Whether you’re the CEO, CIO, or CNO… you know how critical it is to consider the ROI on any new technology solution. What are the upfront costs and expenses of implementation? How will this new solution impact our business operations?
At Kontakt.io, we work every day to help healthcare systems improve their workflows and find efficiencies in their clinical operations. And we pride ourselves on the ROI we can deliver for our customers by leveraging easy, fast, and scalable tech solutions that integrate IoT, RTLS, and AI with existing infrastructure.
In this article, let’s explore the ROI of automated discharge. What are the hard costs and savings opportunities with a patient flow solution that could automate manual discharge tasks and reduce bed turnover rate?
What exactly is “Automated Discharge” and how does it work?
Patient discharge and bed turnover is one of the biggest time thieves in healthcare. On average, it takes 4.4 hours (Mercy Health, 2018) of turn-around time to reset a patient bed, but only 43 minutes of that time is actual cleaning and resetting. These inpatient rooms sit idle, unused, waiting for turnover because staff are busy or unaware or waiting for specific equipment. This wasted time creates delays in admitting new patients and negatively impacts patient flow and overall patient satisfaction across the entire enterprise.
But there is a solution that can help hospitals reclaim that lost time and better serve their patients: Discharge automation. This is the automated creation of a discharge event within EPIC once the patient is actually leaving and not when the nurse is entering the information. And this automation and reduction of workflow can greatly reduce turnover time and dramatically increase efficiency throughout the health system.
What costs can hospitals expect to save using patient location (RTLS) data to automate discharge workflows?
Streamlining the discharge process, reducing length of stay (LOS), and improving bed turnover rates (BTR) can deliver substantial savings. Let’s take a look at both LOS and BTR among other areas of patient flow that can benefit from RTLS workflow automation.
Reduced LOS:
A reduction of 0.25 to 0.5 days in length of stay can lead to significant savings. For example, if the average cost per inpatient day is $2,000, reducing the length of stay by an average of 0.5 days for 1,000 patients can save $1 million per year.
Improved BTR:
By increasing bed utilization rates, hospitals can not only treat more patients but also avoid and defer the costs of building new bed capacity or expanding facilities. This can deliver savings of $3,000 to $5,000 per bed, annually. With 5 additional patient days, that savings rises to $10,000 per year.
Enhanced operational efficiency:
Automating discharge tasks reduces the administrative burden on staff, allowing them to focus on patient care. This reduction or elimination of discharge tasks can save on labor costs with annual savings of $1,000 to $2,000 per bed.
Reduction in Readmission Rates:
With effective discharge automation, hospitals can better communicate and follow up with patients, which can impact the likelihood of readmissions. Reducing readmission rates by even a small percentage can lead to significant cost savings. For example, a 1% reduction in readmissions for a hospital with 10,000 annual discharges can save approximately $500,000 to $1 million annually.
TOTAL ESTIMATED SAVINGS
Looking at these four categories around discharge automation, the total estimated savings per bed can range from approximately $5,500 to $10,000 annually. For a 200-bed hospital, an effective RTLS-powered discharge automation process could deliver $2M in savings each year.
So if a hospital can save just 30 minutes in room turnover time due to discharge automations – How many additional patient days per bed can an average US hospital get per year?
Implementing an RTLS inpatient flow solution for discharge automation can have a significant impact on hospital efficiency and patient throughput. Yes, even just 30 minutes in a reduction of room turnover time can increase capacity and revenue.
Let’s take a look at some numbers here, using “Hospital ABC” as an example.
Hospital ABC
- Beds: 200
- Occupancy rate: 65-70%
- Average LOS: 4.5 days
- Current room turnover time: 90-120 minutes
At 200 beds with 70% occupancy, Hospital ABC serves a total of 51,000 patient days per year.
With an average LOS of 4.5 days, that gives us a total of 81 turnovers per bed in a year, which across 200 beds equals 16,200 turnovers each year.
Saving 30 minutes per turnover at 16,200 turnovers equals 8,100 hours or 337.5 additional patient days. Across Hospital ABC’s 200 beds, that comes to 1.69 additional days per bed per year.
Hospital ABC with discharge automation
- Room turnover time reduction: 30 minutes
- Impact on hospital days per bed per year: 1.69 additional days
- Total increase of patient days: 337.5 additional days
By reducing room turnover time by just 30 minutes, an average US hospital can achieve significant business impact and dramatically increase the amount of care they can provide without investing in additional beds or expanding facilities. This increase of approximately 337.5 additional patient days per year can deliver increased revenue, improved utilization, and higher quality patient care. Let’s take a look at what the increased revenue can be.
Let’s assume this discharge automation solution investment is $350 per bed per year to unlock those 337.5 additional patient days.
How does that translate to revenue?
Let’s calculate the additional revenue and ROI using these assumptions at Hospital ABC with 200 beds.
Hospital assumptions
ROI summary
This means that for every dollar spent on discharge automation using patient location (RTLS) data, the hospital gains approximately 8.64 times that amount in additional revenue.
Implementing integrated technology to improve operations and save you money is what we do at Kontakt.io. Using IoT, RTLS, and AI to automate workflows, patient flow, and more, we can deliver tech solutions that have a significant impact not only on your day-to-day activities and patient care but also on your bottom line. The ROI is clear in our example here with Hospital ABC.
If you’d like to see what ROI your facility could expect, take a look at our easy-to-use ROI calculator. Or schedule a call with a Kontakt.io expert to chat one-on-one. We’d love to hear from you. Here’s to the future of healthcare.
