Peer benchmarking could lead to the answer.
Tell us if this health system’s challenge sounds familiar: CHRISTUS Trinity Mother Frances Health System, located in Northeast Texas, was facing a staggering potential setback when a number of payer contracts changed. The difference amounted to a $25 million shortfall in their budget’s revenue.
The system’s first reaction might have been to issue an across-the-board expense reduction mandate to make up the budget difference. We all know that can happen a lot in the industry, but it doesn’t always produce the results healthcare organizations need, and quality of care can be impacted.
Instead, this system chose a data-driven, strategic savings approach as the path forward, with an eye on long-term financial independence from these types of shortfalls.
A look at the targeted expenses
Using a comprehensive comparative database, the system was able to benchmark costs, productivity and resource utilization against best-in-class facilities of similar size and demographics.
Leaders identified cost improvement opportunities in areas such as supply, labor costs, length of stay and purchased services — areas where the system was not at the same level as high-performing peers in terms of expenditures.
The benchmarking information from the database was also used as a call to action for staff to find methods of improving processes and cost management. CHRISTUS Trinity Mother Frances leaders formed teams and assigned financial targets. Teams then used the database to answer the question, “If another health system is able to keep supply costs at this level, what can we do to bring our costs to that level with no bearing on our patient care or satisfaction?” The health system also created a dedicated project management office to help guide the process. The results of these efforts (in box below) speak for themselves.
If you’d like more information on how the health system achieved this result, please reach out to us. You can also read the full case study here.
In the July 2, 2013 edition, HealthLeaders Media stated "Healthcare Quality Metrics ‘Abysmal,’ Senate Panel Hears," and this article clearly highlighted the palpable frustration voiced by providers, payers and patients. How do we characterize hospital outcomes that would be meaningful to all three groups and most importantly drive best practices?
If the hospital CEO pronounced that we expect all care in the hospital to be the “best,” it would likely be met with applause and a shrug of the shoulders. Who would argue against such a goal? Yet, how do I, listening to that call to action, effectively contribute to this vision?
Of course, it begins with meaningful, actionable data that effectively captures the essence of both gaps in current performance and strengths upon which to leverage future efforts. Recognizing that leadership often views success from 30,000 feet; change is accomplished one project at a time and by ensuring all stakeholders trust the data and believe he or she can impact the diagnosis or procedure in question.
No doubt the public confusion over healthcare information will persist in the short term. Competing safety measures, migration from process to outcomes metrics, and multiple means to “rate” care have lead to a spectrum of responses; from frenetic reflexive behavior to fearful cautious retreat. It is our call to action to ensure that data is more than just numbers; that it provides clarity to those delivering best practice and accurately reflects the standards of excellence we all expect as patients!
Michael R. Udwin, MD, FACOG
National Medical Director