Trinity Mother Frances, which was acquired by Christus Health in March 2016, learned that the Texas Blues had expanded its PPO network for employees in the Tyler market, while pulling its PPO plan from the health insurance exchanges in Texas. The change meant the system would lose its exclusivity for specialty procedures, so the loss represented a sizable hit to the organization's margin.
Virtually overnight, care shifted to other providers, DeRoo said.
Rather than hiring consultants, system executives including DeRoo and Ali Birjandi, vice president of performance improvement of Christus Northeast Texas, formed different teams spanning information technology, surgery, cardiac care, clinics, purchased services, pharmacy and laboratory services—each of which had individual financial targets. They brainstormed ideas with all levels of staff to cut costs in areas including revenue cycle, labor productivity, supply chain, length of stay and purchased services. The teams, each of which involved physicians, met regularly and were led by appointed team leaders and steering committees.
Ideas ranged from more simplistic supply chain tweaks to the complex task of reducing clinical variation. They replaced specimen bags with less expensive bags supplied by a non-medical vendor, saving tens of thousands of dollars a year.
Trinity's clinic, which included some 630 doctors, renegotiated its contract with Johnson & Johnson for its arthritis and Crohn's disease drug Remicade to net $800,000 in savings. The lab department identified expensive tests that were routinely ordered but not always necessary. They went through all the lab order templates in the electronic health record and in one instance found about 6,000 unnecessary tests as part of the order set.
Without a true partnership with the physicians, big changes are near impossible, Birjandi said. "It's not just the cost of the material but the labor costs and the quality of it," he said. "Here we are sticking patients with needles unnecessarily. It went beyond expense reduction—we reshaped service and quality."
They used a database to benchmark costs, productivity and resource utilization against comparable providers, which was particularly enlightening for the doctors, DeRoo said. The data motivated teams to reduce utilization, improve efficiency and better manage costs.