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Best Practices for Reducing Healthcare Costs

organizing healthcare

Best Practices for Reducing Healthcare Costs

Rising healthcare costs are a constant concern for all healthcare professionals. It is important that when finding ways to reduce costs, professionals are able to continue to give patients a high quality of care. The most effective ways of doing this are by eliminating waste, increasing efficiency and utilizing the information technology available. The following best practices use this model for reducing healthcare costs.

Educate staff on the advantages of electronic health records (EHRs)

Electronic health records are digital patient records that encompass a patient’s medical history, diagnoses, medications, treatment plans, laboratory and test results and much more. Storing records digitally provides healthcare professionals with an easy and more accessible format for managing a patient’s health information and sharing with other providers. According to a national survey, 79% of providers report that their practice functions more efficiently with an EHR system in place. [1]

The first step for healthcare leaders in reducing costs is implementing and training staff on the function and value of EHR. In order to utilize the full potential of this new format, nurses, physicians and other professionals should be trained on how to maintain patient information, update records and follow established security practices.

The Office of the National Coordinator for Health Information Technology suggests three EHR training strategies. Super user training designates certain staff members as “super users” who are able to provide internal training and share tips and techniques with the rest of the staff. Role-based training assigns specific roles and responsibilities to different members of the staff according to how they will be using the system based on their needs. Process-based training focuses on helping users understand the new workflows and procedures that result from introducing an EHR system into the organization. [2]

Coordinate care to reduce duplicate services

Care coordination is valuable for eliminating the duplication of costly services such as diagnostic testing, overprescribing medication, overusing expensive medical technologies and complex treatment plans. When a patient has multiple conditions, they may end up seeing multiple primary care physicians, specialists, pharmacists and other providers every year. Other patients requiring more urgent and sensitive care, such as those in emergency settings, rely on efficient care coordination to avoid miscommunication that could lead to serious harm.

Coordinating care, which can be aided by an efficient and maintained electronic health record system, has the potential of reducing costs and increasing efficiency. By integrating care providers and sharing patient information, healthcare leaders can save time, costs and resources. [3]

Adhere to established patient safety practices

While this seems like an obvious step in any healthcare setting, patient safety practices are invaluable guidelines that need to be followed and enforced. Ensuring patient safety practices has the potential to reduce healthcare costs by keeping patients healthy and avoiding return and additional visits and reducing mortality and morbidity. Safety practices show a commitment to a continuum of care throughout a patient’s life and promotes a culture of safety overall. Clear communication and the coordination of relevant patient data are integral to patient safety.

Inform patients of options and involve them in shared decision-making

Involving patients in their own healthcare has many benefits. Giving them the opportunity to understand all of the medical and treatment options available to them and to take part in the decision-making process makes the patient feel responsible and capable of managing their own healthcare. This promotes a culture of health awareness and pride which can lead to increased overall health and reduced healthcare costs.

Shared decision-making involves the working together of physicians and patients to choose the most beneficial treatment and care plans with the best possible outcome and best value. When physicians and patients participate in shared decision-making they are more confident that they are making an educated healthcare choice and are more likely to follow through with the treatment plan. This saves time and costs and builds faith in the healthcare system through patient involvement. [4]

Standardize administrative tasks

The time and money spent on administrative tasks in healthcare is extremely costly to an organization’s bottom line. According to the Institute of Medicine, the U.S. spends $361 billion on healthcare administration tasks annually, which is three times as much as is spent on cancer. Standardizing administrative tasks has the potential to lower this cost.

Before the Health Insurance Portability and Accountability Act (HIPAA) of 1996 there were more than four hundred difference formats for electronic healthcare claims. The HIPAA reduced that number to one. Standardizing administrative tasks reduces redundancy and simplify the complex processes such as billing, submitting credentialing forms, updating patient records and more. [5]

Establish accurate pricing of services

High healthcare pricing is a major factor in the rising cost of healthcare spending. Often some healthcare providers charge more than other providers for the same service or care. This means that healthcare cost and quality are not necessarily related. By establishing accurate pricing of services and providing patients and consumers with valid cost and quality information about the services they require, they will be able to make informed decisions about their healthcare needs. This can eliminate wasting time and money on unnecessary treatments or having to forgo treatment altogether due to pricing concerns. [6]

Adopt innovative models of healthcare delivery

Another method for reducing healthcare costs is to adopt innovative models of delivery. Nurses, physicians, specialists and other healthcare professionals can work together to provide higher quality, cost effective care in various patient-centered delivery models.

