Leaking patients: Hospital leaders know it’s a problem, but don’t know the full cost

Hospitals have been losing, or leaking, patients to other systems for years, but the problem is gaining new attention.

More healthcare executives are saying the costs are too high, or simply unknown. Given the financial challenges brought on by the COVID-19 pandemic, healthcare leaders say they are increasingly concerned about confronting patient leakage and getting a sense of the scope of the problem.

Angie Franks, CEO of ABOUT Healthcare, a Minnesota-based technology and consulting company, said the leakage problem can be seen across the industry, regardless of the size of the system.

Angie Franks, CEO of ABOUT Healthcare

“Every single health system has a leakage problem," Franks said.

ABOUT recently released its second annual Patient Leakage & Keepage Report. The company commissioned an independent survey of 138 healthcare executives. Nearly all of them (94%) said reducing patient leakage is a top priority in 2022.

Nine out of 10 (91%) said they aren’t sure they can calculate the exact costs tied to patient leakage. Roughly two-thirds (65%) of the executives surveyed said leaking patients is preventing them from reaching their financial goals.

“They know it’s hurting them,” Franks said.

Franks, whose firm works with healthcare systems to address leakage, recalled telling one organization it could be losing several billion dollars due to the problem.

The system responded by saying that projection could be too low.

High demand, higher expectations

The pandemic is forcing executives to take a closer look at their financial operations, Fanks said. Roughly one in four (27%) said patient leakage has increased since the beginning of the COVID-19 pandemic.

“Health systems have realized through this pandemic how much of their operation has been very reactive and where they lack visibility into different aspects of their business,” she said.

Some hospitals are going to be reducing capacity simply due to a lack of staffing, Franks said. Many health systems have lost workers to the pandemic. About 1 in 5 healthcare workers have left their jobs in the pandemic, and many nurses and doctors say they plan to walk away in the next two years.

At the same time, hospitals can expect to see more volume, particularly as some people have deferred treatment for other health issues due to the pandemic. When COVID-19 hospitalizations hit their peak in the winter, some health leaders said the problem was exacerbated by a rising volume of patients who had postponed treatment for other issues and couldn’t wait any longer.

Hospital officials said they expect to see more patients, potentially with more complications, because they deferred care. “Acuity level is up. Demand is going to stay high,” Franks said.

Healthcare systems can also see patient leakage if they are having trouble transferring patients to other facilities when they’re ready to be discharged from the hospital. If hospitals are seeing an increase in their length of stay and they are at maximum capacity, they can suffer lose the opportunity to serve other patients, Franks said.

Customers are also showing they have higher expectations of healthcare, and that is a factor in some patients going elsewhere.

Most consumers are willing to switch providers, a recent survey found. Patients will switch to other providers with more convenient locations or if it’s easier to schedule same-day appointments.

Patients want to get the same conveniences in healthcare they enjoy from other businesses and services, Franks said.

“They have expectations of healthcare and access to services and conveniences they’re seeking that hospitals and healthcare systems must respond to,” Franks said.

Solve a piece at a time

Hospital leaders need to look closely at their operations to gain an understanding of why they’re losing patients. “You’ve got to start capturing data you can use as a foundation to determine leakage,” she said.

Healthcare organizations should move from a “transaction” approach to dealing with patients and work to build a lifelong relationship.

Hospitals and healthcare systems can lose patients if they don’t help them navigate the system, including what they need to do after they are discharged. Hospitals discharging patients with lengthy instructions, and little guidance, are setting themselves up to lose patients to other providers, Franks said.

Systems need to help coordinate services for patients. If someone is treated in the emergency department and needs additional follow-up care, the hospital must make sure to get patients scheduled for those additional services. “This is how you start addressing leakage,” Franks said.

If it’s clear patients are leaving a system because another provider offers a service, then healthcare leaders can think about offering that service, or at least forming a partnership with the other provider so the patient stays connected to the system, Franks said.

Healthcare systems won’t be able to solve the entire leakage problem, but if they can identify and address even a couple of areas, that can make a difference in revenue, as well as patient care, Franks said.

“It’s going to take a long time,” Franks said. “You’re not going to get this perfect, but you’re solving pieces of leakage.”