Example from the field: Managing clinical costs at a large, academic health system

The gastro-intestinal (GI) service at a large, academic health system had high clinical costs relative to regional benchmarks. A service review highlighted a large number of cost and operational challenges, including the following:

• Continuing pressure from health plans to demonstrate that care was being provided in the lowest-cost setting
• Over-utilization of existing, high-cost operating room space
• Mounting backlog of patients because of insufficient clinical and procedural access
• Minimal visibility into procedural suite throughput
• Volume and throughput limitations resulting from constrained anesthesia availability

While the primary objective to improve the GI service pointed to addressing clinical costs through optimal use of space, finding the most appropriate setting and the best deployment of clinical resources, a more comprehensive solution was needed.

The organization recognized that it would be impossible to make a material impact on clinical costs without also addressing operational expenses, provider management, revenue cycle optimization and growth. Leadership quickly realized that a coordinated, collaborative effort that incorporates functional areas and stakeholders from across the organization would be required to identify opportunities and workable solutions. The following four examples demonstrate this need.

Information systems are key to promoting greater visibility into capacity utilization to inform the right levels of staffing and scheduling availability for each site of care to reduce operating expenses and support volume growth.

The physician enterprise should create better access for referrals to providers both in clinic and for procedures, to improve the patient experience and mitigate against competitors.

Physicians also should establish and adopt tighter clinical standards and guidelines for the appropriate site of care to ensure that patients receive care in the lowest-cost setting, without compromising quality or safety based on the patient’s co-morbidities or health status.

The right documentation and billing processes and infrastructure are critical to ensuring timely and necessary prior authorization to drive optimal revenue cycle performance.

Vital to success has been a comprehensive, integrated approach to identifying and addressing the many different components — across different departments and functional areas — that ultimately impact clinical costs.

View related article: 5 tactics to reduce clinical costs and improve performance