Prior to the COVID-19 pandemic, physicians were attuned to the operational and financial challenges faced by most hospitals and healthcare systems. They just weren’t necessarily living those challenges firsthand.
However, when procedures were canceled and demand for supplies soared, the experience became more personal. Many physicians experienced steep revenue decline as well as the challenges of securing the right medical supplies when they were needed. They also saw how the industry’s struggle to create clean, standardized data shared across systems made it more difficult for front-line workers to battle the pandemic. For many physicians, this experience served as a reset, giving them a broader perspective on their role in the healthcare ecosystem, particularly as the industry looks to rebound from the financial impact of the pandemic.
More than ever, physicians are committed to helping address the financial pressures providers face, playing an increasingly pivotal role in healthcare’s rush to become data-driven.
Breaking Down Data Silos
The shift to a value-based care model has put even greater emphasis on data to help healthcare finally understand the true cost of delivering care, including the cost of supplies, anticipated patient outcomes and how to reduce unwarranted clinical variation. Today, few hospitals and health systems have a thorough understanding of where variation lies; physicians have even less visibility.
The next phase in data transparency is for hospitals to analyze cost and variation at the physician and case level and give physicians access to data and evidence to fully understand cost-per-case, cost-per-discharge and patient outcomes. The good news is that many healthcare organizations have been investing in technologies and systems, including EHRs, ERPs and supply chain automation, to modernize their infrastructures and business processes.
Using Data to Drive Visibility, Collaboration
We know that unwarranted clinical variation can have a negative impact on patient outcomes, while at the same time, it drives up costs for hospitals. As clinically integrated supply chains become the norm, it will become easier to identify where and why variation occurs. Specifically, we will have greater insight into physician utilization, identifying differences in how a particular product is being used and whether the product is having an impact on local outcomes, such as OR time, length of stay and readmissions. This improved visibility will allow hospitals to have a clearer picture of supply costs per case by the physician. The data combined with clinical evidence will enable supply chain teams and physicians to work together to understand where the data supports the use of a particular product (and consequently where it doesn’t) and develop strategies that will reduce unwarranted variation.
Let’s use antimicrobial mesh envelopes as a hypothetical example of how we can tie data and clinical evidence to local outcomes to understand if a premium product is appropriate for an organization. A randomized controlled trial might demonstrate that the use of antimicrobial mesh envelopes reduces infection rates by .5% (reducing surgical site infection rates from 1.2 to 0.7%). While it might be tempting to decide based on the numbers alone, it’s important to evaluate all data to understand if standardization will produce a measurable impact for the organization. The data provides critical insight in the decision-making process. For example, it can indicate whether the use of the mesh is appropriate given the organization’s current state of surgical site infections and it can help supply chain teams evaluate the volume of mesh purchased compared to the industry standard. EHR data can be used to evaluate the product’s utilization across specific procedures and specific patient populations. Local outcomes data can help uncover surgical site infection rates in cases using this product and in cases that didn’t. When we put this information into physicians’ hands, it will facilitate more informed, collaborative conversations with supply chain teams about product selection and utilization, ensuring a patient-first approach as the organization pursues cost optimization strategies.
A hospital in the Southeast adopted this approach by sharing clinical evidence regarding the efficacy of using a type of antibiotic-loaded bone cement with its physicians. After a data-informed discussion, the physicians agreed to follow evidence-based guidelines to adjust the use of this product only for patients at high risk. The health system was able to reduce the clinical variation of this product, reducing annual costs by more than $500,000.
The business of healthcare is in the midst of a complex, yet exciting transformation. We must rebound from the financial losses of the pandemic while continuing to accelerate the shift to value-based care. We must also contend with a growing number of non-traditional competitors entering the healthcare market, such as Amazon Care, CVS and Walmart, as well as the rise of consumerism. Rising to these challenges requires a new level of financial, clinical and operational efficiency and agility.
The pandemic underscored data’s role in the future of healthcare. It also created more strategic and lasting partnerships between supply chain and clinicians. Moving forward, we need to build upon those relationships to better understand how supply choices influence total cost of care, reimbursement, safety, quality, outcomes and the patient experience.
About John Cherf, MD, MPH, MBA
As Lumere’s Chief Medical Officer, Dr. Cherf provides clinical and organizational leadership to the development and application of evidence-based insights. He works closely with health systems to design care variation reduction programs and to implement specific initiatives. Previously, he held a five-year term as the chief of orthopedics for Advocate Illinois Masonic Medical Center. Dr. Cherf has more than 20 years of clinical experience in sports medicine and knee surgery.