In an industry as fluid and ever-changing as healthcare, the concept of return on investment (ROI) desperately needs a critical reassessment. The lion’s share of attention has been paid to existing legacy systems and large investments into expensive new technology, while daily inefficiencies working quietly below the surface continue to cost money, time, and lives.
With hospital costs rising faster than inflation according to a recent report from the American Hospital Association, it is time to shift the focus toward solving simple, longstanding issues, which could significantly affect day-to-day operations. Hospitals and healthcare systems will continue to bleed money if their approach does not adjust to one that embraces innovation and changes at all levels can drive improvements.
It may be an uncomfortable switch at first, but we must challenge the status quo, or we’re doomed to keep repeating the same mistakes. In addition to a positive balance sheet, ROI must factor in patient outcomes, staff wellbeing, and operational simplicity.
The innovation disconnect: Why good ideas get ignored
While many envision ROI in healthcare simply as financial returns, the complete picture is much more complex. One must also factor in the more intangible aspects of hospital operation, such as clinical effectiveness, workflow improvements, risk reduction, and most importantly, patient safety. While these benefits can be more difficult to quantify than purely financial ones, they remain essential to running a functioning hospital.
It is crucial to remember threats to ROI in the healthcare space don’t just result from external forces, but also from systemic repercussions. Healthcare tends to stick to the familiar, such as using the same tape and labeling systems of IV infusion lines in acute care settings, which have been in use since the 1970s. The bar to make a change can be so high that we end up paralyzed, attacking problems the same way we did decades ago. At the same time, in order to justify big investments and give the illusion of progress, major investments are often devoted to state-of-the art machinery that doesn’t have an impact on the quality of care significantly.
While flashy machines often dominate the spotlight and look good in press releases, it is in the small, unglamorous advancements that represent the most important progress that can be made – even if they often get lost in red tape and gatekeeping. The most important innovations, and the ones that should be prioritized, are those that save time, reduce stress, and make care safer – without adding burden or changes to clinical workflow while taking cost out.
Acute care: The ROI of survival
Risk and cost pressures combine in the acute care setting to produce an environment with razor-thin margins and no room for error. Hospital systems must juggle rising costs, staffing shortages, regulatory demands, and growing patient expectations while trying to maintain a high level of care. In acute care situations, mistakes aren’t just costly, but a matter of life and death.
Every year, adverse drug events (ADEs) cost over $3,000 per affected patient in community hospitals, not including labor or legal costs. These events often lead to longer hospital stays; for example, a study found that ADEs were associated with an increased adjusted cost of $3,420 and an adjusted increase in length of stay (LOS) of 3.15 days.
One would think in the most dangerous of situations, no expense would be spared in ensuring all care is as precise and accurate as necessary. Unfortunately, due to sky-high levels of stress and often archaic practices, infusion-related errors in acute care settings are estimated to add $2 billion annually to U.S. healthcare costs. The good news is that these problems have straightforward and simple solutions, which can make a world of difference.
Dental industry: Where small barriers meet lost revenue
These inefficiencies are also starkly visible in the dental industry, where small barriers have outsized financial consequences. One study found that 7.5 percent of participants reported almost always or always gagging during dental visits. An issue like a gag reflex creates a downstream effect, where the delays and pain caused by it can impact a dental practice in several interconnected ways. Due to the interruptions, there are fewer procedures completed, less overall revenue, lowered patient trust and happiness, and an overall decline in hygienist productivity and morale.
Attention paid to problems as seemingly small as these have immense value – providing a fix to the gag reflex has been shown to reduce the number of treatment interruptions, leading to more efficient procedures and improved patient satisfaction. Solutions that tackle this problem not only reduce costs but also help modernize dentistry, allowing providers to deliver a higher standard of care.
Redefining ROI: Metrics beyond dollars
When we discuss the “return” in ROI, we need to be considering multiple things. While metrics, such as direct cost savings from reduced errors and litigation, are seen easily in the bottom line, there are a lot of angles to improve upon. These include reducing the length of stays by patients, employee time saved and overtime avoided, staff satisfaction and retention, patient morale and better outcomes, and increased procedure throughput and access. Just because something like reduced stress cannot be assigned a dollar amount, which is not to say it doesn’t have a very tangible effect for overworked physicians.
These meaningful returns are critical to the success of any healthcare organizations, and they’re brought about by considering the costs – quantitative and qualitative, the financial and the human, in equal measure. In a system already under incredible pressures, with more seemingly arriving every day, ROI becomes about not spending less but spending smarter.
Healthcare and medical technology leaders need to shift their approach from the legacies of the past and to smart and simple, yet innovative solutions, which solve problems that healthcare workers are facing every day. More than numbers on a spreadsheet, we must concern ourselves with human issues, delivering safer care, happier staff, and more resilient systems.
As we move forward, let ROI not be solely a measure of financial health, but a tool for transformation, into clinical excellency, operational clarity, and workforce sustainability. To thrive, we’ll need to make variations to both the ways we provide healthcare and the way we think about it. The most important changes won’t be the most expensive or the most high-tech, they’ll be the ones which affect the lives of patients and providers on a daily basis. And they’ll be bringing safety, both physical and financial, to the forefront.
Picture: Warchi, Getty Images
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