Skip to main content

Calculating the ROI on Patient Satisfaction Efforts

By Sandie Colatrella, RN, BSN, CLNC for HealthLeaders Media  
   June 28, 2011

The HealthLeaders Media 2011 Annual Survey identified a perceptible disparity in thinking between CEOs and nurse executives. The data collected distinguished the priorities of the two groups, with the c-suite respondents claiming cost reduction as their most important concern and nurse executives ranking patient satisfaction as first. But are they so different?

The apparent fork in the road is the result of competing demands and internal organizational perspectives. Hospital leadership is forced to face a new reality in order to effectively deploy resources to continue and improve operations as a result of skyrocketing costs; unpredictable reimbursement, including pay for performance; work force shortages; the public outcry for improved quality and safety; and the demand for increased transparency. 

Positive financial and clinical successes do not occur in isolation from one another. Proven process-driven improvements, implemented concurrently with staffing and facility improvements, are crucial to a facility's ability to prosper. Fiduciary responsibility and providing a notable healing environment can and do co-exist.

The process of presenting a business case for any major expenditure should start with some basic questions:

  • Does it meet the facility's mission, organizational structure, and vision of the project?
  • Are the associated costs prudent in light of other alternatives that might achieve the same goal?
  • What is the financial impact of any project?

For example, if the facility is considering a building renovation project, consider the following:

  • Will it result in increased admission capacity?
  • Will it increase the hospital's bond rating as a result of capital improvements?
  • Will it help avoid hospital-acquired conditions or never events that result in decreased reimbursement?

One should look at cost savings by cost avoidance as well. For example, will it reduce litigation, malpractice settlements, or worker's compensation cases?

Assemble a multi-disciplinary team to research projects. Financial managers should be determining the operating impact-paralysis of first cost, ongoing cost effectiveness of the investment, and a multiyear return on the investment. The results may surprise you. Those responsible for clinical oversight should help define how it will improve patient satisfaction and safety. Advocating clean design, environmental risk management, standardization, and innovative design, materials, and equipment choices that create positive, empirically measureable outcomes can be "sold" to the c-suite. How will the project optimize work flow and organizational structure? Can the hospital market the system improvements to remain competitive, increase their market share, and encourage philanthropic donations? How can these benchmarks be documented?

What financial analysis can support a clinical decision? How can the nurse executive argue the clinical imperative and value of a functional program on a business decision? Safety, satisfaction, and costs go hand in hand. Present the facts. Consider the following examples:

Consumer Reports National Research Center published a report on March 31, 2011 that showed that 77% of those surveyed reported a "high level" of public concern that they would be harmed during treatment as a hospital patient.

Indeed, the 2010 U.S. Department of Health and Human Services Office of Inspector General report showed that one in seven Medicare patients or 13.5% of hospital patients experienced serious or long-term medical harm (including infections) or death while undergoing treatment in hospital; an additional 13% experienced temporary harm. The researchers estimated that hospital infections and medical errors involving Medicare patients contributed to approximately 180,000 deaths and $4.4 billion in additional hospital care costs each year.

A health system that does not have patient safety reports that encourage patient confidence will not only have trouble enticing patients but will now be penalized with reduced revenues resulting from never events and hospital-acquired conditions. With the advent of never-events and hospital-acquired conditions impacting healthcare reimbursement, facilities are driven by both the financial and legal impact of medical errors.

Thirty-three percent of all reported incidents to NPSA were "slips and falls" at a cost of approximately $24,962 per case. Define the savings of risk mitigation by analyzing and documenting incidents and safety improvements through progressive clinical processes. The following steps can reduce patient slip and fall incidents dramatically: Shorter distances between the bed and bath; limiting travel in open spaces and providing resting points; increasing opportunities for staff observation; careful selection of flooring choices; consideration for dementia conceptualization; improved way finding.

Hospital-acquired infections translate into $21.3 billion dollars per year, according to data from CMS. Post-op sepsis alone costs an estimated $9,000 per case. This problem can be approached by adding hand washing and hand sanitizing stations, HEPA filters, anti-microbial finishes including floors, counter tops, furniture, and fabrics.

One organization replaced all of its counter surfaces with a solid surface that had anti-microbial properties after a high-price lawsuit following the unfortunate death of a patient from a hospital-acquired infection. The plaintiff's attorney had established evidence that the bacteria that had stricken the patient was traced to the work surfaces in the patient's room.

Two out of every hundred patients experience an adverse drug event at a cost of $4,700 per case. Research has revealed that medication errors can be reduced by 30% by increasing the size of medication rooms, reorganizing supplies, improving lighting, and controlling noise and distraction thereby preventing misinterpretation of verbal orders.

The average medical-surgical nurse walks 5 to7 miles per shift, lifts 1.8 tons cumulatively over an 8-hour shift, and spends 80% of his or her time fetching supplies.  Eighty-one percent of nurses have back pain, which is a higher rate than construction workers. Considering it costs $65,000-$75,000 per head to train and replace a nurse, a business case can certainly be made to make a safer and more efficient work environment that will result in improved staff morale, recruitment, and retention.

About 65% of the hospitals in this country are more than 40 years old. Buildings can be barriers to progress when they are not designed for future flexibility and growth. By the year 2020, when it is estimated that more than16% of the population will be older than 65, the need for healthcare will increase exponentially. Healthcare in the future will move from the inpatient environment to more than 90% being delivered in ambulatory care or specialized short stay facilities. Organizations need to start anticipating the needs and changes this will bring now.

Most of the shortcomings in design and process planning  occur because of a lack of vision and communication. Projects that are rushed forward without a detailed review of the functional program and available financial resources are the ones that are at risk of failure. By collectively focusing on the lifecycle perspective, strategic planning, consumer satisfaction, and life and safety elements of the project, success can be achieved by all.

Sandie Colatrella, RN, BSN, CLNC, is VP Healthcare Planning & Research at Avanti Architecture.

Tagged Under:


Get the latest on healthcare leadership in your inbox.