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How Wasteful is Your Care Delivery?

Elyas Bakhtiari, for HealthLeaders Media, January 21, 2010

When presented with pay-for-performance metrics, clinical benchmarks, and other statistics about the care they provide, physicians typically react one of two ways.

Some bristle at the notion of being measured and quantified to such extremes. It feels bureaucratic and impersonal. It overlooks the compassion, energy, and knowledge that they pour into each patient encounter and represents the care they provide as a cheap set of numbers. These doctors see it as a hinderance, rather than a way to improve healthcare.

Other doctors, however, jump at the chance to find out how they measure up to their peers. The competitive instincts that got them into and out of medical school and residencies kick in, and they try to improve areas where they may be lagging behind the norms. They reach out to the top performers to learn from their successes.

Dean Health System in central Wisconsin hopes its physicians have the second reaction as it attempts to cut clinical wastes by benchmarking "any clinical indicator for which an evidence-based guideline or external comparison [is] available," says Craig E. Samitt, MD, MBA, Dean's president and CEO.

I spoke to Sammitt for this month's HealthLeaders magazine cover story about five remaining growth areas for the healthcare industry. Dean has already nearly exhausted the opportunities for cost savings in Lean-like administrative improvements, so now the organization is looking where many hospitals and practices will be looking to reduce costs in the future: clinical processes.

Whether healthcare reform passes or not, the long debate about how to curb escalating healthcare costs has shed light on just how important physician decisions—and the clinical process from start to finish—are to overall cost control. While reformers are trying to figure out how to bend the cost curve from the top down, Samitt says Dean is bending it at a local level by simply providing physicians with data and letting them adjust on their own.

Dean saved about $9 million in 2009 by benchmarking "admission rates for specific conditions, frequency of surgical intervention, length of stay for specific procedures, appropriateness of inpatient versus outpatient treatment, indications for imaging and lab testing, generic versus brand drug prescription, and so on."

And Dean did it despite the health system's compensation plan. Everyone seems to be singing the praises of physician employment these days, suggesting that it is perhaps the only way to align closely enough with physicians to cut deeply into clinical costs. But Dean has managed to cut clinical costs with roughly 98% of physician compensation based on productivity.

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