Jordan Ellis
Hospitals are expensive, and the costs of staying in one can quickly add up. In 2020, hospitals billed an average of $62,244 for an inpatient stay in the US. While insurance can help reduce this sum, there are still ways to save money at the hospital. This includes asking the right questions, refusing unnecessary equipment, and being aware of out-of-network charges. Hospitals themselves can also save money by reducing daily expenses, automating administrative tasks, and implementing energy-efficient solutions. These small changes can add up to significant savings over time.
| Characteristics | Values |
|---|---|
| Get permission in advance from insurance companies | Permission for insurance coverage for certain procedures or hospital stays |
| Referral from a regular doctor | Referral for insurance coverage for a visit with a specialist |
| Refuse unnecessary equipment | Refuse unnecessary equipment that can be bought for a cheaper price at a pharmacy |
| Avoid out-of-network charges | Write "as long as the providers are in my insurance network" before signing admitting documents |
| Ask to be admitted as an inpatient | Inpatient stays are cheaper than observation status |
| Use $4 generic drugs | Generic drugs can save money |
| Automate administrative tasks | Streamline processes, improve communication, and reduce costs |
| Regular equipment maintenance | Prevent costly breakdowns and extend lifespan |
| Encourage cost-saving ideas from employees | Reward employees who contribute to cost-reduction efforts |
| Energy-efficient lighting | Use programmable thermostats and properly insulate premises |
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What You'll Learn
Refuse unnecessary equipment
Refusing unnecessary equipment is an important way to save money during a hospital stay. Hospitals may attempt to send patients home with costly equipment that they do not actually need, such as $300 slings that could be purchased for $10 at a pharmacy, $1,000 knee braces, and $2,500 wheelchairs. These items are often billed to insurance and end up cluttering patients' homes.
It is important to be vigilant and refuse any equipment that is not necessary, even if it is covered by insurance. This is especially important following orthopedic procedures, where the temptation to accept these costly items may be higher.
One way to avoid this trap is to ask the right questions. Patients should feel empowered to inquire about the necessity of any equipment being sent home with them and to ask about alternative, cheaper options. For example, simply asking if a cheaper option is available can help avoid unnecessary spending.
Additionally, patients should be aware that they always have the right to say "no" to any equipment or treatment offered by the hospital. By being informed and proactive, patients can avoid unnecessary equipment charges and save money on their hospital stay.
Overall, refusing unnecessary equipment is a key strategy for reducing financial strain during a hospital stay. By being mindful of this tactic, patients can protect their financial health while also receiving the necessary care and treatment.
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Avoid out-of-network charges
The cost of healthcare in the United States is a significant concern for many, with hospital stays and procedures often resulting in substantial bills. One way to save money at the hospital is to avoid out-of-network charges, which can be unexpected and costly. Here are some strategies to help you do that:
Before signing any admitting documents, carefully review the paperwork and be clear about the terms of your stay. Are you being admitted as an inpatient, or are you on "observation status"? It's important to understand the financial implications of both. For instance, if you are on "observation status", you will be considered an outpatient and responsible for higher outpatient co-payments and deductibles. Don't hesitate to ask questions and advocate for yourself.
When reviewing the admitting documents, look for a section regarding your willingness to accept financial responsibility for charges not covered by your insurer. Before signing, you can modify this section to specify your willingness to pay for in-network providers only. You can add a “limited consent” clause, stating that your consent is limited to in-network care and excludes out-of-network care. This strategy has been successfully employed by others and provides a basis for arguing against out-of-network charges.
Additionally, be cautious about accepting equipment or services that may be billed as out-of-network. For example, if the hospital offers to send you home with equipment like a sling, knee brace, or wheelchair, evaluate whether you truly need it. Sometimes, these items are billed to insurance at a much higher rate than if you were to purchase them yourself from a pharmacy.
It's also important to be proactive about understanding your insurance coverage. Some insurance companies require prior authorization or a referral from your regular doctor before covering certain procedures or specialist visits. Failing to meet these requirements could result in denied coverage, leaving you with a significant financial burden. Always verify with your insurance company to avoid unexpected out-of-network charges.
By being vigilant about your insurance coverage, carefully reviewing admitting documents, and refusing unnecessary equipment, you can significantly reduce the likelihood of incurring unexpected out-of-network charges during your hospital stay.
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Ask for generic drugs
Prescription drugs can be expensive, especially if you are taking multiple medications. One way to save money is to ask your doctor about generic drugs. Generic drugs have the same active ingredients as their brand-name counterparts but are much cheaper, often costing 80-85% less.
