The 5 Biggest Things Hospitals Waste Money On

Written by on November 2, 2012 in Health - No comments | Print this page


As a provider of medical services for patients across a large area, hospitals are often the first choice of healthcare services. For this reason, hospitals are usually the largest healthcare entities within a community. They are responsible for emergency services, preventive care, and employing hundreds of local employees. Based on its sheer size and technology, hospitals are also notorious for inaccurate documentation of supplies and their lack of resource preservation.

Wasted Money

Though hospitals strive to conserve money when possible, oftentimes the size and complexity of hospital systems makes it impossible to monitor everything. As a result, the following list exemplifies the areas in which hospitals waste the largest amounts of money:

Unnecessary Testing

While it is second nature for hospital employees to order tests for any suspected problems, too many tests can actually lead to substantial monetary losses. In today’s society, many hospital employees order tests in order to safeguard themselves from malpractice lawsuits. However, oftentimes the conditions that patients are tested for can be detected by less invasive, less expensive methods. This liability concern costs the health care system an average of $200 billion every year!

Inefficient Claim Processing

One of the tasks that patients and office clerks dislike the most are the numerous forms that patients must fill out upon arrival to the hospital. Not only do these forms waste resources, like paper and ink, but they are also time-consuming. Every insurance company utilizes differing claim forms, which can make the process time-consuming and complex even for the most experienced staff members. In addition, many hospitals are inefficient in claims processing, leading to additional errors that are time-consuming and costly. Yet, the use of pre-certification insurance claims are on the rise, which would minimize claim complexity at healthcare facilities.

Emergency Room Utilization

Since hospitals are required by law to treat every individual, emergency room staff have no choice but to serve every patient. While some patients exhibit life-threatening injuries or conditions, some merely utilize the emergency room as an urgent care clinic. Treating patients who display minor symptoms or moderate conditions provides an avenue for resource and time defects. In order to lower unnecessary expenses, preventive care and compliance with physician suggestions can reduce the formation of more serious conditions.

Medical Errors

Though many healthcare facilities invest in costly medical error detection systems, errors still cost hospitals over $17 billion a year. Patient information errors can lead to medication/treatment errors that can cost hospitals thousands of dollars. Not to mention, claim and billing errors are abundant. Although enhanced medical technology is vastly eliminating recurring medical errors, large numbers of patients with various conditions and testing requirements can allow errors within even the most advanced systems.


More often than not patients are forced to visit hospitals and healthcare facilities numerous times for related conditions. Health insurance companies have begun to place restrictions on allotted time for appointments. As a result, physicians have a limited time to treat patients. This can lead to numerous return visits, improper medication usage, and recurring symptoms that can cost hospitals. In essence, premature discharge due to time constraints and a lack of patient compliance can increase the probability of additional visits.

Although hospitals are the main locations of treatment and life-saving technology, they also comprise some of the most devastating financial statistics. By improving efficiency, reducing errors, and promoting effectiveness, hospitals can become a key played in resource conservation and primary health care services.

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This is a guest post.  Lindsey Fowler is a medical data analyst and guest author at, where you can read her latest article on how to become a medical data analyst.


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