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Reducing cost through clinical redesign

Over the last seven months, St. Joseph Health System (SJHS), a large healthcare organization located in California and western Texas, has been using a multi-disciplinary approach to engage its physicians and clinicians in understanding the impact of clinical practice patterns and resource variability.

During a breakout session on Tuesday at the ANI: 2012 HFMA National Institute conference in Las Vegas, Tammy Alvarez, director of evidence-based care and clinical effectiveness at SJHS, and Denise Hartung, director of Deloitte Consulting, discussed the ways in which Deloitte’s Clinical Effectiveness/Efficiency Framework (CE2), has helped SJHS provide the right care to the right patient at the right time and made the patient and their experience the health system’s number one priority, among other benefits.

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“The key principles of CE2 are engaging clinical and administrative leadership, reducing variability and improving reliability, and hardwiring evidence-based practices and continuous improvement,” said Hartung. “The healthcare system in the country has gotten to a different place than it once was, so we need to make a change in how we think about delivering care.”

Hartung said using the CE2, a healthcare system develops a DRG, or clinical bundling approach, that engages physicians in the cost reduction process. Alvarez used the CE2 to help manage the SJHS sepsis and stroke programs.

“We frequently go into organizations looking for cost reduction opportunities. We look at clinical bundles with potentially the biggest impact to work on reducing readmissions, physician financial alignment, reducing complications, decreasing mortality, cost variability, and strategic focus,” said Hartung.

Alvarez said SJHS has a vision to create a sustainable infrastructure for the spread of evidence-based clinical practice using four major functions including convening clinical and operational experts in order to develop evidence-based toolkits that incorporate clinical and operational best practices. The toolkits are then presented to the ministries along with clearly-defined clinical and implementation expectations. After the adoption of the toolkits, each local ministry has the opportunity to adapt the toolkit to their local environment, with operational support facilitated by the broader health system.

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“This is about sharing across the system. Ministries are sharing best practices and what’s working and what’s not working,” said Alvarez. “ It’s important to not only be transparent, but have honest conversations. This initiative brought our CFOs and CEOs together. It’s about all the systems working together and how their work can overlap. At the end of the day sometimes you’re so busy, you don’t realize the importance of thinking of your systems working all together.”

Alvarez said from using CE2 so far, she has learned a number of important lessons that include getting the entire executive team on board, engaging the CFO early on, understanding and listening to the physicians, and realizing the limits of evidence-based practices.

“I think what’s really changed is the type of conversations our teams are having. I think there was a lot of skepticism at first but now doctors are sitting down and having these conversations and want to be a part of these teams,” said Alvarez. “There’s an excitement about fixing something that’s been broken. It’s a real positive energy.”