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Pareto's principle in hospitals

By Andy Day

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A mandate for the operational efficiency of clinical staff.
 
Everyone is talking about the need to deliver more affordable and sustainable models of care.  Many experts and public figures have stated that we need to find a way to reduce the cost per case by 20 to 30%.  To accomplish this, consider applying this rule to the cost of care in the hospital setting. 
 
Coined by Juran and often referred to as the 80/20 rule... Pareto's principle has been used in many fields to refer to the tendency of a few "vital factors" to have the majority of effect.  Most hospitals that I have had the opportunity to work with spend 60-70 % of their operating budget on wages and benefits of employees.  Typically about 2/3 of this is nursing, tech and support services.  
 
When looking for this magnitude of change there are three main elements that I believe offer this scale of opportunity:
 
  1. Redesign clinical care pathways and systems of care to deliver the right care across the continuum and minimize acute hospital based services
  2. Leverage evidence based medicine to achieve better outcomes, reduce the cost of quality and the frequency of acute interventions
  3. Maximize the operational efficiency for care that is delivered in the hospital setting with a particular focus on enterprise capacity management for systems at high levels of utilization and operational efficiency for clinicians. 
 
We need to do #1 & 2 but regardless, we are still going to care for a significant volume of inpatients.  If we are serious about reducing the cost of care that is delivered in the hospital setting, we absolutely must impact the FTE cost per patient day.  The trick is to find a way to do that without sacrificing quality while doing this in a way that supports scarce labor resources in being successful and reflects the complex interdependent nature of hospitals as systems.
 

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