Outcomes, practice pattern used to set benchmarks

Aim is to identify the best practices

By tracking the practice patterns of its treatment teams and comparing costs and patient outcomes among the teams, staff at the Shepherd Center in Atlanta are working to identify practices and procedures that produce the best patient outcomes for the best costs.

"We’re not trying to find cost savings by cutting people and services, but by identifying ways that we can become more efficient," says Gary Ulicny, PhD, chief executive officer of the hospital. Shepherd specializes in patients with spinal cord injury, acquired brain injury, multiple sclerosis and other neuromuscular disorders, and urological problems.

A hospital committee appointed to conduct the benchmarking project is in the initial stages of collecting data. Those data will be used to compare the treatment practices, procedures, and outcomes from each treatment team within a partic ular diagnosis with those of other teams and compare how they stack up in terms of cost and outcomes.

Each patient at Shepherd is on a critical pathway and is assigned to a treatment team, led by a physician and a case manager. Shepherd is reimbursed on a per diem basis for about 70% of its patients. Most of the rest are Medicare or Medi caid patients for whom Shepherd receives a case rate.

"We very rarely see fee-for-service or discounted fee-for-service patients," Ulicny says. "It’s definitely in our interest to identify all opportunities to utilize resources more efficiently."

Shepherd treats many of its patients from the intensive care unit through the acute rehab stay and outpatient therapy. "When you look at global pricing, you need to know what the cost is to provide care from day one," he says.

However, Shepherd’s efforts are not exclusively designed to cut costs, he emphasizes. "There are opportunities for savings, but they are by managing care and not cost. If you focus on cost savings, you compromise the quality of care," he says.

The benchmarking process will evaluate practice patterns to examine what practices, procedures, drugs, and equipment various treatment teams use and determine if they have an effect on outcomes.

Best costs, best outcomes

The committee will analyze the practices of the team with the best cost and best outcomes and determine what it is doing compared with what other teams are doing for the same patients. "Our goal is to identify the best practices and to set benchmarks on cost per day. Along with this, we are monitoring outcomes to make sure they don’t have any negative effect on quality," Ulicny says.

The benchmarking project will include an analysis of each treatment team’s variances from the hospital’s critical pathways, a cost-per-day analysis for each treatment team, and an examination of the outcomes for each patient treated by the team.

At Shepherd, the critical pathway is a part of the patient chart. Staff chart by exception; in other words, they check off pathway items or chart the variances. "The examination of the critical pathways should tell us what the differences are among the teams in terms of practice patterns," he says.

In examining data for the benchmarking project, the committee will use Shepherd’s cost accounting system to compare daily costs for teams treating the same type of patients. For example, it will compare cost per day for team A treating paraplegics and team B treating paraplegics, analyze why costs differ, and determine what the teams are doing to affect the costs.

It took staff at Shepherd about a year to set up a cost accounting system in which actual costs are automatically entered into the system along with the charges. The system factors in overhead and actual costs and is adjusted periodically. It produces daily reports on cost per day for each patient.

The types of medication being prescribed may be among the factors that affect the cost of care, Ulicny says. Some physicians may prescribe a certain medication because they’ve always used it. "We’re looking at coming up with new guidelines that may make the medication less costly to patients. This is particularly important when you have bundled pricing because the cost of medication comes out of the per diem rate."

The hospital already makes the data available to physicians and case managers so they can manage the cost of care by looking at the daily cost of treatment, Ulicny says.

Identifying benchmarks

The next step will be to identify the best practices and to set target benchmarks, possibly changing practice patterns. For example, every patient who comes into Shepherd receives X-rays on the first day. The committee may meet with treating physicians and determine that if patients have had an X-ray within three days of admission, they don’t need to receive another.

At the same time, the committee will compare outcomes from Shepherd’s extensive database and determine which procedure provides the best outcomes.

When cost cutting or efficiency measures are identified, Shepherd will continue to monitor the outcomes to make sure cost cutting doesn’t have a negative effect, Ulicny says.

"Cost and its relationship to quality can’t be separated," Ulicny says. "We have a foundation to measure both accurately, and now we are going to analyze what the relationship is and try to identify potential savings."