Variation still a moving target

Variation in hospital performance is alive and well, as shown by Truven Health Analytics' studies conducted exclusively for Modern Healthcare. Variation continues to be a problem, despite productive efforts of hundreds of organizations and hundreds of thousands of healthcare professionals dedicated to performance improvement.

The persistence of wide disparities in hospital performance is a red flag for all healthcare networks, whether led by a health system, an insurer, a physician group practice or a self-insured employer. With healthcare reform now underway, reliable outcomes and costs across the entire network are “musts” for success in managing the health of a given population.

Analysis of the alignment of hospital performance within health systems in Truven's 15 Top Health Systems study showed that narrowing systemwide variation is a much more difficult challenge than reducing variation within a single hospital. Our results demonstrate that even the highest-performing health systems show wide inter-hospital variation on individual measures in both achievement and improvement. Even wider variation was identified in a separate Truven Health analysis of self-insured employer and health plan networks. Employers and payers often select hospitals based on geographic location and price because quality information is often not available. The practice results in substantial variation in performance across the network. Currently, we are initiating work with a self-insured employer and providers to collaborate on finding methods to reduce avoidable costs and increasing quality while driving higher reliability.

A new wrinkle in proving value is the advent of health insurance exchanges. State governments, exemplified by Minnesota, are already educating citizens about selecting insurance through the exchanges. Consumers are learning that for the first time, they should have access to comparative price, quality and patient-satisfaction information when they choose a health plan. In the past, consumers have had to assume similar quality of care when they selected their health insurance for the year. As consumers become accustomed to using data to make their choices, the reliability of quality, cost, and satisfaction of the healthcare network is likely to become critically important.

The new paradigm of managing population health, coupled with point-of-sale performance information, will significantly increase incentives to reduce variation. Networks without high reliability of quality and cost will be at a major disadvantage in the future marketplace as consumers are able to make more intelligent choices. Under these circumstances, variation should drop significantly over the next few years. We look forward to measuring that progress.