Attempts to achieve substantial cost reduction without optimally managing patient flow variability are doomed to fail
Contrary to popular belief healthcare cost can be decreased while simultaneously improving the quality of care. Many efforts are currently underway attempting to achieve these goals: benchmarking and employing best practices from other healthcare organizations, improving care coordination, bundled payments, accountable care organizations, increased adoption of healthcare IT, and others. While each of these initiatives is beneficial in its own right, together these efforts are still insufficient for substantial and sustainable healthcare cost reduction. This goal can only be achieved by adopting and implementing healthcare adapted scientific operations management methods, first and foremost - managing patient flow.
Patient flow variability management has the potential to decrease US healthcare cost by 4-5% by one estimate, or $35-112 Billion per year by another.
In an era of healthcare reform, hospitals in particular, are financially vulnerable as a result of payment decreases even as more patients enter the healthcare system.