Question

Describe the benefits of hospitals and doctors working to achieve a shorter LOS from both financial outcome and growth capacity of volume perspectives

Answer 1

Benefits from fiancial point of view:

1. Risk from infection acquired in hospital: In case a patient acquires any infection from staying in the premises of hospital the cost of such treatment has to be borne by the hospital. Hence the longer a patient stays the more chance of getting an infection is, Thus hospitals try to reduce Lenght of stay to reduce such risk and there by reducing their costs.

2. Turnover of patients: Shorter Lenght of stay will help hospital take more patients in a year thereby increasing there revenue, take for exaple a hospital with 10 days of LOS can admit about 36 patients in a year but a hospital with 5 days of LOS can admit 73 patients in that same time period.

3. Fixed expenses are reduced: Since most of the costs a hospital has to pay are fixed costs like salary to doctors, lease rent etc, treating more patients help them reduce their per patient fixed cost and hence can be more cheaper and more competitive thereby attracting more patients.

4. Increase Customer satisfaction: If a hospital is able to treat a patient in shorter time, patients will be happy to pay a premium for such services which will add to revenues.

Benefits from Growth capacity volumes:

1. Shorter LOS means low mortality rate: It has been seen that if a patient is aditted in a hospital for too long the chances of his survival reduces, hence LOS is directly linked to mortality rate with shorter the LOS shorter are the chances of patient dying. A hospital which has low morality rate is going to be the first choice of every patient.

2. More patients more retention rate: It is natural that if a patient is happy with the servies of a hospital he will definitaly return to the same hospital and will even refer to his friends as well.