Improving Hospital Performance

The Advisory Board, now part of UnitedHealth Group’s Optum division, and what isn’t, has long been a premier advisor to hospitals.  It issues a short analysis of hospital quality and its relationship to quality.   (Advisory Board Paper)   The paper was based on data from 468 hospitals, with more than 20 million patients, broken down across a number of service lines and diagnosis groups.  The analysis focused on savings achievable from reducing clinical variation.  The researchers identified a cohort of top-performing hospitals, using standard quality outcomes measures, like complication rate.  This set of hospitals, while delivering the best outcomes, also had lower cost care for 82% of all diagnosis groups.  If all hospitals had similar costs, they would save up to $29 annually, while delivering better quality.  The typical hospital currently is spending up to 30% more to deliver the same or worse quality as this top-performing group.  According to the Advisory Board, hospital CEOs rate sustainable cost control as their number one goal for 2018 and the number two goal is related; developing innovative approaches to expense reduction.  Reducing clinical variation is one approach to produce these cost reductions.  One example was a hospital that limited variation in lab test ordering and blood transfusions, creating significant savings.  The hospital then developed care standards around stroke and sepsis, saving $800,000 annually.  It takes a lot of internal time and effort, however, to achieve these savings, and typically adherence to standards has to be constantly monitored and encouraged, or variation reappears.  But hospitals are under greater pressure to control costs of all types and this approach appears to have some potential to reach that goal.