Operations Management

Variation analysis as a tool to improve value

May 15, 2019 2:53 pm

Two leaders with Providence St. Joseph Health describe the systematic approach their organization developed to improve the value of the care it delivers. Among the keys: integrating cost and outcomes data and effectively communicating findings throughout the organization.

In 2017, leaders at Providence St. Joseph Health launched a strategy to address unnecessary clinical variation in the health system. The goal was to examine practice patterns and identify areas where more-expensive care did not result in better outcomes for the patients served across the system’s 51 hospitals and 829 clinics.

After starting with a focus on orthopedics, the program expanded to eight clinical areas in 2018 and took hold as a central organizational priority. Total savings from the initiative to date is approximately $20 million.

“It’s a start,” says Caleb Stowell, MD, enterprise director for value-based care at Providence St. Joseph Health.

Stowell and Kevin Fleming, COO for clinical program services, will describe the program in detail during a presentation at HFMA’s 2019 Annual Conference, June 23-26 in Orlando. Below, they share insight about the keys to success in such an initiative.

What factors led Providence St. Joseph Health to develop this kind of approach to addressing the cost and value of the care you provide?

Kevin Fleming: Coming from a large health system with many ministries across many different states, we needed a way to speak with a common language across all those sites to our physicians and to our caregivers who are involved in the delivery of care. We needed it to be reliable and very data‑driven.

If we wanted our clinicians to engage with us and our caregivers to engage with us, we needed something that not just focused on cost but also had an emphasis on clinical outcomes. 

How did you go about obtaining the data that you needed to implement this kind of strategy?

Caleb Stowell: It starts with the leadership commitment. That commitment was required to do things that hadn’t been done before, like integrating financial data with clinical data—getting our folks who oversee our financial data system to see the value in that and open that financial data to broader access.

Once that was in place, there was certainly the blocking and tackling of building out the data models that incorporate those two perspectives, and a lot of refinement in analytic methods and taxonomies that make that data more meaningful and more explorable.

All of that was built upon a leadership commitment to answering the right questions and to building the tools that would surface the impact of practice variation across our system.

Once you had the data in hand, what conclusions were you able to draw?

Stowell: The thing that was immediately clear once we started analyzing the data was the extent of practice variation across the system. We wrote an article on this in NEJM Catalyst that we subtitled “Endless Forms Most Beautiful,” which was a quote from Charles Darwin recognizing the variation that exists in the natural environment.

In many ways, the variation we see in health care mimics that. Because physicians, or clinicians more broadly, are trained in many different places, they pick up various practice patterns, various interpretations of evidence that are distinct from one another.

Until recently, we haven’t had the ability to visualize that difference. Once we started doing that, we could see there was tremendous variability in the total cost to deliver a particular episode, like a joint replacement. That total-cost variability was not correlated with quality.

We started asking ourselves: What are the practices that lie underneath cases that are low‑cost, high‑quality, and are those things that we could replicate?

Did you find that those practices were easily replicable?

Stowell: First we focused on identifying the most common practice variations with financial impact. Taking joint replacements as an example, we found cost per case was driven by a variety of practice choice: implant vendor and product line, use of fibrin sealants or branded pain medications, differences in length of stay or operative time, use of physical and occupational therapy. It was relatively straightforward to describe the differences, but we’ve only scratched the surface in effecting change.

Sometimes to effect change, we’ve needed to conduct more detailed supplementary analyses. We did this when noticing that the use of commercially impregnated antibiotic bone cement varied widely across our system, with meaningful financial impact. Connecting this variation with infection rates indicated no meaningful correlation between the two in our system. This helped us message the value-enhancing nature of the change, not simply the cost benefits.

To date, what we’ve been talking about is practice variation that is identifiable through our internal costing. It’s facility‑based practice variation for facility‑based costs. We’re now using the same approach to build a similar product suite for bundles so that you could understand the practice variation and the outcome variation in the bundle.

How did you go about implementing changes across a large system like Providence St. Joseph Health?

Fleming: We’re somewhat lucky that, several years ago, the organization had started to bring together groups of clinicians and administrative leaders from across the health system in like‑minded service line areas called clinical institutes, where we bring together folks who are focused on care for similar types of patients.

We had settings in place and teams in place that we could work with—not just from the health system pushing things down but from getting involved regionally and locally at the individual-hospital level to try and put this transparent information in front of the clinicians.

We wanted to give them an opportunity to look at their data as it compared to other caregivers and clinicians across the health system and ask questions and get, hopefully, actionable data that they could respond to and, if appropriate, make changes in their practice patterns.

What results have you seen from this initiative?

Fleming: We’ve seen changes in two key areas. One set of changes is within clinician behavior and their practice patterns. We have seen a number of changes, whether in the type of implant; the type of pharmaceutical agents that are used; the approach to pain control; the pathway that patients go through, which has impacts on length of stay; or even changes to practices by the care teams in the perioperative environment.

We also looked at [the initiative] as an opportunity for the health system to make changes in how we do certain things. It became very clear that the approach we had taken to engaging with the vendor community in the past wasn’t bringing optimal results.

By sharing this data with physicians and getting some of their feedback on the key pieces that mattered in those negotiations, as a health system we are now approaching our relationships with vendors in a different way. It’s about continuing to provide our physicians with the tools that they need to do their job but doing so in a manner that focuses on value and the outcomes that we’re able to provide to the patients.

For example, in the last year our health system engaged with total-joint surgeons and spine surgeons to find an optimal balance between having a broad set of choices and ensuring a sustainable price. In each case, the clinicians supported a narrower set of choices that they felt would still offer an optimal clinical outcome for their patients.

How easy would it likely be for the average health system to implement this kind of initiative?

Stowell: It certainly takes a fair amount of effort. We’ve talked throughout about the role of leadership commitment, both to the idea of branding ourselves on value and then putting the data resources in place behind it.

Any health system could say that that’s going to be their strategy. Getting the resources to do it well is always a challenge.

The thing that is more difficult to replicate is the many years, at least four or five years, of work that preceded this where, as Kevin mentioned, physicians and administrators have been working collaboratively on improvement—more focused on quality initially. That goodwill and process of identifying variations and spreading them across the system laid a solid foundation for doing similar work more focused on cost and value.

Fleming: At the end of the day, we found our clinicians to be universally engaged in providing the best care they can to their patients. If an organization engages its clinicians transparently with their data and a willingness to partner with them—not looking to mandate their performance or their practice choices—I do think that this roadmap can be beneficial for other organizations.


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