Quantifying the Economic Impact of Communication Inefficiencies in US Hospitals

Care delivery is a complex enterprise that involves multiple interactions among multiple stakeholders. Effective communication between these dispersed parties is critical to ensuring quality and safety and improves operational efficiencies. Time and motion studies in hospital settings provide strong evidence that care providers doctors and nurses spend a significant proportion of their time obtaining or providing information (i.e., communicating). Yet, surprisingly, no studies attempt to quantify the economic waste associated with communication inefficiencies in hospital settings at a national level. Our research focuses on developing models for quantifying the economic burden on hospitals of poor communications. We developed a conceptual model of the effects of poor communications in hospitals that isolates four outcomes: (1) efficiency of resource utilization, (2) effectiveness of core operations, (3) quality of work life, and (4) service quality, identifying specific metrics for each outcome. We developed estimates of costs associated with wasted physician time, wasted nurse time, and increase in length of stay caused by communication inefficiencies across all U.S. hospitals, using primary data collected from interviews in seven hospitals and secondary data from a literature review, the Bureau of Labor Statistics (BLS), and the Agency for Healthcare Research and Quality (AHRQ). We find that U.S. hospitals waste over $12 billion annually as a result of communication inefficiency among care providers. Increase in length of stay accounts for 53 percent of the annual economic burden. A 500-bed hospital loses over $4 million annually as a result of communication inefficiencies. We note that our estimates are conservative as they do not include all dimensions of economic waste arising from poor communications. The economic burden of communication inefficiency in U.S. hospitals is substantial. Information technologies and process redesign may help alleviate some of this burden.