Providence St. Joseph Health leveraged data to reduce its knee replacement costs by more than $1 million a year.
Lack of robust data analysis impedes care improvement efforts
The Renton, Wash.-based integrated health system first analyzed what drove variation across its 51-hospital network and targeted the use of antibiotic-infused bone cement. Hypothetically, it can stave off infections.
But the pre-mixed product added significant cost without substantial evidence that it was effective. Looking at a two-year data set of about 20,000 knee replacements performed at Providence St. Joseph, there wasn't a distinct difference in the quality data for patients who received cement infused with antibiotics and cement without it.
That required combining two disparate data sets in cost and quality metrics and delivering it in a way that resonated with physicians. A seasoned team of data experts had to filter knee replacement costs through patient cohorts rather than by department or facility. It had to expand beyond the traditional treatment codes to account for patient acuity.
Most physicians ended up either not using the pre-mixed product and mixed it themselves or used non-antibiotic cement, reducing Providence's cost per knee replacement from $265 to $154, said Dr. Caleb Stowell, enterprise director of value-based care at Providence St. Joseph Health.
"There is a reason why other systems haven't done this—it is really hard, particularly to do this in a way that is translatable across hospitals," he said. "It is also critical that the information is a presented in a way that taps into the psyche of a physician. The way we built the tool was through transparency that exposed the practice pattern of one physician relative to another."
There is widespread recognition that data is the key to influence physician behavior and weed out low-value operations.
Even though 91% of 276 surgical and medical specialists believe that increasing physician access to cost data would improve care, only 40% said that their health systems are making the effort, according to new research from Lumere, which provides data-driven analysis of device and drug metrics to guide clinical operations, published in the Physician Leadership Journal.
Presenting robust data tailored to physicians is of utmost importance, but the topics of cost and finance are typically overlooked in medical training, said Dr. John Cherf, a co-author of the study, chief medical officer for Lumere and former chief of orthopedics for Advocate Illinois Masonic Medical Center.
"What the healthcare system needs overall is much more transparency in cost," he said. "I have been a practicing orthopedic for over 20 years and I still don't have my arms around the cost of a lot of things I do because there is complete opacity."
Whether it's for competitive reasons or a lack of institutional resources and infrastructure, data is often the biggest impediment for changing clinical methods.
"A number of health systems have tried and failed in part because there is not resilience built into systems to keep trying if they didn't find success in the first go-around," said Dr. Scott Falk, a co-author of the study and director of performance improvement, associate professor of anesthesiology and critical care at University of Pennsylvania and a physician advisor at Lumere.
The study found that committees that discuss cost and quality of device and technology products with physicians are "extremely" or "very" influential to their clinical decision-making, according to 62% of respondents.
"One of the best models I have seen around decreasing supply costs and engaging physicians are physician-preference item committees that explore efficacy and cost data," said Dr. Daniel DeBehnke, a managing director at Navigant and former CEO of the Omaha-based Nebraska Medicine system. "Whether a physician is employed or not, the most important thing is data sharing so they can make informed decisions."
Contrary to the prevailing beliefs of many health system administrators, employed physicians are not necessarily more cost-conscious than independent physicians, according to the study.
This finding contradicts the rationale that has driven many physician and physician group acquisitions. Less than half of practicing physicians in the U.S. owned their medical practice in 2016, marking the first time that the majority of physicians are not practice owners, according to a 2017 study from the American Medical Association. Only 41.7% of physicians had an ownership stake in their practice in 2016, down from 53.2% in 2012.
Healthcare executives expected that direct ownership would allow them to better control their purchases and referral network. To be fair, some acquisitions happened organically as physician practice owners were looking to lower the workload as they neared retirement or recognized that they couldn't keep up with the additional cost to run a practice in today's operating environment. Thus, physician consolidation is inevitable, Cherf said.
When surgical specialists were asked what influences their device selection, employed physicians were equally likely to report that device cost would be "very" or "extremely" influential compared to independent physicians. This suggests that employing physicians will not help reduce costs, according to the study.
"Employment alone doesn't guarantee alignment or cost-sensitivity," Cherf said. "The model of employing primary-care doctors to get downstream revenue makes sense. But having said that, I am not sure that the employment model is going to solve our cost problems."
This was one of the survey's most surprising findings, given that the overriding thought process was that if someone is employed they will be aligned and work with the system to adjust cost structures, Falk said.
"If people come away from nothing else from survey, the fact that the employment of physicians doesn't necessarily lead to alignment is something most can benefit from," he said.
Cost management is the primary focus among healthcare executives as they cope with waning reimbursement levels, dwindling inpatient admissions and higher technology, labor and compliance expenses, according to a recent survey from Advisory Board.
One of the solutions, albeit often an ambitious one, is reducing clinical variation. Eighty-six percent reported that increasing physician access to clinical practice variation data would positively impact care quality.
But only 57% of respondents said their hospitals or health systems are reducing variation in practice patterns, 53% said their organizations are reducing variation in drug selection, and 52% said their organizations are reducing variation in devices.
This is compared to 82% of institutions that are implementing clinical practice guidelines, 75% that are improving care coordination and sharing of information among providers, and 64% that are increasing access to quality data.
"Most hospitals have cost-variance reduction efforts in the supply chain or pharmacy, where they have good data," Stowell said. "But they struggle on the clinical end with proper cohorts or outcome-based data that is comparable."
Increasing physician engagement can begin with assessing how data is systematically shared with physicians, researchers recommended. Leaders should develop a strategy that guides the appropriate amount and type of data to share.
Quality, outcome and cost data should be benchmarked on evidence-based guidelines and regularly shared with physicians on a consistent and usable format. The data should account for patient acuity and be broken down by unit price for specific patient cohorts.
Ideally, transparency creates a self-propelled, value-based culture. When Providence St. Joseph Health started arming physicians with cost and quality data, some took it upon themselves to further the cause, Stowell said.
"We had one doctor who now looks at every screw for each spinal surgery, which is something we didn't think they would spend time on," he said. "Surgeons have the motivation to be the best, and to deeply engage them with data is how they can get to be the top of the class."
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