How AI Is Helping Hospitals Achieve Cost Savings

Feb 27, 2024 | Blogs, Featured

Hospitals and health systems are achieving profitability for the first time since the beginning of the COVID-19 public health emergency. While healthcare organizations are beginning to regain footing in the wake of the pandemic, they are hardly on firm ground: margins remain slim, growth has been uneven, and overall expenses continue to rise. Achieving sustainable financial performance remains a key concern for healthcare decision-makers. 

The advent of generative artificial intelligence (GenAI) in healthcare offers a vital opportunity for hospitals and health systems seeking to both reduce labor and operating costs while improving clinician performance and productivity. Healthcare has long been viewed as one of the industries most likely to benefit from AI-enabled technologies. Yet despite this prediction, overall adoption rates have had a slow start. Concerns around accuracy, liability, return on investment, and misinformation have preemptively slowed the adoption of technologies that have proven to drive real value to healthcare organizations. AI shows immense promise in areas such as precision medicine, population health, diagnostics, and treatment—areas that often fall under the Food and Drug Administration (FDA) regulations for Software as a Medical Device. While implementation of AI in these areas is speculative at this time, generative AI has performed exceptionally well at the synthesis and summarization of documentation. One such use case of AI-enabled technology—ambient medical documentation—is driving real value for healthcare organizations now. 

Ambient medical documentation has delivered the most impactful early successes of AI-enabled technology in healthcare. Leveraging proprietary large language models, generative AI, and structured data sets, these ambient products automate tedious administrative tasks like medical charting. Tasks that once took clinicians hours to complete each day can now be completed in seconds.

Automating tasks like charting improves measurable productivity-based metrics such as increased clinician productivity, more accurate billing code accrual, and reduced insurance denials. In addition, it also helps control labor costs that often fall outside of the traditional scope of accounting by reducing clinician burnout driving turnover, staffing shortages, and reliance on medical scribes and contracting.

Improving Clinician Productivity Through Healthcare AI

The electronic health record (EHR) has yielded substantial gains for patient well-being. Centralizing patient records in a digitized space has reduced the incidence of medical errors, enhanced data accessibility, and improved billing. However, while the EHR has improved some clinical workflows such as appointment scheduling, it has also become one of the biggest barriers to overall productivity.

It is estimated that clinicians now spend up to 4.5 hours every day on charting. Medical-surgical nurses spend over half of their day on administrative tasks like medical documentation and care coordination, meaning the majority of their time is spent away from patients. The EHR is seen as the biggest culprit for the loss of patient-facing time, and the problem has only grown worse. 55% percent of physicians reported that time available for individual patients has declined since they started practice.

Medical charting is critical for achieving the best patient outcomes, but it also reduces the amount of time clinicians spend with their patients and, by extension, the number of billable hours that can be accumulated in a day. Ambient medical documentation provides a much-needed solution to this growing problem. Through the power of speech-to-text technology, ambient medical documentation extracts relevant data from clinician-patient interactions and converts the data in real time to medical notes. By completing medical note drafts on behalf of clinicians, AI-enabled charting helps clinicians prioritize attentive patient care. Patient visits augmented by this technology allow clinicians to focus on the patient, rather than spending time entering data into the EHR, improving the quality of patient care. At the end of a visit, the recorded conversation is transcribed into a draft note summarizing details of the encounter and providing clinicians with the opportunity to edit or change the note for improved accuracy.

Clinicians empowered by ambient medical documentation have reported seeing significantly more patients every day and spending less time charting after hours. While the improvements to productivity drive substantial value on their own, the benefits go well beyond the number of patients seen in a day.

The quality of medical notes has historically varied across departments and specializations. These records play a key role not only in patient outcomes but also for insurance purposes—billing inaccuracies and insurance denials can significantly impact the bottom line of health systems. It is estimated that the U.S. healthcare system loses up to $935 million a week from medical billing errors. From this loss, 63% of billing errors come from inaccurate coding, while 44% are related to the quality and accuracy of clinical documentation.

Leveraging AI-enabled documentation not only eliminates the burden of documentation but also standardizes the results to create more accurate and timely notes. More billable codes, or wRVUs, can be captured from each patient visit, which can amount to a substantial increase in revenue and fewer denials.

