Under outcomes-based medicine, healthcare providers are under growing pressure to demonstrate to the purchasers of care — patients, payers and employers — that they can deliver high-quality clinical services at an affordable and competitive price. To accomplish this, some organizations are targeting "wasteful spending" in their clinical service lines, or spending not associated with improved quality or patient outcomes.
Unnecessary testing, over-testing, duplicative services and other low-value care represent a substantial opportunity for healthcare providers to reduce costs and improve patient health across their enterprise. Combining and analyzing clinical, financial and operational data can help organizations pinpoint opportunities to reduce or eliminate low-value care. However, implementing a robust analytics program can be cost-prohibitive and impractical for organizations facing capital constraints or interoperability issues, limiting the amount of data they can access.
This content is sponsored by HealthTrust.
To overcome these barriers, hospitals are seeing value in partnering with group purchasing organizations to leverage their extensive data and reduce avoidable utilization of healthcare services, products and advanced technologies.
The cost of avoidable utilization
Unnecessary medical services fuels a large portion of wasteful healthcare spending. In 2012, the Institute of Medicine released a report stating 30 percent of total healthcare spending in the U.S. — or $750 billion — is wasted on unnecessary healthcare services.
Avoidable utilization carries repercussions for patients' wellbeing. When a physician orders excessive testing or treatments that offer little proven benefit, the cost of care increases while patient health remains unchanged, or in worst case scenarios, is actually harmed. Studies have found low-value care is prevalent in the U.S. healthcare system. A 2014 study of Medicare claims data revealed between 25 percent and 42 percent of Medicare patients received at least one of 26 test or treatments that scientific and professional organizations have consistently determined to have no benefit to patient health.
With such drastic effects on both finances and patient care, reducing unneeded healthcare services is a top priority for many healthcare leaders. The Advisory Board's most recent Annual Health Care CEO Survey, which investigated the top concerns of 183 C-suite executives across the nation, found 49 percent of executives are worried about controlling avoidable utilization — a 5 percent increase from the year prior. CEOs ranked the issue their fifth-highest concern out of 26 topics in 2017.
Hospital CEOs are not the only ones concerned about the overuse of medical services. The American College of Physicians cites high rates of unneeded care, as well as the use of unnecessary technology, as major drivers of healthcare spending. In fact, the organization's top recommendation for achieving cost savings is to "reduce avoidable, ineffective and duplicate use of services — including technology that does not improve patient care — and encourage clinically effective care based on comparative effectiveness research and implementation of information technology," according to an ACP whitepaper on controlling healthcare costs.
Hospitals can use cost, outcomes and reimbursement data to support outside clinical evidence and drive insights that help inform clinical decision making, reduce unnecessary patient care and enhance clinical value. Clinical analysis allows clinicians to better understand the benefits and outcomes of various procedures and services for specific patient populations. Once these outcomes are understood, clinicians can tailor treatment plans to ensure the best care possible, delivered in the most efficient manner.
Defining the data challenge
To create a clear picture of value, hospital systems must be able to quickly and efficiently combine the data they collect and manage on a daily basis — clinical, financial and operational — and use it to understand processes and drive insight. This allows clinicians to see which products they're using for what procedures and patients, along with associated outcomes, so they can compare the total costs of care to its effectiveness.
Once health systems identify inefficient or ineffective patient care methods, they can implement appropriate use criteria or initiate a usage monitoring process to ensure the patients who will benefit most from the product or treatment are the ones receiving it.
To determine the cost effectiveness of their clinical care, hospitals must have analytics technology, data scientists and governance processes in place to extract meaning from the data, according to Michael Schlosser, MD, CMO of HealthTrust, a Nashville, Tenn.-based group purchasing organization serving more than 1,600 hospitals and more than 26,000 ancillary sites. Specifically, they need access to information on product cost, technology costs, use rates and clinical outcomes of specific products and services.
Since GPOs have access to a much larger amount of data than an individual hospital does, these organizations are a helpful resource for information to drive change. GPOs also have the tools and expertise necessary to extract meaning from the clinical evidence and data by evaluating its potential value, biases or flaws. While this type of data analysis is still very much a manual process, leading GPOs seek to automate and centralize the process to vet evidence, look at new technology and share the information with member hospitals on a regular basis.
On the other hand, healthcare organizations that try to gain information about cost effectiveness from other sources, such as product vendors and government agencies, face three key challenges, according to Dr. Schlosser.
