Clinical Redesign and Reducing Variation – Responding to the Shift to Value

This post completes our series by Novia Strategies’ Vice President John Malone. The series focuses on the topic of how the shift to value is changing health care delivery, and how clinical redesign and reducing clinical variation are central to increasing value. You can find links to the other articles in the series at the bottom of this article.

The previous two posts in this series provided background on the shift to value, and discussed the various ways in which the shift to value impacts hospitals and health systems, as well as their physicians. This post picks up the discussion and describes why clinical redesign to reduce clinical variation is the most effective leadership response to strategically guide hospitals and systems into the value-based environment.

It is important to keep in mind that the shift to value is fundamentally about improving quality, reducing costs and ideally doing both simultaneously. Traditional operations improvement and cost reduction programs tend to focus almost exclusively on financial savings. Redesigning care and eliminating clinical variation, on the other hand, ensures patients receive the safest, highest-quality care, while simultaneously addressing resource consumption and patient throughput issues which are integral to reducing the overall cost of healthcare delivery.

Many hospitals have made significant strides with their traditional performance improvement efforts. Clinical redesign, including clinical variation reduction, is now being viewed as the new frontier of performance improvement to respond to the shift to value. A CEO panelist on our recent Webinar on Clinical Variation, jointly sponsored with Becker’s, said it wasn’t so much an “aha moment”, but a realization over time that the shift from fee-for-service volume to value-based reimbursement models necessitated a transformation in the way providers approach care. “When you have commercial insurers and federal payers moving away from fee-for-service, something needs to change in the way you deliver care and manage patients’ health.”

And this CEO’s perspective is widely shared. The Advisory Board recently surveyed more than 350 members — including 183 C-suite executives—from provider organizations to see what they’re focused on right now. One of the top three findings is that traditional cost management tactics are no longer adequate. “Many providers are shifting their focus to internal processes and pathways to manage total spend by reducing unnecessary utilization and clinical variation.”

Successful clinical redesign efforts establish a foundation for interdisciplinary and integrated care delivery that incorporates best demonstrated practices, reduces clinical variation and standardizes key care processes. Clinical redesign generates several positive outcomes. Risk adjusted data and collaborative change management processes lead to greater engagement among physicians and clinical staff who work together to determine the appropriate care for patients. The outcomes of this work are improved quality and safety for patients, reduced LOS, ensuring that the right tests, procedures and supplies are used, and building in right venues of care. These outcomes result in improved patient care, freed up capacity, improved financial stability for hospitals and increased patient satisfaction. As the industry shifts from volume to value, each of these benefits will be fundamental to thriving in the new healthcare era.

5 Keys to Successful Clinical Redesign

Novia Strategies has extensive experience working with health care providers to redesign clinical processes and reduce variation. The following 5 Keys to Success is a summary of our earlier article on ten key strategies, lessons learned and best practices to implement successful clinical redesign initiatives. You can read the full article here.

1. Engage the Medical Staff
Medical staff and executive leadership must formally and informally engage the medical staff to communicate their expectations, goals, measures and accountability for the results of the clinical redesign effort. Hospital leadership must put in place processes that ensure physician-directed communications, listening and real involvement in identifying, measuring and reducing variation. This includes participation in interdisciplinary rapid design teams for high volume DRGs or service lines to review data and understand current practice variation by physician.

2. Ensure Accurate Data and Utilize Scorecards
Risk-adjusted, physician-specific clinical variation analytics form the foundation for engaging physicians to reduce clinical variation. Risk adjusted analytics allow the design teams to understand the severity of illness of each practitioner’s patient population, thus removing the concern that one physician’s patients are more complex than others. Risk-adjusted analytics reduce physician resistance and further physician buy-in to study and reduce variation. Both blinded and unblinded physician scorecards that measure improvement in targeted metrics are important to demonstrate progress. We recommend providing refreshed data on a monthly or quarterly basis (depending on the metric) so that improvement teams can evaluate the impact of initiatives and continue to adjust improvements in a timely fashion.

3. Create a Culture of Interdisciplinary Collaboration
To create a culture of interdisciplinary collaboration with an eye toward innovation, best-practice and early adoption, organizations must build interdisciplinary teams that encourage cross-functional discovery of opportunities to improve patient care outcomes. Regulatory bodies, such as Centers for Medicare and Medicaid Services (CMS), the Agency for Healthcare Research and Quality (AHRQ), and the Health Resources and Services Administration (HRSA) are holding organizations and clinicians responsible for interdisciplinary collaboration with a goal of patient safety and clinical outcomes.

4. Embedding the Change with Protocols, Order Sets and Pathways
An effective strategy to manage variation in practice includes the development and adoption of evidence-based protocols, related order sets and/or pathways. Reviewing excess days per discharge, average cost per DRG, and strategic quality metrics by DRG and specialty will help with targeting where to focus the efforts. Successful organizations engage key physician and nursing stakeholders, as well as representatives from pharmacy, therapy, and other experts as needed in the development of these protocols.

5. Focus on Utilization of Resources
Reducing clinical variation can have a significant positive impact on resource utilization resulting in lower costs in areas with high order volumes such as pharmacy, laboratory, diagnostic imaging and supply. Working with providers to agree on those professional resources that are necessary to deliver care can reduce the variety of resources required for specific cases. The analysis and understanding of utilization of these resources should be incorporated into the rapid design phase of the clinical redesign effort. It’s important to consider that clinical variation is not only caused by what products/services are being used, but also how much of each product/service is being used in each clinical situation.

Redesigning care and reducing clinical variation can result in several quantifiable improvements, including increased capacity, reduced LOS, excess days and utilization of tests, procedures and supplies; reduced overall costs of patient care by DRG, physician and service line; reduced cost of care for core processes such as admission and discharge processes, mobility and pain management. Also common are improvements in key quality metrics such as readmission rates. Hospitals also experience increased revenue from better clinical documentation, reduced denial rates, improved accuracy of patient status as well as increased patient satisfaction.

For more information on Clinical Redesign to reduce clinical variation please contact John Malone at 630-267-2608 or Nancy Lakier at 858 486-6030.

Here are the links to the other articles in this series:
Clinical Redesign: Key To Shifting From Volume To Value
Impact Of Value-Based Programs On Acute Care Hospital

By John Malone, Vice President, Novia Strategies

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