Health Systems Focused On Reducing Costs And Improving Patient Outcomes

2017 represented another year of continued shifts in the healthcare model. It was a year where the industry experienced:

• Ongoing uncertainty from a regulatory and policy perspective as the future of the Affordable Care Act, and how it will look, continue to be debated.
• The transformation from fee-for-service reimbursement to value-based payment models continues with a focus on voluntary payment models rather than mandatory.
• A laser focused approach for health systems and provider organization on addressing rising costs pressures and migrating towards value-based care to achieve Triple Aim goals.
• And, the steady pace of hospital and health system consolidations continues with more mega-mergers.

2018 promises a similar pattern, with continued consolidations, which also will impact the employment status of clinicians within health systems. As a result of growing health system consolidations there are fewer clinicians who remain independent. Consider this fact from physician recruiter firm Merritt Hawkins: The hospital employment rate for physicians rose from 11 percent in 2004 to 64 percent in 2014.. That is a remarkable shift in the last decade. As this trend continues, there will be a focus on increasing alignment and advancing collaboration between hospital executives/administrators and these new “employees.”

According to the Voices for Value Insight Series, a survey conducted by the Johnson & Johnson Medical Devices Companies (JJMDC), operating room clinicians are aligned with hospital executives on focus areas for U.S. health systems in 2018 . Our survey results are a good indicator of where health systems, particularly in their operating rooms, will focus their time and resources next.  Together, operating room clinicians and hospital executives identified the following as potential focus areas:

• Reducing costs (75 percent of respondents ranked this as a focus area)
• Improving the quality of care (57 percent of respondents ranked this as a focus area)
• Improving the patient experience and patient behavior change (48 percent of respondents ranked this as a focus area)
• Improving outcomes (48 percent of respondents ranked this as a focus area)
• Improving staff satisfaction (21 percent of respondents ranked this as a focus area)

Those focus areas, particularly the improving the patient experience and patient behavior change, all dovetail with a key focus area for JJMDC and our relationship with our customers in 2018: whole health surgery. In other words, how are all these focus areas intersecting to better serve the “whole” patient during an episode of care before, during and after a surgical episode. We’ve already seen successes from CareAdvantage from the Johnson & Johnson Medical Devices Companies, a holistic approach to helping health systems realize better outcomes and operational efficiencies.   

Streamlining Supply Chain Operations

For many hospitals and health systems making the transition to value-based care, the supply chain continues to be a strategic area of focus to identify opportunities for managing costs while improving the quality of care. For instance, nearly one-fifth of clinician time is spent on supply chain and inventory management, and reducing supply chain inefficiencies can help increase clinician time to be spent with patients, on research and education, or even training new staff. Additionally, up to 45 percent of a provider’s operating budget can be attributed to total supply chain costs, which could have been reinvested into improving patient care.

Supply chain inefficiencies were creating a strategic disadvantage for Intermountain Healthcare and, faced with recurring stock-outs and sporadic demand, Intermountain approached JJMDC about a possible partnership to identify process improvements, focusing specifically on Ethicon sutures. In addition, Intermountain wanted to align systems and processes to enhance its supply chain integrity with respect to JJMDC products and restore confidence among Intermountain’s Supply Chain and clinicians across all 22 hospitals. 

With JJMDC’s strategic partnership, Intermountain implemented changes to improve end-to-end customer service and operational efficiency, including: performance tracking of shipments, increased tracking and data transparency, as well as utilizing prediction accuracy measurement to facilitate demand and supply forecasting. To help reduce stock-outs, Intermountain also implemented a “dock to stock” system, switched to a 7am delivery time to reduce lead time, and monitored weekly orders. These actions led Intermountain and JJMDC to improved efficiencies at the distribution level with respect to JJMDC products and enhanced transparency among all partners. Specific results included:

• Dock-to-stock reduction: 48 hours to 4 hours
• Stock-outs reduced by 40 percent
• Overall reduction in product lead time
• Increased supply chain transparency
• Improved confidence and trust

Advancing Real-World Evidence

While there’s been a proliferation of innovative care delivery models and solutions, there’s also been a gap in evidence supporting these models and decisions being made by clinicians and health system executives.  There’s more data available than ever before, but health systems are not always optimally harnessing that data to their advantage.

Randomized, controlled clinical trials (RCT) represent the gold standard for development of new evidence in healthcare. However, there is broad recognition that RCT only provide limited information about the real-world patient care experience outside of a clinical trial. A number of additional data sources are available to provide information about real-world evidence, such as health plan claims data, health registries, quality of care data bases and patient reported outcomes measures, and there are opportunities for linking all these data into integrated real-world evidence to improve the quality and efficiency of care delivery.

Real-world evidence enables health systems to see the bigger picture when it comes to delivering care, and it’s why they’re investing in this research. A recent poll by JJMDC of health care executives found that health care companies are increasing investments in data analytics and real-world evidence: 48% of respondents said they are using or planning to use real-world evidence generation to share best practices in their health system and 48 percent said they would begin leveraging real-world evidence in 2018.

These are just a few examples of where partnership, new thinking and expertise have contributed to operational wins for health systems. It’s also laid the groundwork for more of this type of work this year. Let’s keep the focus on improving all healthcare outcomes — inside and outside the operating room — in 2018 and beyond.