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Optimization and Efficiency Drive in Hospitals in Western Europe

  • August 2014
  • 20 pages
  • Frost & Sullivan
Report ID: 2357773


Table of Contents

Services Redefine Sterilization Sector

With increase in patient population and reduction in hospital budgets, optimization and cost efficiency are the buzzwords in the hospital sector. As most of the innovative products are made of varying materials, they require varied sterilization standards. Sterilization is considered to be a non-core activity by the clinical community. The real demand is to improve sterilization standards to reduce risk of infection, at reduced costs. Hence, there is a higher preference for outsourcing than improving in-house functioning. This deliverable provides insights into the real need in hospitals for sterilization services and the various trends supporting the need for sterilization services in hospitals in Western Europe.

The Changing World of Healthcare
In today’s world, health is more than a medical problem. It is increasingly becoming difficult to obtain high-quality healthcare in a cost-efficient manner.
The European Union had million1 inhabitants in 2013, with about %1 of them aged above years, and about % aged above years. By 2060, the European population is estimated to reach approximately million, with % of them aged above years. There will also be a sharp decline in the population aged between and years2. This will directly impact the working age population and therefore, the economy of the region.

Health sector accounts for around % of the GDP spending annually in the European region3. From 2007 to 2010, almost half of the European countries experienced a decline in the health share of the GDP spending3.

In Spain, the healthcare expenditure was growing constantly at a rate of % from 2003 to 20084. After the economic crisis, the growth rate declined steeply. Despite the decrease in spending of late, the government is taking measures to further reduce the budget, until the healthcare expenditure becomes % of GDP in 2016.4 The National Reform Programme 2013 and the Updated Pro-Stability Programme of Spain 2013-2016 are initiatives taken to optimize healthcare expenditure.

Unemployment in European Union rose from % of the total population in 2008 to % of the total population in 20123. Because of the economic crisis and lack of affordability, both government spending on healthcare and out of pocket expenditure have taken a blow, and have reduced since 2009.

In the United States, about % of the total healthcare expenditure is spent on hospital care, and % on physicians and other clinical services. The remaining % is spent on personal healthcare and other health expenditures5.

Hospitals are considered to be the skeletal system of the healthcare system. Increasing patient population, budget constraints and shortage of resources are major factors impacting the current medical world. Hence, efficiency and optimization are the buzzwords in the management world of hospitals.

Operating Room: Need to Optimize Utilization of the Resource
It is estimated that about billion people worldwide have inadequate access to an operating room, thus making operating rooms a scarce resource6. In Western Europe, the number of operating rooms is estimated to be per people, while in Eastern Europe, there are rooms per. In Central Europe, there are rooms per . Developed nations tend to have an average of 10 rooms per people6.

The volume of surgical procedures conducted has been increasing steadily over the years. In Germany, there were million operations and medical procedures conducted in patients in hospitals in 20127, while there were only million of the same conducted in 20088. This reveals an increase of around million procedures in years, despite a decrease in the number of operating rooms due to closure of hospitals.

Western Europe continues to have the highest volume of surgeries conducted annually. This supports high utilization of the resource, and additionally creates extreme pressure to increase efficiency of the functioning of the resource to avoid additional expenditure.

There have been many initiatives across countries, similar to an initiative from NHS Institute called The Productive Operating Theatre (TPOT). This modular improvement programme aims to improve theatre safety, efficiency and patient care in the United Kingdom (UK), saving € million for an average UK Trust9.

The expenditure related to consumables increases with the number of operations performed. However, operational cost remains fixed and does not increase proportionately to the volume of procedures performed. Hence, improving turnover is likely to result in a reduction in the unit cost of surgery. Surgical delays directly reduce the utilization of the operating theatre and add to the expenditure. In an audit conducted in Broomfield and St John’s operating theatres in the United Kingdom, it was found that delays in surgery start time alone could account for loss equivalent to € million per year. This additional expenditure, due to low utilization, impacts unit costs of surgery9. The mean delay of the time associated with each procedure due to equipment failure was around minutes, which adds significantly to operating theatre costs10.

These result in growing pressure on hospitals to improve process efficiency, and optimize the functioning of operating theatres and other resources to reduce healthcare expenditure.

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