Why Reducing Unwarranted Clinical Variation is Crucial to the “New Normal” of Care Delivery in Healthcare
As healthcare organizations look to the future for their community and the patients they serve, a path forward that includes reducing cost and improving quality and outcomes will become even more important. Why tackle clinical variation?
Cost Reduction and Margin Improvement
According to a recent JAMA review, the cost of waste in the U.S. healthcare system ranges from $760 billion to $935 billion annually. Furthermore, according to a new report from the American Hospital Association, hospitals will lose $323.1 billion this year because of the COVID-19 pandemic. And, that number continues to rise.
While historical methods to reduce cost can be effective, fully capturing all opportunity and value that exists can only be achieved through a clinically driven method of identifying variation opportunities. With Empiric’s support, healthcare organizations can expect an average $175 to $325 cost per case reduction and 10X that when looking at the full surgical Episode of Care.
The impact of the coronavirus pandemic on physicians and particularly surgeons has been profound. In most cases, the cancellation of elective surgeries has impacted physician compensation and productivity and COVID-19 precautions have resulted in workforce and staffing issues, prioritization of elective procedures, risk of viral transmission intraoperatively, and changes to perioperative practice. As healthcare organizations and physicians begin to look forward to the “new normal” of care delivery, physician engagement in clinical performance improvement and cost containment has never been more important.
Empiric’s methods build momentum for change through purposeful physician engagement. This includes building credibility through foundational data accuracy improvements and building the stage for change through cost transparency and peer-to-peer clinically meaningful comparisons.
The strength of healthcare organizations going forward will not just be measured by financial stability but also the extent of a collaborative and engaged relationship with physicians.
 Bannow, Tara. Modern Healthcare; Waste accounts for one-quarter of healthcare spending. https://www.modernhealthcare.com/healthcare-economics/waste-accounts-one-quarter-healthcare-spending. Published October 7, 2019.
 Haefner, Morgan. Becker’s Hospital Review; COVID-19 to cost hospitals $323 billion, American Hospital Association says. https://www.beckershospitalreview.com/finance/covid-19-to-cost-hospitals-323-billion-american-hospital-association-says.html. Published June 30, 2020.