New Jersey’s Hospitals and Health Systems Decade Long Attention to Efficiency

Pursuit of efficiency is not a new concept for most healthcare providers. U.S. healthcare costs are growing at an unsustainable pace. Hospitals remain the largest cost component of the healthcare system and as such have been under constant pressure to provide care more efficiently. This pressure is being emphasized by the increased focus on value-based payments and a savvier consumer base.

The last decade has seen a flurry of hospital merger and acquisition activity at an unprecedented rate in New Jersey. Mergers have the opportunity to improve operational, clinical and financial value. Blending economies of scale with best practices across system facilities and aligning strategic philosophies can lead to efficient care delivery and improved quality of care. NJHA’s Center for Health Analytics, Research & Transformation (CHART) analyzed New Jersey hospital data from 2006 and 2016 to measure the magnitude of improvement in the efficiency of care delivery achieved. The results were overwhelmingly positive both within the state and when comparing the cost of hospital care in New Jersey to the rest of the country.

Controlling hospital costs in an environment where payments are fixed and oftentimes set by external organizations is critical if achieving efficient care delivery is a goal. The data shows that New Jersey’s hospitals have effectively demonstrated a commitment to a targeted, purposeful and long-term approach to efficiency, establishing the Garden State as one of the most efficient states for hospital care in the country.