Reducing Variability and Cutting Cost Through Utilization Metrics and Transparency

“In the age of value-based purchasing, health care institutions must demonstrate high-quality care to improve overall value to the patients they serve,” said Barbara Strain, MA, CVAHP, director value management, University of Virginia Health System, speaking during a session at the 10th Annual Health Care Supply Chain Management Summit.

In her talk, Strain spoke on the importance of engaging physicians to help provide quality care while lowering the cost of care. She encouraged participants to share their institutional data on supply pricing and utilization per procedure with their physicians. She said that utilization metrics can be used to show physicians usage patterns of various supplies as well as be used as internal benchmarks to reduce cost. 

“Physicians proactively respond to accurate internal data and self-correct usage patterns of various supplies to effectively lower costs,” she said. “Internal benching among physicians performing the same procedures can highlight between 10% to 20% savings within service lines.”

To help reduce variability and cut cost, Strain said several steps can be taken to track cost per case by service line. These include collecting baseline pre-initiative data, setting up 2 to 3 meetings per year to review status and supply driver categories for next opportunities, and providing 6 months of data on procedure or use history by service line to each surgeon and chair with the goal to provide real-time next day supply use history per case. 

Underlying all of this is the need for transparency at all levels of the organization to achieve the shared goal of providing cost-effective patient care, she said.

She also spoke on integrating supply chain and value analysis into patient experience and quality outcomes. After describing a number of recent proposed rules and findings by CMS for the Inpatient Prospective Payment System, she again urged organizations to be transparent and share information with staff. 

For example, she said that in 2015, CMS kept 1.5% of Medicare reimbursements that resulted in about $1.4 billion in value-based incentives. She urged participants to use value-based purchasing calculators to understand their share of the amount CMS withheld and where they can improve to earn back those dollars.

Overall, she said that the key quality and patient indicators that organizations should focus on are mortality rates, team member safety, falls, catheter-associated urinary tract infections, central line associated blood stream infections, pressure ulcers, patient experience, and readmissions.

“When quality is improved, costs are reined in, creating a value-rich environment in which your margins are improved,” she said. “Give your best to be your best.”—Mary Beth Nierengarten