The Hidden Financial Impact of Reducing In-Hospital Mortality: Why CFOs Should Invest in Interdisciplinary Bedside Rounding

Hospital Chief Financial Officers (CFOs) must constantly seek ways to improve their institution's financial health while maintaining high-quality patient care. One often overlooked strategy that can significantly impact both patient outcomes and the bottom line is investing in processes that reduce in-hospital mortality. This article explores the financial implications of reducing mortality rates and presents a compelling case for implementing interdisciplinary bedside rounding as a cost-effective solution.

The True Cost of In-Hospital Mortality

While the human cost of patient deaths is immeasurable, the financial impact on hospitals is substantial and multifaceted. Recent studies have shed light on the economic burden of preventable hospital deaths:

1. A 2013 study published in the Journal of Patient Safety by James (2013) estimated that preventable hospital errors leading to patient deaths cost approximately $19.5 billion annually in the United States.

2. Research from the Journal of Health Care Finance (Shreve et al., 2010) suggested that a single patient death due to a preventable error could cost a hospital between $1.1 million to $3.2 million, factoring in malpractice costs and loss of reputation.

3. A study in the American Journal of Medical Quality (Bazzoli et al., 2008) found that hospitals with higher mortality rates had, on average, 7-10% lower profit margins compared to those with lower mortality rates.

4. Health Affairs published research by Zimlichman et al. (2013) estimating that adverse events, including those leading to death, could increase the cost of admission by $13,000 to $28,000.

These figures highlight the significant financial incentive for hospitals to invest in mortality reduction strategies. However, it's crucial to note that these estimates can vary based on factors such as the specific cause of death, whether it was preventable, the patient's condition, the hospital's payer mix, and geographic location.

The Impact on Hospital Reimbursement

Beyond the direct costs associated with patient deaths, mortality rates can significantly affect hospital reimbursements in the US through various quality-based payment programs:

1. 1Medicare Hospital Value-Based Purchasing (VBP) Program: This program adjusts payments based on a hospital's performance on quality measures, including mortality rates for specific conditions. Poor performance can lead to reduced reimbursements.

2. Hospital-Acquired Condition Reduction Program (HACRP): Hospitals with high rates of hospital-acquired conditions, some of which can lead to patient deaths, face penalties under this program.

3. Readmissions Reduction Program: While not directly related to mortality, this program can indirectly impact costs associated with patient deaths.

4. Case Mix Index (CMI) Impact: Patient deaths, especially premature ones, can affect a hospital's CMI, potentially leading to lower reimbursements.

Structured Interdisciplinary Bedside Rounds (SIBR rounds): A Proven Solution

Given the substantial financial implications of in-hospital mortality, CFOs should consider investing in evidence-based practices that can reduce these rates. One such practice is interdisciplinary bedside rounding, which in units with functioning SIBR rounds have shown remarkable results in reducing mortality rates.

Recent studies have demonstrated that implementing SIBR rounds can reduce in-hospital mortality for units by rates ranging from 24% (Manheim et al., 2015)  to 0.42 reduction in adjusted odds-ratio (Loertscher et al., 2021). Additional evidence from Emory University (58% reduction in mortality) and the Pasqua Hospital (28% reduction in mortality) suggest greater repeatability of outcomes (Stein et al., 2015, Taylor et al., 2017). These significant reductions not only saves lives but also present a compelling financial case for implementation.

The Benefits of SIBR rounds:

1. Improved Communication: By bringing together various healthcare professionals at the patient's bedside, this process enhances communication (Schwartz et al., 2021), reducing the likelihood of errors and adverse events (Basic et al., 2021), and improving overall care coordination (Scheff, 2019).

2. Early Identification of Issues: Regular interdisciplinary rounds allow for quicker identification and addressing of potential complications, preventing escalation to life-threatening situations.

3. Enhanced Patient Engagement: Including patients and their families in the rounding process improves patient understanding and compliance with treatment plans.

4.  Streamlined Care Processes: Interdisciplinary rounding can lead to more efficient care delivery, potentially reducing length of stay (AlSakaji et al., 2023, Gausvik et al., 2017, Manheim et al., 2015) and associated costs (Clay-Williams et al., 2018, Manheim et al., 2015).

5. Professional Development: This collaborative approach provides learning opportunities for all team members, potentially improving overall care quality across the hospital (Lopez et al., 2019).

Financial Implications of Implementing Interdisciplinary Bedside Rounding

While the initial investment in training and process changes may seem substantial, the potential return on investment (ROI) is significant:

1. 1Reduced Liability Costs: Fewer deaths may lead to fewer lawsuits, potentially saving millions in legal fees and settlements.

2. Improved Reimbursement: Better performance on mortality-related quality metrics can lead to higher reimbursements under various CMS programs.

3. Increased Revenue: Improved outcomes and reputation may lead to increased patient volume and higher-weighted DRGs.

4. Operational Efficiency: Reduced length of stay and improved bed turnover rates can increase overall hospital capacity and revenue.

5. Staff Retention: Improved patient outcomes can boost staff morale, potentially reducing costly turnover rates.

Conclusion

As hospital CFOs navigate the challenging healthcare financial landscape, investing in strategies to reduce in-hospital mortality presents a unique opportunity to improve both patient outcomes and financial performance. Interdisciplinary bedside rounding, with its proven track record of reducing mortality rates by 24-58%, offers a compelling solution.

By implementing this evidence-based practice, hospitals can potentially save millions in direct costs, improve reimbursements, enhance their reputation, and most importantly, save lives. As stewards of both financial resources and patient care, CFOs have a unique opportunity to champion initiatives that align financial interests with the core mission of healthcare: providing high-quality, life-saving care to patients.

In an era where value-based care is becoming increasingly important, investing in interdisciplinary bedside rounding is not just a financial decision—it's a strategic imperative for hospitals aiming to thrive in the evolving healthcare landscape.

References

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