Managing from Metrics

Effectively managing your service line requires not only an investment in developing a comprehensive system of care that engages all the key stakeholders, but also a commitment to continuously tracking, trending, and benchmarking your performance at the service line level. Outcomes management is an integral component of a destination center and acts as the driver for continuous performance improvement. Managing from metrics often separates the good from the great institutions.

To quote Peter Drucker, the man often credited with inventing modern management, "If you can't measure it, you can't manage it."

There are five key categories of measures you should be tracking:

• Patient experience
• Functional outcomes (i.e., post-surgical results)
• Operational data (e.g., average length of stay [ALOS])
• Clinical indicators (e.g., complications, range of motion, blood transfusion rates)
• Financial data (e.g., contribution margins, market share)

In general, the traditional management model is weak at collecting and aggregating this data into a comprehensive service line dashboard that can easily be shared and understood.

Patient satisfaction is probably tracked most consistently because it has become essentially mandated by the government through financial incentives, has benchmarks for comparison, and is understood by most stakeholders. Unfortunately, in many institutions, patient satisfaction scores are not specific enough to lead to significant improvements.

They are often used as a grade to compare against other institutions rather than a tool to continuously improve. This is especially true if a hospital's percentile ranking is already high.

Surprisingly, hospitals often struggle to report service line data about costs, contribution margin, net margin, and market share. They, therefore, cannot effectively analyze differences in cost among physicians or other variables that might drive profitability; nor are they comfortable sharing this data with the physicians and staff who could help make important improvements.

Furthermore, without any benchmarking data for comparison, hospitals do not understand how well they are performing. This lack of transparency leads to problems when administration makes statements such as, "we are losing money on joints." Without supporting data or identification of the root causes, physicians assume that the statement must be false or that it's their colleague causing the problem—and trust is eroded.

Operational data such as LOS, discharge disposition, volume, and market share is often but not always available. The data is likewise not typically physician specific. Again, without benchmark data it is difficult for hospitals to understand whether their ALOS and discharge dispositions are consistent with practices at other institutions. The discrepancies in ALOS for joint replacement patients can vary from a low of 2.5 days to a high of 5 days. Discharge to home can vary from 10% home to 95%.

Clinical data such as complications, range of motion, distance walked, pain, and blood transfusion rates are rarely available. Although the data may be collected at the individual patient level, it is typically not aggregated in a way that can be tracked by facility or by physician. So if changes to protocols are made, there is no way to know whether changes were beneficial except by anecdotal means. The only clinical data that is consistently tracked and benchmarked for surgical procedures are process metrics such as use and timing of antibiotics (Surgical Care Improvement Project [SCIP] metrics), done so because the government has mandated or rewarded hospitals for measuring and aggregating such data.

However, with the advances in information technology and increased attention placed on data management, leading institutions are starting to redefine their approach to service line management by investing in developing service line–specific dashboards, identifying reliable benchmark comparisons, and sharing their results with a multidisciplinary team responsible and accountable for service line performance.

Electronic dashboards are now available that make it easy to track, trend, and benchmark service line performance a well as share it with key stakeholders.

Consider the following issues identified and resolved by five different hospitals using the same dashboard:

• When one hospital uncovered significant differences in implant costs among five implant vendors, it shared that data with the surgeons to proactively discuss the need for consolidation.
• Another hospital discovered a very high urinary tract infection rate for its joint patients compared to benchmark averages and began drilling down into the root causes.
• A third hospital pinpointed major differences in reimbursement from private payers, including one that was reimbursing significantly less than direct costs. The hospital presented that data during renegotiations.
• A fourth hospital identified a significant variance in average distance walked among its joint patients after surgery, which was adversely affecting ALOS, and tracked the problem back to the differences in treatments used for pain and nausea management.
• A fifth hospital learned it had certain surgeons who were much more likely to discharge patients to skilled nursing or acute rehab, and discussed those findings in an effort to develop a more standardized discharge approach.

All of these examples highlight the value of managing service line performance with meaningful data and benchmarks as well as the potential impact on performance improvement. Destination centers must create a data-driven culture, institute accountability for performance, and reward service line managers for achieving superior performance.