Raed Khoury, who has been in the healthcare industry for more than 40 years, is leading a multimillion-dollar initiative to address one of its biggest challenges: waste.
According to a 2020 study, wasteful medical care costs the U.S. between $600 billion and $1.9 trillion every year. In 2020, Mr. Khoury and other leaders at Madera, Calif.-based Valley Children’s Healthcare developed a strategy to reduce this waste and maximize clinical value. From Oct. 1, 2023, to Dec. 31, 2024, the system saved $7.82 million through its clinical value program.
The program targets six areas: evidence-based care, operating rooms, pharmacy, laboratory, technology and finance.
For evidence-based care, Valley Children’s uses the American Board of Internal Medicine Foundation’s Choosing Wisely initiative, which launched in 2012 to address overused healthcare tests and treatments.
“If you look, you will find something — there is definitely waste,” said Mr. Khoury, Valley Children’s vice president of quality, patient safety, research and clinical value.
For example, Choosing Wisely and the American Academy of Pediatrics advise against radiographs for children presenting with asthma, bronchiolitis, croup or first-time wheezing. X-rays rarely yield positive findings for these cases and may lead to unnecessary radiation exposure, higher care costs and longer emergency department stays.
In fiscal 2024, more than 180,000 patients received care at Valley Children’s, which serves 11 counties. The system also recorded more than 600,000 patient visits.
Mr. Khoury said reducing medical waste is critical, especially as hospitals operate on tight margins.
“The most important factor leading to mission success, in my opinion, is a sound financial condition,” he said. “You have to be able to guard your finances so you can provide the quality of care that is needed. I’ve read some sad statistics about our nation’s 6,000-plus hospitals: Almost half or 40-plus percent operate in the red. The median operating margin is about 4% — more reasons to be fiscally responsible.”
Besides implementing Choosing Wisely recommendations, Valley Children’s clinical value program includes standardizing surgeons’ preference cards in the operating room and analyzing medication data to switch to lower-cost alternatives.
In the laboratory, the health system reviews the appropriate utilization of genetic precision medicine. Genetic testing is expensive, Mr. Khoury said, and often unhelpful if results return after a patient is discharged.
“Think of it as spring cleaning,” he told Becker’s. “Do we need this? How can we do this better, [and increase] efficiency and effectiveness?”
A clinical decision support group analyzes the value of interruptive alerts, reducing clinician time spent in the EHR and increasing time with patients.
The finance team quantifies savings from these efforts. Between Oct. 1, 2023, and Dec. 31, 2024, one-time fixes such as switching to cheaper medicines saved more than $3.8 million. Strategic source savings, including OR standardization, are north of $2.1 million. Avoided waste, such as preventing central line-associated bloodstream infections, contributed another $1.73 million in savings.
“We owe it to the people we serve to be fiscal with our financial acumen,” Mr. Khoury said, “so we are able to reinvest it to help the kids be better.”
