Health Affairs: Raising quality cuts costs
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“Quality improvement is the science of process management,” wrote Brent C. James, MD, MStat, and Lucy A. Savitz, PhD, in the June issue of Health Affairs. Both James and Savitz are part of Intermountain Healthcare’s Institute for Health Care Delivery Research in Salt Lake City.
In the late 1980s, Intermountain Healthcare, today a network of 23 hospitals and 160 clinics in Utah and Idaho, launched its first quality improvement initiative. Led by a statement made by the “father of quality improvement,” W. Edwards Deming, who claimed that the best way to cut costs is to improve quality, Intermountain began by measuring variations in performance and outcomes.
To its surprise, the quality improvement team discovered that the care that patients with identical conditions received varied dramatically between physicians, with some treatments being used nearly six times more often than others. The costs of treatment likewise varied for identical indications and outcomes, showing a twofold variation.
These findings, and the physician-led clinical changes that followed, set in motion Intermountain Healthcare’s now meticulous quality improvement program. The initiative consisted of four main components: identifying key processes; creating information systems to manage clinical and financial tasks; revising the organization’s structure based on the measured data to encourage accountability and change; and aligning financial incentives with quality outcomes for patients.
According to James and Savitz, performance improvement is made significantly more tractable once a provider identifies the “golden few,” the select number of processes that account for the majority of care the organization delivers. For example, Intermountain has found that its 104 key processes make up 95 percent of all of Intermountain’s care delivery, while 60 of these account for 80 percent of the provider’s services. “Not all processes are equal in size and effect,” James and Savitz pointed out, and targeting the important ones can have huge impacts without daunting workloads.
Intermountain’s process improvements have delved into most every specialty and indication, from hip replacements, respiratory problems and heart disease to pregnancy, diabetes and depression. “[A] health system organized around key clinical processes finds its business model driven toward population-level health. This means shifting the focus to modifying the factors that cause disease, with the goal of avoiding future costs for care, instead of responding to health problems only after they appear,” James and Savitz noted.
Intermountain’s process improvement strategies, aligned along the data-driven rigor of ‘clinical management,’ have resulted in far-reaching benefits to patient outcomes and costs. As early as 1995, for example, Intermountain had documented savings of $30 million resulting from 65 process improvement interventions.
By 2001, Intermountain’s implementation of appropriateness criteria for labor had reduced elective inductions from 28 percent to 2 percent of all inductions. The intervention cut time spent in labor and unplanned surgical deliveries, generating savings of $50 million and allowing the healthcare system to deliver an additional 1,200 babies per year.
“The Intermountain experience might not be generalizable to all care delivery organizations. But to the extent that it is, we conclude that any organization basing its clinical measurements on inadequate internal administrative data and external regulatory requirements—rather than on intermediate and final clinical, cost and service outcomes built around specific clinical care processes—will fail in its attempts to manage care delivery,” James and Savitz argued.
The authors cautioned that one way to fail to improve outcomes—and James and Savitz acknowledged Intermountain’s own large-scale failed initiatives—is to capture data as “measurement for selection,” the reporting mandated by external regulatory agencies. According to the authors, this process can create competition for limited resources and thereby “actively harm efforts to improve quality and reduce costs.”
Instead, improved care requires the reorganization of how care is delivered. Solid process and outcome data should be required from all physicians, along with ample opportunities for feedback, but without top-down management.
James and Savitz called the policy reforms of the Patient Protection and Affordable Care Act of 2010 “crucial.” They continued, “A central challenge for policymakers now is to align financial incentives and drive the transition to organized care systems that can provide ‘the best clinical result at the lowest necessary cost.’”