Benchmarking saves hospital's bottom line

Financial turnaround follows comparative studies

The pre-benchmarking days at Bristol (TN) Regional Medical Center were the proverbial calm before the storm. The 377-bed minor teaching hospital had not secured a single managed care contract, although nearby hospitals had. From 1991 to 1993, revenues and physician reimbursements were declining as patients were siphoned off by competition's managed care contracts. In fact, from 1991 to 1993, administrators watched an $8 million operating margin fall to a $200,000 shortfall.

But after a three-year benchmarking and best practice initiative, the total number of hospital days for 16 diagnoses decreased by nearly 8,000 days, and charges were reduced by $4 million. Subsequently, Bristol acquired direct contracts for more than 30,000 lives with several large area employers, thereby excluding the managed care entity.

It is important to stress that benchmarking alone did not make this remarkable turnaround possible but was an important tool in the improve ment kit Bristol employed.

"There is a concern about the growing misconception that benchmarking alone can do it all," warns Michael Clare, MD, JD, vice president of HCIA Inc. in Baltimore, MD, the firm supplying Bristol with benchmarking databases and consulting.

The benchmarking process itself is only one cog in the wheel that drives the improvement process, Clare explains. "The energy and enthusiasm of the physicians and case managers, supported by the administration, are the real instruments of change. Benchmarking is a tool, not the process."

Bristol's flow of red ink eventually led administrators to commit to a long-term benchmarking initiative to create clinical pathways. But before any data were delivered, the organization had to establish an infrastructure and garner support for the project. "Participants were identified, and their roles and tasks were clearly defined," Clare says. "These steps contributed largely to the success of the project."

Dale Sargent, MD, agrees. Formerly the chief of staff and pulmonologist at Bristol, Sargent is now executive vice president of medical affairs for Wellmont Healthsystem, a three-hospital system that Bristol recently joined.

"So many people buy benchmarking data and then don't have a structure in place to use it," he says. "The data goes in an office where no clinicians see it, or even if they do, they aren't able to take action on it because no structures exist to support improvement."

That's why Bristol set the stage for benchmarking success by laying some groundwork. Administrators formed a hospital/physician partnership to champion the process and ensure buy-in from the beginning. They sought consensus on how the data would be used before obtaining them. For example, hospital leaders promised to obtain severity-adjusted data at the unit-of-service level because physicians didn't trust the systemwide data from the hospital database.

Partners strike a deal

Bristol administrators also promised to deal with any systemic problems that quality improve ment teams identified and to reassess hospital charges if benchmarking showed them to be out of line. In return, physicians promised to match their utilization and resource patterns with the best practices identified in the literature.

The partnership then established the following three objectives:

1. After evaluating the current processes of care - including pricing policies and practices patterns - the processes would be compared with the best demonstrated practice.

2. Only severity-adjusted data at the unit level would be used.

3. That information then would be incorporated into the quality and cost-containment strategies systemwide. "For example, we knew that an added benefit of the clinical pathways would be that our Medicare patients would be treated more cost-efficiently," Sargent says.

Yet Sargent is quick to point out that financial results are "almost secondary. The real results are improved quality of care as measured by patient outcomes. If you use rigorous benchmarking data to work from a clinical perspective, charges and lengths of stays will subsequently decrease."

With such a philosophy agreed upon, the partnership then examined the hospital's infrastructure. It replaced the utilization program with a case management department whose mandate was to develop, implement, and monitor clinical pathways. Case managers, who are RNs at the supervisory level, co-chair teams along with physicians. They also serve as resources for all nurses and physicians involved in the pathway's implementation. (Assigned to each of the nursing units, case managers also are responsible for resource utilization and review, discharge planning, and communicating with third-party payers.)

"You can't just tell physicians they need to get patients out of the hospital sooner; you have to put a mechanism in place to support that," Sargent says.

Targeting the top hot spots

Next, the partnership identified five diagnosis related groups representing cases that were high-risk, high-volume, and high-Medicare or high-Medicaid utilization:

· DRF 14 - specific cerebrovascular disorder;

· DRG 89 - simple pneumonia and pleurisy;

· DRG 122 - acute myocardial infarction;

· DRG 127 - heart failure and shock;

· DRG 209 - total knee and hip replacement.

Each DRG is handled by a separate quality improvement team that designs a critical pathway, Sargent explains. For example, the pneumonia team included three physicians, nurses, a case manager, a pharmacist, and other health professionals.

One of the early pathways was for DRG 89. Not only was it high-volume and high-Medicare utilization, but Bristol had a higher than expected mortality rate for pneumonia, according to the Tennessee peer organization.

Next, the team used HCIA reports that merged clinical and financial data. "It helped us uncover both practice and hospital charging issues so physicians wouldn't be expected to shoulder the full burden of cost containment," Sargent says. (See related story for more information on this analysis, p. 65.)

After comparing practices to HCIA's database and researching medical literature, the team was ready to incorporate them into a clinical pathway. For example, the data showed that Bristol was drawing four blood gases and taking four or five chest X-rays.

The team reviewed the medical literature to discover best practices associated with those areas. Both the literature and HCIA compara -tive data indicated all those procedures weren't necessary. "Now we do pulse oximetry on most patients and get only one or two X-rays," Sargent says.

The team also discovered bottlenecks in the care delivery system that were not conducive to shorter lengths of stay. For example, the literature showed the number one priority was to administer intravenous antibiotics in a timely manner. "When we looked at our process, we discovered antibiotics could be delayed up to eight hours simply because of the way our care delivery system was set up," he says.

Under the old system, when the patient came in through the emergency room, that physician made the diagnosis and called the attending physician for orders. Then the patient went to the floor, and a nurse took a history, pulled off the orders, and sent them to pharmacy.

"Finally, after the pharmacy received the orders, sent the IV back to the floor, the nurse could start it," he explains. "It could even be delayed at this juncture because, by this point, she is admitting two more patients."

The solution, the team learned, was not simply to write an order that the antibiotic was to be given within two hours. "There was no one who was responsible; the system wasn't set up that way," he says.

Instead, the pathway calls for antibiotic to be stocked and administered in the emergency room. "The emergency room staff is responsible for seeing that it gets done," he says. "It's an example of how pathways force you to understand how your system doesnwork, so you can then make it work."

But the process of identifying and implementing best practices never ends. After the pathway was completed, for example, they discovered the class of patients made a difference in the type of antibiotics needed. "By this point, our process was so streamlined, we were using it for every patient," Sargent says. "But we discovered that nursing home patients need a different antibiotic than that of patients who acquire the disease in the community."

The team then added another column on the pathway's antibiotic selection sheet for nursing home patients. "You can't foresee everything," he warns. "When you improve one bottleneck, that means you've just identified the next one."