LAS VEGAS--The University of Utah Health Care system has been able to accomplish the rare feat of reducing the facility’s expenses per discharge by closely reviewing the costs and improving patient outreach.
Vivian Lee, M.D., the system’s CEO and dean of the University of Utah School of Medicine, told attendees at the Healthcare Financial Management Association’s Annual National Institute that the costing portion of the equation was easier said than done. When she joined the system in 2011, costing was at the macro level, but not broken out by unit of care delivery or by supplies. Lee moved to change that.
“You can’t get costs under control if you don’t know them,” Lee said. Fairly quickly, costs were broken down for care by laboratory, supplies, imaging costs, operating room utilization and other areas. University of Utah Health Care uses an elaborate data analytics system to perform such cost estimates.
That allowed granular costing, such as determining how much it costs to perform an appendectomy, and for the system to determine how much care cost when delivered by each physician. For example, Lee discussed how much the system’s 10 orthopedic surgeons each cost to perform lower extremity joint replacement procedures. The two outlier surgeons’ higher costs could be connected to the fact that one focused on ankle procedures, while another focused on treating patients whose bones were damaged by cancer.
Lee said that the system was able to keep the annual growth rate at negative 0.5 percent per year between 2006 and 2013--by comparison, the growth rate for the University HealthSystem Consortium has been 2.9 percent a year during the same period.
The growth curve has been fairly remarkable, considering the upward cost pressures on hospitals systems as of late, particularly the rise in pharmaceutical prices. And it also appears to be ahead of the curve, given many experts have warned hospitals in recent months that they must place a greater focus on cost reduction.
That Lee’s system has an eye on expenses does not mean that it can rest on its laurels, as individual elements can shift dramatically, she said. “The only constant is the variability,” Lee said.
- visit the University of Utah Health Care’s innovations website