Data Tracking Systems Help Hospitals Cut Costs, Improve Quality

July 1, 2014 in News

A handful of health systems across the country are using data tracking systems designed to streamline cost and improve the quality of care, Kaiser Health News/PBS NewsHour reports.

Background

According to KHN/PBS NewsHour, hospitals are facing significant pressure to reduce the cost of care, including:

  • A push by federal officials and policy experts to transition from fee-for-service payment systems to flat or bundled payments;
  • Insurer and employer demands for cost and quality data; and
  • Reductions in Medicare reimbursements.

Hospital Data Systems

To better meet those demands, several health systems have adopted data tracking systems, including:

  • Intermountain Healthcare in Utah;
  • MD Anderson in Houston; and
  • The University of Utah.

For example, the University of Utah’s health system, which consists of four hospitals and 1,300 physicians, developed a tool that tracks cost and care quality for all of its 26,000 patients. Among other things, the tool can pull a department’s full data — including every department physician and procedure — within minutes, allowing the system to easily calculate costs of:

  • Drugs;
  • Supplies;
  • Tests; and
  • Workers’ salaries, including physicians and nurses.

Health system officials said the tool improved their ability to negotiate prices with insurers since they have a more precise measure of how much each procedure costs.

In addition, the health system’s analysts use the tool to detect other cost cutting opportunities. For example, they were able to use the tool to identify and address a price variance of up to $19,000 for implants used in a joint replacement surgery performed by 10 different orthopedic surgeons.

University analysts also used the data to help create quality measures and develop a standard of “perfect care” to designate when care meets all quality standards. Since the new standard was adopted, the percentage of patients receiving “perfect care” has risen from 40% to more than 80%, while the cost of patient care has declined.

Overall, University of Utah’s health system has saved about $2.5 million from its $1 billion budget in its first year and has achieved significant savings in the past year, including:

  • $556,300 from reductions in patients’ length of stay after kidney and liver transplants;
  • $498,700 from creating standard protocols for prescribing costly immune-system boosting drugs; and
  • $452,000 from reducing lab test costs, particularly unnecessary lower-cost lab tests (Appleby, Kaiser Health News/PBS NewsHour, 6/30).
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