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Squeezing Costs Through Technology

By smace@healthleadersmedia.com  
   May 01, 2016

Today, UPMC's activity-based costing technology is close to paying for itself, after employing the labor of "a skunkworks team of about 12 people for four years who worked on this 100% of the time. If we haven't gotten the 100% payback, we will very shortly, and I think moving forward, it's infinite," DeMichiei says. "There isn't a surgical procedure that you can't measure and do this clinical variation exercise with, so just as a UPMC tool, the ROI will be exponential." Among the procedures on the short list for cost optimization next: spine surgery, knee replacement, and in the cardiac service line, valves and stents.

"This is this treasure chest of information that we've just opened up. We just open it up and see this gold shining at us. And we have years and years to mine our own gold."

In addition to the healthcare savings, UPMC Enterprises, the commercialization arm of UPMC, now stands to benefit from the revenues the UPMC tool will generate under an agreement with Health Catalyst to license the technology, content, and analytics innovations developed by UPMC.

Finally, the tool can also be used to internally benchmark individual UPMC operating units such as ICUs, pathology, or labs against each other. "This is this treasure chest of information that we've just opened up," DeMichiei says. "We just open it up and see this gold shining at us. And we have years and years to mine our own gold."

Reducing EHR costs
Health IT in general, and the EHR in particular, is also becoming the focus of new cost-cutting efforts. The University of Toledo Medical Center, a 267-staffed-bed hospital and associated clinics with 250 practicing physicians in Ohio, recently signed an agreement to expand its use of the cloud-based athenahealth EHR from ambulatory to inpatient settings.

Scott Mace is the former senior technology editor for HealthLeaders Media. He is now the senior editor, custom content at H3.Group.


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