Is it possible for better healthcare outcomes and lower healthcare costs to coexist?

When it comes to healthcare, University of Utah researchers seem to be proving that you can have your cake and eat it, too. The cake, in this case, is better patient outcomes in specific clinical areas, while the eating part has to do with trimming costs. 

Bucking national trends, a new study shows that a program being conducted within the university hospital system is making a difference in healthcare quality and cost. Developed by University of Utah Health Care (UUHC), the so-called value driven outcomes (VDO) program breaks down health procedure costs to the level of each bandage and minutes of nursing time, revealing variables that are otherwise hidden from view. When the program addressed inefficiencies in three common procedures, patients fared better and costs fell by up to 11 percent. The procedures studied were joint replacement, in-hospital laboratory testing and sepsis management.

The results were published online in the Journal of the American Medical Association (JAMA) in September.

“The transition of health care from volume to value is no longer theoretical or wishful thinking,” said a JAMA editorial that accompanied the article about the study. The editorial was written by healthcare leaders: Michael E. Porter, a Harvard Business School Ph.D. and strategist; and Dr. Thomas Lee, chief medical officer for Press Ganey Associates. “This article shows that achieving better quality and lower costs is possible and everyone can benefit: patients, hospitals and physicians and society,” the authors concluded.

In the program, a value-driven outcomes software tool integrated data on spending and health outcomes for the three clinical areas, analyzing the information to determine exactly what elements in a procedure — say, even a bandage — cost how much. It also broke down costs and outcomes by physicians, who were given access to this information.

The study measured quality and patient outcomes relative to cost from 2012 to 2015. After baselines in outcome measures were established for each of those areas, care processes were redesigned and quality improvement projects launched. Variations in costs and outcomes served as opportunities for improvement.

When the researchers re-evaluated those clinical areas, they found direct costs had been reduced and outcomes generally improved. But, the study also warned, “causality cannot be established” because the clinical improvement studies’ designs generally lacked concurrent control groups and statistical adjustment for potential variation factors.

A case in point: knee and hip replacements, which — along with the likes of extensive burns, Cesarean deliveries and drug and alcohol abuse — was placed on a list of 19 procedures with the highest total direct costs. Although taking out a damaged knee and replacing it with an implant may sound like an assembly-line procedure, analyses with VDO revealed that costs varied considerably between what should have been nearly identical surgeries.

“We were able to get a macro-level view of where the opportunities for improvement were,” said senior author Dr. Robert Pendleton, chief medical quality officer at UUHC. “Then, we could drill down even further to see what we needed to change.”

Combing through millions of fields of data, VDO analyses determined that a stand-out culprit behind variations in cost for joint replacement surgeries was the length of hospital stays. It took longer for some patients to be discharged than others. For the multidisciplinary team of doctors, nurses and operations engineers who were charged with problem solving, the newly exposed issue was a worry for two reasons. It became clear that patients weren’t consistently getting out of bed and moving within a day after surgery, a measure that is important for optimal recovery. And when patients stayed in the hospital longer, facility utilization costs crept upward.

To ensure that every patient had early mobility, the team reconfigured physical therapists’ schedules so that one would be available no matter what time of day a patient’s surgery took place. Within two years after implementing the changes, the mean length of hospital stays dropped from 3.5 days down to 2.9. During that time, total costs for joint replacements fell by about 10 percent, with 30 percent of that savings coming from shorter times in the hospital.

Another large proportion of the total cost reduction, 40 percent, came from standardizing supplies, an additional major source of variability in the procedure’s costs. Administrators renegotiated supply contracts and made sure that surgeons used implants and other supplies that were under discount. More importantly than cost savings, patient outcomes improved. Within one and a half years, a composite score reflecting the quality of care rose from 54 percent to 80 percent. According to a number of nationally and locally defined quality measures, patients were having fewer complications such as hospital-acquired infections, unplanned readmissions, and emergency department visits.
“Many people worry that when you talk about lowering costs, you are talking about inadequate care,” said Lee. “Here we see that quality is moving up, and as it moves up, costs go down.”

Implementing the VDO program on two additional common procedures had similar impacts. In the case of in-hospital lab testing for acutely ill patients, the program revealed that some healthcare providers were ordering unnecessary tests. An education campaign drove down superfluous testing, decreasing mean costs from $138 to $123, or 10 percent per day, saving the hospital $250,000 per year. The risk of being readmitted to the hospital within 30 days also dropped slightly, from 14 percent to 11percent.

In a pilot project for management of sepsis, a condition in which the body’s response to infection causes harm to organs and one of the top three patient killers in hospitals, streamlining procedures and raising awareness of warning signs shortened the mean time to administer potentially life-saving antibiotics from 7.8 to 3.6 hours.

“We have great data, but this is just the beginning,” said Pendleton. The program is expanding to optimize other procedures, the university said, and new versions of VDO are factoring in additional measurements such as patient reported outcomes that take into account the patient’s own point of view of how well they think are doing. “I feel like by the time I retire I’m going to think, ‘Oh my gosh, how could we have not even been thinking about value and quality back then?’ It’s hard to imagine,” said Lee.

Other elements were critical to the success of the value-driven outcomes program, said Pendleton. One was that the program treats physicians as partners in the drive to reduce costs. 

“As long as they’re assured that they have a similar and equal opportunity to improve quality, our experience is that they’ll be drawn in and will want to drive improvement,” Pendleton said. He had his own laboratory utilization rates compared with those of his peers under the program. “You really need to be able to put the data in the context of a culture that embraces that peer-to-peer transparency. If you can create that culture ... you can really unlock some of that motivation, passion and innovative spirit of doctors.”

The study acknowledged numerous limitations of the value-driven outcomes approach. The data and tool were limited to University of Utah Health Care and did not take into account pharmacy, laboratory and imaging services from third-party providers, for instance. Publicly reporting outcomes and costs could also motivate clinicians to avoid caring for riskier and more-costly patients, it warned. 

“There is also a need to further demonstrate the generalizability and scalability of the value-driven outcomes approach across many more conditions and units, both at the University of Utah and at other healthcare systems,” the study added.

In an era where physicians frequently suffer metric fatigue — a condition defined by excessive oversight and measurement — asking them to participate in yet another program rife with measurement can be another challenge, the study noted.
“The reality is that providers in today’s healthcare are being asked to take on an unprecedented amount of complexity,” Pendleton said. By giving physicians cost information, the value-driven outcomes program sought to tap into physicians’ inherent altruism and motivation to do right by their patients, but the response has been varied, with some groups more enthusiastic than others, he added. 
“We are still working to that end,” Pendleton said. “But it’s hard. This work is not easy and not fast.”