Generic drugs are available once the patent on a drug expires after 17 years, at which point other companies can create their own generic versions. These generic medications go through rigorous testing for quality, strength, purity, and potency to ensure they are effective before being approved by the FDA.
You can ask your doctor to write a prescription allowing your pharmacist to substitute a generic drug when it is appropriate. It is also worth checking with your pharmacist, as they may be able to substitute generic drugs for brand-name drugs unless your doctor has specifically stated otherwise.
To further ensure you are getting the best deal, you can compare prices between different pharmacies, as well as checking with large retailers such as Walmart, Target, and Costco, which often stock generic versions of brand-name drugs.
By asking your doctor about generic drugs and comparing prices, you can significantly reduce the cost of your prescriptions.
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Automate administrative tasks
Hospitals and health systems spend around $40 billion annually on billing and collections. Administrative tasks like insurance eligibility verification, claims management, and payment processing overwhelm their teams and drain budgets. However, automation can help hospitals save money by improving efficiency, accuracy, and cash flow, while easing staff stress and expediting patient care.
Automation reduces human errors, speeds up workflows, and accelerates cash flow. It frees up time, money, and headspace to optimize services and improve patient experiences. Automation tools can handle processes like patient registration, billing, and appointment scheduling, reducing delays and errors. This leads to smoother operations and allows healthcare professionals to dedicate more time to patient care.
Healthcare organizations handle sensitive patient data, making compliance with regulations essential. Automated systems come with built-in security protocols, ensuring data integrity and reducing the risk of breaches. They also assist in maintaining up-to-date documentation for compliance audits. During emergencies, such as pandemics, automation can quickly scale operations, manage increased patient volumes, and streamline vaccine distribution or testing processes.
AI-powered systems can further optimize appointment scheduling based on patient needs, provider availability, and facility capacity. AI can streamline EHRs by automating data entry, improving data accuracy, and extracting valuable insights. It can also automate tasks like claims processing, eligibility verification, and denial management, reducing the need for manual data entry while retaining human oversight.
Overall, automating administrative tasks in hospitals can lead to significant cost savings, improved efficiency, reduced errors, and enhanced patient care.
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Regularly maintain equipment
Hospitals can save money by regularly maintaining their equipment. Firstly, hospitals should assess their current equipment maintenance policies and protocols. This involves evaluating maintenance contracts, preventive maintenance policies and procedures, the availability and capability of on-site biomedical support, and the use of independent service contractors. Hospitals should also consolidate their contracts and establish an accurate inventory to avoid paying for equipment that no longer exists in the organization.
Another way to save money is to extend the lifespan of equipment. This can be achieved by being proactive about maintaining frequently used equipment, such as imaging equipment, and by retrofitting older systems with the newest software. Hospitals can also consider leasing equipment instead of purchasing it outright, as this provides flexibility and saves money by avoiding significant upfront costs and the risk of owning equipment that quickly becomes outdated.
In addition, hospitals can optimize their supply chain management to reduce waste and minimize costs. This includes tracking product use and supply levels, ordering supplies only when needed, and avoiding wasting expired products. Reusable items, such as rigid sterile containers, can also reduce costs compared to single-use items like blue wrap, which accounts for a significant proportion of surgical waste.
Furthermore, hospitals can standardize their contracts with vendors to secure better pricing and terms. Bundling contracts with original equipment manufacturers (OEMs) and maintenance vendors into a single contract with one clinical engineering provider can lead to significant cost savings. Hospitals should also consider collaborating with other healthcare providers to share equipment and staff, reducing overhead costs and increasing operational efficiency.
By implementing these strategies, hospitals can effectively save money by regularly maintaining their equipment and optimizing their resources.
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Frequently asked questions
Ask questions and be an informed consumer. For example, refuse unnecessary equipment, even if it's covered by your insurance. Ask about the terms of your stay and whether you're being admitted or held on "observation status". Observation status means you'll be responsible for outpatient co-payments and deductibles, which are generally far higher than those for an inpatient stay.
Avoid out-of-network charges. Before signing any admitting documents, add a “limited consent” clause to indicate that your consent is limited to in-network care only and excludes out-of-network care.
If you haven't met your deductible and are paying out of pocket, negotiate your bill. Hospitals often use umbrella headings on their bills, but you have the right to know exactly which medicines and implants were used and the charge for each.
