Reducing High Hospital Administrative Costs, One Package at a Time

Healthcare costs are on the rise in the United States. In 2016, the U.S. spent nearly twice as much as ten other high-income countries on medical care.

That difference isn’t just because of costly pharmaceuticals or medical procedures. Administrative costs also contribute significantly to the U.S.’s high healthcare spending. A recent study shows that 25.3 percent of total U.S. hospital costs go toward administrative expenses. That adds up to $750 billion each year spent on expenses not directly linked to healthcare.

Administrative spending at hospitals can include functions like quality improvement programs, bill management, payment processing, human resources and maintaining information systems, to name a few. These are important processes, but they often suffer from inefficiency – leading to unnecessary spending.

And, there’s another major administrative need that can fly under the radar: managing all of the hospital’s sending and receiving operations. One hospital recently reported that their shipping costs average $500,000 each year. That’s not surprising, since hospitals are busy hubs of shipping and receiving activity.

The Complexity of Hospital Shipping

Think about how many different types of mail and packages enter hospitals, as well as how many types of items hospitals need to send out. Hospitals frequently send sensitive patient mailings, like healthcare records, certified return receipt mail and payment records. They receive medical supplies, ranging from medical equipment to pharmaceutical shipments. Plus, there are a number of other types of ad-hoc inbound packages, like flowers or personal deliveries to patient rooms.

Not only is the sheer volume difficult to manage, but the process by which hospitals manage sending and receiving is complicated. There are multiple points of entry and exit at every hospital, from docking areas to reception desks. There are complex compliance and regulatory rules to follow, especially when it comes to handling patient information. There are urgent and sensitive packages moving throughout the hospital system, like drug shipments that need to be transported quickly and at a certain temperature.

Many hospitals have inefficient sending and receiving processes, partly as a result of this complexity. But, administrative staff also tend to send things the way they always have, even if their practices are out-of-date. When shipping and receiving processes aren’t managed well, it can be a drain on staff resources, and the costs involved can skyrocket unnecessarily.

Sending and Receiving Challenges

There are three areas in particular that lead to costly shipping and receiving operations in hospitals: organization, mail service selection and chain of custody.

The sending process in many hospitals is disorganized – anyone from doctors to administrative staff can send anything, using whatever method they’d like. Centralizing all sending and receiving operations can help hospitals improve efficiency, and provide complete control and visibility.

Hospitals also struggle with selecting the right carrier services for their sending needs. Many hospital mailings require the use of Certified Mail®, but hospitals need to make sure they’re always choosing the most cost-effective, efficient mail service for each mailing. For example, using electronic return receipt for certified mail not only greatly improves workflow and compliance, but also saves up to 40 percent of the cost with the USPS®.

Chain of custody issues are rather complex. The movement of health records, lab results, legal documents, medical supplies, pharmaceuticals and more need to be tracked closely as they’re sent throughout the hospital network. That also includes tracking assets, like hospital beds and IV poles, as they move around within the hospital itself. How do hospitals keep track of all these assets and ensure that each mailing reaches the proper destination, in a timely fashion?

Stay tuned for the second part of this series, where we'll go into greater detail about what these shipping challenges entail, and how hospitals can solve them.

Sending and receiving operations in hospitals are complicated. To learn more about how to solve these challenges, read our eBook, “Rethinking the way hospitals send and receive: How to solve the biggest pain points of sending and receiving packages and mail in hospitals.”

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