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U.S. Hospitals Waste $12 Billion Annually Because of Poor Communication
Date:3/9/2009

Biggest Losses Seen in Patient Delays and Unnecessary Stays

COLLEGE PARK, Md., March 9 /PRNewswire-USNewswire/ -- Researchers from the University of Maryland's Robert H. Smith School of Business put a price tag on the cost of poor communication in U.S. hospitals at $12 billion per year. The research, newly released from the Center for Health Information and Decision Systems (CHIDS), is the first to quantify the economic impact of a health care system rife with communication delays and failures. Among key findings was unnecessarily long hospital stays - such as the time and resources patients squandered waiting to be discharged - account for 54 percent of total losses.

To put the $12 billion amount into perspective, the loss equals approximately two percent of hospital revenue nationwide, a figure that is more than half of the average hospital margin of 3.6 percent.

"Simply stated, the average hospital wastes a figure that is in substantial proportion to the amount it makes," said Ritu Agarwal, director of CHIDS at the Robert H. Smith School of Business and the study's lead researcher. "The industry ramifications for recouping these losses - particularly in light of the need for health care reform in improving patient access to care and services - are tremendous."

In an article, Agarwal and CHIDS researchers say the solution to these inefficiencies rests largely in investment in information technology that would help streamline communication among hospital caregivers. Theirs is a timely observation following the $787 billion economic stimulus bill recently signed into law by President Obama. Of that, more than $140 billion is earmarked for health care, with $19 billion to modernize health information technology systems. As part of his proposed $634 billion budget to expand U.S. health care, Obama has also charged Congress to come up with the means of making it available to
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SOURCE University of Maryland's Robert H. Smith School of Business
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