AHA: Hospitals burdened by high DME and labor costs, worker shortages

In an April report, the American Hospital Association (AHA) shared new data on rising hospital costs. Labor as well as equipment and supplies were two areas where costs ballooned compared to pre-COVID rates. At the same time, DME and supplies ordering has long been a segment of healthcare plagued by waste, inefficiency, and frustration due to over-reliance on dated technology. This translates to more staff hours spent ordering DME, as well as confusing, bureaucratic processes that make it hard for hospitals, health plans, and suppliers to collaborate, minimize waste and maximize value. The Parachute Platform’s best-in-class ePrescribing for DME and supplies slashes time spent on orders, reduces repeated order paperwork and phone follow-ups for stressed healthcare workers, and provides the transparency necessary to ensure maximum value and proper payment for every stakeholder.

Last month, the American Hospital Association (AHA) released a new report titled The Costs of Caring: Massive Growth in Expenses and Rising Inflation Fuel Continued Financial Challenges for America’s Hospitals and Health Systems. The report details how COVID and the resulting changes in staffing/labor, patients’ clinical care needs, and inflation have led to tight budgets and limited resources, with many hospitals losing revenue and at risk of failing to meet their operating costs.

“Hospitals and health systems have repeatedly confronted a range of financial and operational challenges, including historic volume and revenue losses, as well as skyrocketing expenses,” noted the AHA. “When coupled with rising inflation and growth in input prices, these expense increases have been severely detrimental to hospital finances, leading to billions in losses and over 33% of hospitals operating on negative margins.”

In a related fact sheet, the AHA cites staffing shortages, increased labor costs, and more expensive supplies among the major contributors:

• Through the end of 2021, DME expenses grew 20.6% compared to pre-COVID levels.
• In ICUs and respiratory care departments, which were more directly involved in providing COVID care, DME expenses increased 31.5% and 22.3% respectively.
• Data from the Bureau of Labor Statistics shows hospital employment is down by about 100,000
• Labor expenses per patient were up 19.1% compared to pre-pandemic levels, with labor costs accounting for about half of hospitals’ total expenses.
• The labor shortage has meant increased reliance on contract staff agencies, with reliance on contract staff, and particularly contract nurses, with the percentage of nurse labor expenses growing from 4.7% spent on contract labor in 2019 to 38.6% in January 2022.
• Contract agencies charge more, as well, which has led to a 213% rise in hourly billing rates for contract employees. 

The bulk of DME orders are still completed by phone and fax, and this leads to a range of problems that drive expenses up, stress overburdened healthcare workers, and block patients from receiving a high standard of care. The CMS also reports that DME is an area with high improper payment rates, which can make hospitals vulnerable to CMS auditing.

So what’s the root of the problem?

Phone and fax based DME and supplies ordering is a brittle process, with opportunities for lost information and documentation at every step. Something as simple as an empty toner cartridge or a smudged signature can result in weeks of delays. Meanwhile, paper-based documentation assembly and coding is a complicated process, with ordering clinicians often relying on a patchwork of sticky notes, cover sheets, and individual pieces of documentation spread across multiple devices and storage systems. Lack of transparency about order status adds another layer of inefficiency and uncertainty to the process. Redoing and resubmitting order paperwork, as well as the need for multiple followups, eat up valuable staffing time that could be spent on patient care.

ePrescribing on the Parachute Platform addresses all of these difficulties with simple, fast ordering workflows, documentation and coding checks, fast and flexible eSignature options, in-app communication, and end-to-end order tracking.

ePrescribing on the Parachute Platform addresses all of these difficulties with simple, fast ordering workflows, documentation and coding checks, fast and flexible eSignature options, in-app communication, and end-to-end order tracking.

Orders get accepted in just a few minutes, flexible eSigning workflows mean that clean orders can be approved quickly and efficiently, and suppliers have clear, complete information that enables quick, accurate payment. Finally, network optimization features allow suppliers, hospitals, clinicians, and payers to collaborate to ensure patients are getting the right DME for the best value. And the best part? Zero faxing required.

Parachute Health offers DME across a range of growing care categories, including respiratory, diabetes, and CPAP/PAP/sleep testing, so whatever the need, hospitals can centralize their ePrescribing on a single platform. Orders arrive within days and not weeks, while ordering clinicians spend minutes and not hours on ordering, which lowers stress and helps them to focus on direct patient care, not paperwork.

At a time when costs are high and resources are stretched to breaking, we need to actively create and implement solutions to support stressed hospital systems and exhausted healthcare workers, make fewer demands on healthcare workers’ time, and help hospitals and healthcare workers keep the focus on patient care. By modernizing their DME ordering with a transition to ePrescribing, the hospital sector can slash costs, fight burnout, improve workplace experiences, and do more with less.

Hospitals and healthcare providers: Try delightfully simple DME ordering today.