Assembling an in-house team to assess physician performance and make needed changes is bound to shake things up a bit, but it can also lead to a big payoff in terms of reducing disparities between doctors and saving on unnecessary expenses.
Franciscan Health proved that to be true. The 14-hospital system with facilities in Indiana, Illinois and Michigan, brought together a clinical operating group, or cog, to analyze the system's rich store of data. In doing so, it assessed physicians' performance and unearthed rather revealing metrics about existing distinctions between the highest-performing physicians and the average-performers.
The cog and the program, in fact, enabled Franciscan to save approximately $665,000 per physician every year.
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It also raised the question: Why aren't all hospitals and networks doing essentially the same thing?
Developing cost reduction targets remains an elusive goals for many health systems. According to a Kaufman Hall analysis, in fact, only 50 percent have cost reduction targets for the next five years; another chunk have set a modest goal of 1 to 5 percent.
Here's a look at what other hospital finance and operations executives can learn from Franciscan.
Cog sprouted from the C-suite
David Kim, director of strategic and decision support at Franciscan Alliance, it took drive and support from leadership to implement the cogs and make them a priority. From an analytics perspective, it entailed allowing the analysts to look at the data and find areas of significant variation.
Jennie Dulac, vice president of clinical solutions at Kaufman Hall, said that such programs frequently start at the board level.
"The medical directors and nursing managers of any clinical unit really become the nexus of being able to parlay that data and enact change in protocols or processes," Dulac said. "It's absolutely critical to have them involved. You create an infrastructure whereby you can share those best practices."
To enforce physician improvement and better resource utilization, Franciscan created a new position, a physician adviser who was essentially a kind of right-hand man for the chief medical officer to oversee adherence and compliance with evidence-based order sets, blood utilization protocols and other measures, as a means of adding another layer of enforcement and support.
The physician advisers were an extra position, and thus an added financial investment, as were interdisciplinary rounds. But those were the only investments, and five years later, the cost reduction metrics have improved greatly.
All about the data
Franciscan's cog team looked at four key pieces of data that indicate performance: length of stay, readmissions, risk-adjusted mortality rates and adjusted direct costs.
The best performing doctors had a 0 percent mortality rate for heart failure patients, compared to 5.5 percent among the system's lowest performers. The average stay was 39 percent lower among the top docs, 30 day readmission rates were 39 percent lower, and direct costs were 25 percent lower.
Opportunities to shore in costs became apparent when they started examining data relative to length of stay.
"Essentially it's a simplified criteria starting with length of stay, and identifying those who were significantly better," Kim said. "After that we looked at the readmissions rate, and because we didn't have a nationally adjusted rate to go by, we went by our own system. We're a 14-hospital system, so we had a big denominator to work with."
The data naturally separated itself in terms of cost, which is how the system was able to identify some of the differences in resource utilization. That's where the cogs entered the picture. Chief medical officers, grouped with multidisciplinary teams, looked at the analytics regarding where care variation existed.
"Every facility cog is a little bit different," said Kim. "Basically we created action groups. One example is blood utilization -- in some cases it's 50 percent lower in use per patient. Typically we'd start with the analysis. Then we'd go on to create a goal and a scorecard around those goals."
That approach was key to reducing the system-wide utilization of blood by about 38 percent.
Financial and clinical teams working hand-in-hand
Dulac said 96 percent of hospital executives believe reducing costs is critical to success, yet so few have cost reduction targets as aggressive as those of Franciscan Alliance. It doesn't have to be that way.
"Decision support, whether it's from the financial side of the house or the clinical side of the house, should work hand in hand," said Dulac. "You need to set up mechanisms and processes within organizations in order for that to happen. It's an important partnership, not only in an era of value based care, but also with support from the initiatives and what it means from a cultural perspective … to take data from a system level all the way to the patient level."
Dulac acknowledged that such work can get expensive in its own right but, as a former chief quality officer, she stressed that just as finance departments often enjoy robust resources, quality teams need the tools to examine every set of outcomes.
"Data linked to a chain of accountability is exceptionally helpful," said Dulac. "I think the focus on the high-volume, high-cost clinical condition is absolutely key, not only in a value based reimbursement system, but because that's how hospitals are organized and that's how physicians practice. Separating those patients accordingly -- total hip, total knee, heart attack -- whatever the clinical condition is, it's imperative to start the work there."