One such model is the Patient Centered Medical Home (PCMH) which is endorsed by the Pediatrics, Internal Medicine and Family Medicine specialty societies and the U.S. government. It is a model of care in which a team of health professionals led by a personal physician work together throughout a patient’s lifetime to provide coordinated and comprehensive care, patient education, specialty referrals and patient safety.

The Chronic Care Model is a similar concept but focuses on a patient with specific needs that arise from suffering from a chronic illness. Retail clinics are another model in which a nurse practitioner provides a limited number of treatments in a retail setting based on a cash menu of prices. [7]

Reduce costs from medical error and medical malpractice

Medical error, inefficiency and medical malpractice can be extremely costly to a healthcare organization. More often than not these expensive errors can be avoided. The key to steering clear of making these mistakes and avoiding errors that can lead to malpractice lawsuits is communication. Physicians and other healthcare professionals need to maintain open communication about their patients with their colleagues, make sure patient data is up to date and be on the same page regarding treatment, care and medication.

Physicians must also communicate clearly with their patients. This is another example of the benefits of involving patients in the decision-making process. If a patient is well informed about their conditions and their treatment choices, they will feel confident in their plan of action. The patients will also have realistic expectations about the condition they are dealing with and the possible outcomes they will be facing.

Preventing medical malpractice also requires an education and understanding of patient safety standards and of staying on top of any regulation or legislative changes. Reducing instances of medical malpractice proves effective in reducing healthcare costs by bringing down the costs of litigation and the price of medical professional liability insurance. [8]

Promote wellness, healthy habits and preventive care

This practice involves education to promote health awareness on an individual and community level. Healthcare professionals, physicians and nurses can all take part in instilling the values of wellness, diet, nutrition, exercise and other healthy activities. Encouraging people and communities to take responsibility for their own health will hopefully lead them to avoid harmful habits, such as smoking, drinking, drug abuse, unhealthy eating and lack of exercise. The goal of curbing these detrimental habits is to reduce the risk of obesity, diabetes and other chronic diseases which greatly impact healthcare costs. [8]

Preventive care is another cost effective element of healthcare. Under the Affordable Care Act, some preventive care measures are included free of charge, including:

• Blood pressure, diabetes and cholesterol tests
• Cancer screenings, including mammograms and colonoscopies
• Counseling on quitting smoking, losing weight, eating healthy, treating depression and alcoholism
• Well-baby and well-child visits from birth to age 21
• Routine vaccinations against diseases such as measles, polio or meningitis
• Counseling, screening and vaccines for healthy pregnancies
• Flu and pneumonia shots [9]

Learn More

Healthcare markets are expanding. The workforce is growing. That means demand for new leadership is rising, too. Through the online Master of Healthcare Administration in Strategy and Innovation at Adventist University of Health Sciences, you can learn to steer multifaceted health systems toward a culture of innovation, all in line with your core morals. We believe furthering healthcare starts with advancing dedicated leaders like you.


1. Medical Practice Efficiencies & Cost Savings.
2. Electronic Health Record Implementation Training Strategies.
3. Improved Care Coordination.
4. Shared Decision Making. National Learning Consortium.
5. Cutler, PhD., David et. al. Reducing Administrative Costs and Improving the Health Care System. N Engl J Med 2012; 367:1875-1878.
6. Price Transparency in Health Care: An Introduction. 2014.
7. Innovative Models of Care. Primary Care Progress.
8. Controlling Health Care Costs While Promoting The Best Possible Health Outcomes. American College of Physicians. 2009.
9. Preventive Care. U.S. Dept. of Health and Human Services.