Driving Unwarranted Clinical Variation Out of a Hospital: Key Strategies

In an April 24 webinar hosted by Becker's Hospital Review, experts from Objective Health, a McKinsey Solution, discussed strategies for hospitals to reduce unwarranted clinical variation.

Eric Flyckt, MD, director of client analytics, and James Stanford, client service executive, from Objective, and Ben Evans, MD, with McKinsey & Company, presented the webinar.  

The presentation began with an interactive poll on how much effort hospitals or health systems are putting into the reduction of clinical variation today compared to two or three years ago. Seventy-two percent of webinar participants said their organization is putting more effort into reducing clinical variation, while 26 percent said the scope of effort remains the same.

In another survey, 56 percent of participants said they have found the greatest level of opportunity to reduce variation in surgery. Forty percent said general medicine and 3 percent said maternity care and pediatric medicine. Dr. Evans said the levels of variation for surgery and general medicine are quite similar, but the drivers are slightly different.
"In surgery, you'll see greater variation driven by clinical products, and in medicine the focus will be more around length of stay."

Dr. Evans also distinguished between clinical variation that is warranted and unwarranted. "There will always be a portion of variation that is completely warranted," he said. The strategies and analyses presented in the webinar focused on hospitals' unwarranted variation, which involves treatment protocols, physicians' clinical supply choices and resource utilization.

There are three broad categories of unwarranted clinical variation:

1. Underuse. This involves discontinuity of care and a lack of systems that would facilitate the appropriate use of services. This results in insufficient use of care.

2. Misuse. This involves the failure to accurately understand or communicate the risks and benefits of alternative treatments, and inappropriate prescriptions for medications or tests. This results in improperly utilized care.

3. Overuse. This involves an overdependence on the acute-care sector, and a lack of infrastructure necessary to support the management of chronically ill patients in other settings. This results in the inappropriate use of care.

Dr. Evans described two approaches to identify unwarranted variation: top-down and bottom-up. Top-down analysis identifies levers that are contributing to the variation, such as medical protocols, resource utilization and OR/cath lab practices, including implant choices and OR preference cards.

Bottom-up analysis identifies highly variable DRGs. Once those DRGs are identified, hospitals assess them further to confirm whether the variability is unwarranted or due to legitimate factors. If it's unwarranted, hospitals then identify the key drivers of variability within each DRG and estimate the potential value of reducing its variation.

In another interactive poll, attendees were asked how difficult it is to go after opportunities to reduce clinical variation compared to more traditional cost-saving strategies. Sixty-eight percent of attendees said these opportunities are more difficult.

"This is quite typical in our experience with clients as well," said Dr. Flyckt. "Many health systems feel this is a particularly challenging set of opportunities to go after. First of all, it's a newer area and many hospitals don't have experience with these types of opportunities. In addition, there are a particular set of issues you face going after clinical variation that you don't in other areas."

To overcome challenges that make these savings opportunities more difficult to realize, Dr. Flyckt described four elements that need to be in place to capture opportunities in clinical variation:

1. Clinical engagement. Clinical leadership and broad engagement is required to drive sustainable change. Clinicians should be assigned a clear role in efforts to reduce clinical variation. Data and rationale behind variation reduction efforts should be shared with key clinical staff. Hospital leaders should build understanding and support, and gather input to help guide early phases of the effort. Leaders should also rely on clinicians to drive the initiatives from design to completion.

2. Supporting resources. Dedicated resources, both people and capital, are essential to the successful completion of any project. "These types of issues tend to be more complicated and involve a larger number of people," said Dr. Flyckt. It's critical that leaders ensure they have enough time, and people with the proper skill sets to successfully implement a variation reduction strategy.

3. Change management. This is an application of the principles that support change to ensure success. "As it is, most change initiatives fail. In this situation, you're actually more likely to fail than in others, so a clear understanding of what it takes to manage change effectively is very important," says Dr. Flyckt. This includes careful planning around how teams set up and tackle pilots and projects, and steps they take to support those projects throughout the design and implementation phase.

4. Analysis and tracking. The ongoing ability to assess opportunities, share information and measure impact is critical to focusing efforts on providing feedback. "We've shown some of the analytical capabilities that are important in identifying these opportunities. Similar capabilities are required as the team designs their initiatives," said Dr. Flyckt. He also emphasized that clinicians are particularly more likely to be driven by meaningful data. "It's very difficult to get clinicians bought into an effort without good data."

View or download the Webinar by clicking here (wmv). We suggest you download the video to your computer before viewing to ensure better quality. If you have problems viewing the video, which is in Windows Media Video format, you can use a program like VLC media player, free for download by clicking here.

Download a copy of the presentation by clicking here (pdf).

More Articles on Clinical Variation:

10 Hospitals Join Program to Test Link Between Costs, Clinical Variation
4 Clinical Case Management Focus Areas to Reduce Physician Variation
Identifying Inefficiency: 3 Clinical Areas to Examine

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