease healthcare professionals’ workload by reducing unnecessary hospital admissions and readmissions while mitigating repetitive and mundane tasks
- Reduce breakdown in communication and decrease wait and consultation times by connecting patients with the right healthcare providers
- Deliver succinct educational materials to patients to help them understand their conditions and treatments
- Send regular alerts or reminders about appointments
Call 540-516-3602 to start your interactive demo of our conversational AI solution for patient outreach and engagement using test patient Sara Morales D.O.B. 7/20/81. Or, contact us today to learn more!
