Press Ganey Quantifies an ROI on Efficiency

In 2007, Press Ganey released Return on Investment: Creating Efficiency by Improving Patient Satisfaction. In it they identify some interesting efficiency, financial and quality relationships. Here is just one nugget from that report:

Discharge planning, capacity management, and patient throughput all have a direct impact on an organization's financial health. Overcrowding and inefficiency can lead to higher treatment costs, staffing difficulties, and poor patient satisfaction. The following examples illustrate the capacity gains realized from improving patient flow and efficiency at a typical 300-bed hospital (Kobis and Kennedy 2006):

• Reducing length of stay by 0.25 days results in a functional increase of 12 beds
• Increasing the number of patients discharged by 11:00 a.m. from 15% to 30% adds 8 functional beds
• Decreasing the average bed turnover from 4 hours to 1 hour can add 4 to 6 functional beds
• Reducing weekday surgical volume variability through demand smoothing can add 3 to 5 functional beds

These improvements can increase functional bed capacity by 27 to 31 beds—the equivalent of a typical nursing department—thus saving annual labor expenses of $2 million to $3 million. By providing the appropriate service in the right place at the right time, hospitals can improve throughput, length of stay, and cost per case. Not only does patient satisfaction help highlight efficiency bottlenecks within the organization, but improving satisfaction and improving efficiency are often done simultaneously.