How to overcome cost complexities and drive quality improvement

Accessing accurate data to support decisions throughout the care continuum is critical to providing better quality care and better patient experience, and improving outcomes. It is also important to improving margins in today's financially stressed healthcare system.

In a November Becker's Hospital Review webinar sponsored by Syntellis Performance Solutions, Deb Bulger, vice president of strategic partners, and Jay Spence, vice president of healthcare industry solutions, both of Syntellis, discussed the importance of actionable data and an advanced analytic framework for success.

Three key takeaways were:

1. As health systems struggle with financial challenges, margin improvement efforts must shift from operational to clinical areas. According to Mr. Spence, operating margins have decreased 47 percent while the total expense per adjusted discharge has increased nearly 10 percent. "Financial pressures are real and margin improvement continues to be a critically important, strategic imperative for organizations," he said. "We need to realize that this work is going to be shifting into more challenging areas. It's increasingly moving away from operational areas into more clinically focused areas."
   
   
2. Having access to actionable data that drives quality improvements is critical to improving margin. "Data governance must bring together financial and clinical information to help organizations understand quality dynamics, create transparency around cost variation and adverse clinical events and appreciate the financial impact of all that," Mr. Spence said. "The question is, 'How do we put this information in the hands of the folks who can drive change in the organization?'"
   
   
3. Syntellis proposes an advanced analytical framework focused on enterprise decision support. "Everything done for a patient comes at a cost," Ms. Bulger said. "How you manage that cost has a direct impact on your margin." She recommended a patient-centered framework to understand costs and margin, just as health systems use a patient-centered approach in delivering quality care.
   
   The components of this framework are:

• • Opportunity analysis. While 80 percent of finance leaders rate cost reduction among their most important activities, 64 percent are not confident in the accuracy of their cost accounting solutions. Flexible, accurate and advanced costing methodologies such as Syntellis' Profitability Dashboard are critical to identifying the highest priorities.
    
    
  • Physician variation. More than one-third of healthcare waste is attributed to care delivery issues such as poor care coordination, over-utilization and low-value treatment. One study claimed that 21 percent of healthcare activities are unnecessary. "External comparisons looking at what's happening with utilization and productivity among other physicians in the same service can help you understand the variation in your market," Ms. Bulger said. An excellent example is looking at implant utilization and cost.
    
    
  • Clinical complexity. Up to 35 percent of treatment variability costs are attributed to patient severity. By understanding the complexity of patients, health systems can better determine whether certain procedures are appropriate for those who have a very high severity of illness as well as a higher likelihood of mortality.
    
    
  • Process inefficiency. Inefficient patient flows, delays and supply availability can increase cost. For example, the three-month cost of idle OR time due to first-case delays exceeds $300,000. Integration of timestamps that examine duration sequencing can help identify improvement areas.
    
    
  • Unexpected outcomes. During a six-month period, $74 million dollars were spent in the U.S. healthcare system due to central line infections. By looking at the continuum of care between care settings, health systems can analyze patient safety indicators and quality measures in conjunction with costs.
    
    
  • Patient experience. "Those conditions in which patients live, work and play such as housing and food insecurity, as well as factors such as race, ethnicity, income and education levels, can impact up to 80 percent of healthcare outcomes," Ms. Bulger said. For example, one health care provider found that addressing food insecurities was associated with a 38% decreased rate of 30-day readmissions compared to baseline."¹ Health systems can change how they care for those patients to address these factors by integrating data into decision support.
    
    
  • Payment impact. Negotiating payer contracts and managing pay-for-performance programs carry a cost. "Currently 50 percent of the commercial and government payer programs use some kind of alternate payment system where incentives and penalties are based on the quality measures," Ms. Bulger explained. "By 2030, all Medicare beneficiaries will be covered under an accountable care model with shared risk and increased value-based care capabilities for providers."

By providing actionable data to decision-makers throughout the care continuum, healthcare systems can improve the quality of care and improve financial margins for a more sustainable future.

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¹ Martin SL, Connelly N, Parsons C, Blackstone K. Simply delivered meals: a tale of collaboration. The American Journal of Managed Care. 2018 Jun;24(6):301-304. PMID: 29939505.