Ambient Medical Documentation Reduces Labor Costs

Rising labor costs have been a substantial challenge that healthcare organizations have struggled to navigate over the past few years. Ambient medical documentation is poised to help control runaway expenses driven by a lack of support, capacity, and staffing.

Since 2020, over 300,000 clinicians have permanently left the workforce, and an additional 47% of remaining clinicians have indicated that they are planning to leave the profession by 2025. Those who remain have struggled to manage an increased workload with fewer resources, driving burnout and further fueling the cycle of staffing shortages in healthcare across the country. If nothing is done to halt this trend, some estimates project that there may be a shortage of up to 124,000 physicians by 2034.

Download Our White Paper on Job Satisfaction and Cost Savings in Healthcare Organizations

To supplement the loss of clinicians, many healthcare organizations have been forced to rely on expensive outsourced labor: contract nurses’ median hourly rates have risen from $64 to $132 an hour, and demand for these services has increased by 91%. According to data obtained from the American Hospital Association, total contract labor expenses skyrocketed by 257.9% during the pandemic, placing tremendous financial strain on hospitals and health systems. If nothing is done to address the factors driving staffing shortages and turnover, it is projected that clinician labor costs will continue rising at an 11% compound annual growth rate until 2027.

Controlling these numbers requires the industry to make better use of the remaining resources available to them. However, to retain their staff, healthcare organizations need to understand what is causing the mass exodus of clinicians leaving the industry.

While an aging population of clinicians prompted many to leave at the beginning of the COVID-19 pandemic, burnout remains a decisive factor that has contributed to the staffing shortage. As previously mentioned, clinicians can spend up to half of their day completing medical documentation that takes them away from the patients that they serve. In addition to significantly limiting daily productivity, medical documentation has been cited by 71% of clinicians as a top reason for dissatisfaction in their current role. Documentation drives burnout.

By leveraging AI-enabled tools like ambient medical documentation, hospitals and health systems can help clinicians regain control over administrative tasks that are driving turnover and reducing the number of patients seen every day. Automating these tasks further reduces labor costs by alleviating the need for on-site medical scribes. With more time available to see patients, clinicians can navigate their workload more easily, improving job satisfaction and reducing overall labor costs.

Clinicians have reported a significant decline in overall job satisfaction. Before the pandemic, a survey by Medscape reported that 75% of clinicians reported a positive sentiment about their role—that number is now at 48%. To reduce turnover and the need for contract labor, hospitals and health systems require solutions that can mediate the need for medical documentation with unmanageable workloads. AI-enabled technology is aptly suited for this task.

How Augmedix Improves Productivity and Cost Savings in Health Systems

The financial climate is steadily improving for hospitals and health systems around the country. Yet margins remain low, and growth is volatile. Achieving financial stability in healthcare depends on investing in resources that are proven to drive productivity, revenue, and cost savings.

For over a decade, Augmedix’s technology has been on the market, making it the first company to introduce ambient medical documentation to market to hospitals and health systems. Augmedix’s suite of AI-enabled ambient medical documentation products easily nests into the workflows of busy clinicians, offering a turnkey solution compatible with most major EHR systems that requires little training and is proven to reduce their workload. Augmedix’s products have proven to offer benefits including:

  • Saving clinicians up to 3 hours every day on medical documentation
  • Boosting work-life satisfaction by up to 40%
  • Increasing productivity by up to 20%
  • Improving wRVU accrual and medical note quality

Augmedix is the only ambient medical documentation product on the market approved for acute and ambulatory settings. These offerings are designed to scale with your organization and provide cost-effective solutions that can be easily deployed and implemented in over 35 specialties. 

Augmedix differentiates itself through its commitment to transparency, security, patient safety, and medical note quality. The company’s applications allow clinicians to review patient data captured from the transcript of the patient encounter, providing unmatched visibility into how our medical notes are constructed. 

Augmedix’s HITRUST certification represents the highest standard for information security, affirming that our core products and cloud services have met demanding regulatory compliance, industry-defined requirements, and appropriate risk management.

Interested in learning about how Augmedix can drive cost savings and productivity in your healthcare organization? Our EHR productivity assessment can help identify which of your clinicians have the greatest opportunity to increase efficiencies and drive additional revenue. Contact our team to learn more, or download our white paper on the statistical links between job satisfaction and cost savings in clinical settings.