7 months ago

Decisio White Paper

COST OF CARE There is an

COST OF CARE There is an old adage in health care quality improvement circles that “improving quality saves money.” If you think this is an idea that has gone out of fashion, think again; countless government initiatives, programs, and regulations are based upon this premise. If you go to work every day and use an EHR, you are operating under the assumption that EHRs improve patient safety, operational efficiencies, and the lower the costs of care. You, or the organization you work for, has likely benefited from an EHR Incentive Program check for the meaningful use of that EHR at some point over the last five years. The idea is a simple one: do it right the first time, and you will be rewarded with lower costs. At some point in the 1990s, we grew to accept that about 30% of our health care system costs were based upon waste and inefficiencies. The figure came from a now infamous editorial in the New England Journal of Medicine that the author himself promoted as an estimate based on the “reasoned judgment of respected experts” – while simultaneously calling for more studies to properly evaluate the cost of poor quality care 11 . We can debate whether or not the actual figure holds, but since it was proposed, we have a heightened sense of the costs of care. It is now common to measure not only the clinical outcome of interventions but also utilization and cost outcomes. To this end, we worked with our clinical partners to identify the cost savings associated with decreased utilization. In this case, a decrease in ICU length of stay (LOS) in the overall hospital LOS for patients with sepsis, was measured before and after the implementation of DECISIOInsight ® . To calculate this savings, we subtracted the pre and post LOS to create a difference in LOS factor. That difference factor was multiplied by the number of patients seen with sepsis during the post-implementation period by the number of days in the period to create a per day savings rate for patients hospitalized with sepsis. The per day savings rate can then be forecasted on an annual basis. Daily inpatient cost (average) $2,608 Difference factor 3.16 Daily savings opportunity $77,492 Annual savings opportunity $28,284,810 Table 2. Cost Savings This is a conservative estimate, based on a few key factors: (i) the cost per day was taken from a standard national report and is much lower, based on conversations with our clinical partner, than their current average, (ii) savings from a reduction in ICU bed days, which are costlier than non-ICU days, have not been included in the calculation, and (iii) this assumes roughly the same case mix or March 2018 DECISIO | 10

number of patients with sepsis, throughout the calendar year (this observation occurred Jun-Nov). Finally, we present cost savings based upon LOS data because it is striking and convincing. It is important to consider that there are other, meaningful ways in which a tool like DECISIOInsight ® helps to reduce the cost of care that are harder to quantify but which can add up to tremendous savings. These include things like: • Efficiencies gained from workflow standardization and automation • Reduction of inpatient acuity with early identification and treatment of sepsis which thereby reduces staff/patient ratios and ICU time • Avoidance of financial penalties associated with global APR-DRG billing • Avoidance of financial penalties associated with readmissions • Improved ability to report data to pay for performance or other optional quality reporting initiatives which may in turn improve revenue • Improved publically reported quality rankings which improves public perception about the desirability of being cared for in your facility We believe we have demonstrated that the old adage is true, improving quality does save money. March 2018 DECISIO | 11

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