Intermountain to track, publish every cost

In another demonstration of its data-driven approach to reducing costs, Intermountain Healthcare is building an ambitious new data system to track the cost of every procedure, piece of equipment and supply its 22 hospitals and 185 clinics use.

The idea is to have data available so physicians and patients can discuss costs and outcomes before making treatment decisions, according to a Wall Street Journal article.

Brent James, the Salt Lake City-based network's chief quality officer, explains that the organization has eight management engineers with stopwatches who go around and, for example, time how long it takes a technician to set up a lab test and the supplies used.

"In a cost-master system, you have empirical, fact-based costs," James explains. "We figure we have about 5,000 clinical terms and upward of 25,000 total items in our cost master. Once I get those costs, I can manage them the way I would if I were building an automobile or a washing machine."

Other industries have operated that way for years, he says, and Intermountain has to some extent, but the data wasn't integrated into clinical documentation through an electronic medical record.

"With a link to the EMR, maybe we'll be able to move health care out of the dark ages," he says.

The move away from fee-for-service reimbursement is forcing providers to more effectively manage their costs. Intermountain recently has pointed to its new $40 million supply chain center that's expected to save the organization about $200 million over the first five years through greater efficiency and improved logistics.

Intermountain's top management has pledged to make all of its costs public on its website, James says, though not every form of care will have a set price in advance. The cost of care after an automobile accident, for instance, can vary, he points out.

As part of its data focus, Intermountain has partnered with Deloitte to mine its more than 90 million patient EHRs for outcomes analysis with two programs--OutcomesMiner and PopulationMiner.

Lee Pierce, assistant vice president of business intelligence and analytics at Intermountain, told those attending the Big Data and Healthcare Analytics Forum in Washington, D.C., last summer that through its self-built "data warehouse" system, cost per patient for colon surgery was $12,000 for those enrolled in this process as opposed to $21,000 for those not enrolled.

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