1. Vendors aren't required to analyze cost effectiveness
"Peer-reviewed studies and professional or regulatory guidelines often lack the types of data healthcare organizations are looking for, which is the cost-effectiveness data that ties economic and clinical impact together," he says.
The technology and products introduced in healthcare settings are largely driven by vendors who encourage surgeons to constantly push the envelope by using the latest and greatest devices, says Dr. Schlosser. Since the Food and Drug Administration does not require companies to complete cost-effectiveness studies prior to product approval, vendors place little focus on this information.
"It's up to physicians to hold vendors responsible for demonstrating how the new technology affects the overall value of the care they deliver," Dr. Schlosser said.
2. Scientific data is not real-world data
The FDA offers several different pathways for products to earn approval, and each requires different levels of science, says Lynn Tarkington, RN, assistant vice president of physician and clinical services at HealthTrust. While the agency is constantly trying to innovate the way it evaluates and approves new technologies, products don't always follow the best regulatory pathways to produce valuable data for hospitals.
"Sometimes clinical trials can be so scientific, they are not translatable to day-to-day practice," says Ms. Tarkington. "It's not always the right data to inform proper utilization where cost and reimbursement balances out for any given technology."
The FDA requires companies to conduct randomized clinical trials, where most of the variables are controlled by researchers. However, when the product is used in a real-world setting, none of the variables are controlled, and clinicians use the technology to treat various patients with different conditions. So while it's necessary to study products in a controlled fashion by a clinical trial, it's also important to ensure quick follow-up on data that reflects real-world practice and application, according to Marcus Dortch, PharmD, HealthTrust's senior director of clinical pharmacy services.
3. Data can be overwhelming
Healthcare organizations must sift through mountains of data — from both clinical studies and their own cost, reimbursement, supply chain and patient outcomes data. The data can present itself in many different fashions and forms, and there is not always a clear link from one data set to another, says Mr. Dortch.
With such high volume and variation in the data, it's often difficult to differentiate between what information serves as helpful evidence for a healthcare organization and what information is just disguised as clever marketing.
"Some people can't distinguish the difference between the two," he says. "And then there are people who abuse and mislead the people who confuse the two."
Since data analysis can prompt as many questions as answers, hospitals must ensure they have the right talent to transform data into usable information for clinicians, whether they rely on an in-house data scientist or an external partner, says Ms. Tarkington.
Harnessing the power of data
GPOs can help healthcare organizations study, understand and provide high-value care by helping them measure utilization and cost data against clinical outcomes.
1. Finding the right talent.
It's sometimes difficult for hospitals to find someone with the right skills and mindset to take multiple data sets and transform them into usable information for the hospital, says Ms. Tarkington. If hospitals don't want to hire one or more full time equivalents to internally analyze the data, they can also use third party information sources that independently review the evidence and share their findings with the hospitals. Some healthcare organizations are building on their traditional relationship with GPOs by partnering with them to study clinical and financial data together to determine care value.
"Since GPOs are making decisions on physician preference items and the contracting strategies for these products, it only makes sense the end users have a central role in how those decisions are made," says Dr. Schlosser. HealthTrust's Physician Advisors Program allows GPOs and physicians from member hospitals to partner to examine product data, financial data and clinical data together. Physicians can provide clinical feedback on contracted products and also help develop new ways to combine data sets, study the products and understand patient outcomes.
"This is a process they should have been involved in since the beginning," says Dr. Schlosser.
2. Looking for outliers and trends.
GPOs also offer large scale registries — big selections of real-world data — which serve as another valuable tool for informing better utilization.
"Aggregating hundreds of hospitals and looking at their purchase data and clinical outcomes data can provide unique insight into which products are adding value and which are not," says Dr. Schlosser. "It's not just because of the size of the data, but because of the real-world setting those products can be used in."
Large data sets can also help identify usage trends, pinpoint outliers and show whether the actual patient outcomes matched the provider's expectations.
Conclusion
"Data is an asset to a healthcare organization, and you have to treat it like such," says Dr. Schlosser. Data analysis is crucial for hospitals to know not just the individual price of a service or item, but to understand how much it costs and how effective it is for patients. Healthcare leaders cannot have beneficial conversations with their clinicians or improve patient outcomes if they don't understand their costs, especially in the age of bundled payments. Ultimately, the hospitals that see data as an asset, rather than an overwhelming burden, will be most successful in reducing costs and achieving clinically effective and efficient care.