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The Business Case for Reducing Length of Stay for Patients

Posted by BestPractices on January 31 2011

 

Let’s look at the financial impact that improving length of stay has on a hospital and on its emergency department.

For a hospital with 40,000 ED visits per year, reducing your average length of stay from 180 to 120 minutes opens up capacity for 20,000 potential new patient visits.

  • 20,000 new visits X $100/visit = $2,000,000 in potential new revenue for the physician group
  • 20,000 new visits X $400/visit = $8,000,000 in potential new revenue for the hospital
  • For a hospital with 60,000 ED visits per year, reducing your average length of stay from 180 to 120 minutes opens up capacity for 30,000 potential new patient visits.
  • 30,000 new visits X $100/visit = $3,000,000 in potential new revenue for the physician group
  • 30,000 new visits X $400/visit = $12,000,000 in potential new revenue for the hospital

This potential revenue increase does not include the increase in inpatient revenue (at $3,000-$7,500 per admission) that your hospital will experience with a notable reduction in LWOTS (Left without Being Seen)!


Do the math to discover what additional revenue improving flow can bring to your institution, your department, and your people.

 

 

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