0 Replies Latest reply: Dec 19, 2011 4:01 PM by Ben Baldyga RSS

    Hospital puts each patient's costs under microscope

    Ben Baldyga

      Please see this fantastic story on QlikView customer, Cambridge University Hospital, in the Financial Times.

       

      Addenbrooke’solution has been twofold: to put doctors in charge of each of its divisions – so called “clinical leadership” – and to give 1,000 senior doctors and nurses staff access to very specific data about the cost of treatment and their performance on a range of other indicators, through a tool called Qlikview,developed by a US-based technology company founded in Sweden. The combination has helped to ensure that Addenbrooke’s is on course to meet its tough ten percent savings target for the financial year, he says."

       

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      HOSPITAL PUTS EACH PATIENTS' COSTS UNDER MICROSCOPE

      In his office at Addenbrooke’s Hospital in Cambridge , Gareth Goodier, chief executive, isexamining a chart that smacks more of the company boardroom than the UK’scash-strapped National Health Service.


      A series of bars on a computer screen show which specialisms are making the hospitalmoney and which are not. Another click or two and the names of a group ofsurgeons are summoned. All have performed the same procedure on approximatelysimilar patients but there are startling variations in the number of diagnostictests each has ordered – varying from three to 47.


      At will,he can also discover what he calls the “hotel bill” for each dischargedpatient, composed of the cost of their ward time, laboratory investigations –“every last detail” – so it can be instantly discerned whether the patient’sstay has left the hospital out of pocket.

      “Oursystem shows you make a profit of about £80 if you do [a cataract operation] asa day case and you make a loss of £15 to £20 if they stay overnight,” says DrGoodier.


      Thelanguage of the balance sheet momentarily surprises in the context of the NHS,which historically has had little idea of how much its “free-to-all” care hascost. But because ministers have set the service an ambitious target of saving£20bn by 2015, doctors and administrators are being forced to focus as neverbefore on ways to drive waste from the system.


      DrGoodier, a forceful Australian, is convinced that the type of data he collectsare central to achieving that goal. “I don’t think there’s any other way tomanage this challenge,” he says.


      It is thedoctors who, with a stroke of a signature, run up costs for the hospital, hepoints out. “The doctor’s pen is the most expensive item in the place. Hechooses how long the patient stays in, he chooses the number of investigations,he chooses the drugs – how expensive they are – and while lay people think thatmedicine is a science and that there are few options, there are in factconsiderable options – you can waste an enormous amount of money.”


      Addenbrooke’ssolution has been twofold: to put doctors in charge of each of its divisions –so called “clinical leadership” – and to give 1,000 senior doctors and nursesstaff access to very specific data about the cost of treatment and theirperformance on a range of other indicators, through a tool called Qlikview,developed by a US-based technology company founded in Sweden. The combinationhas helped to ensure that Addenbrooke’s is on course to meet its tough ten percent savings target for the financial year, he says.


      Dr Goodieremphasises that when variations are noticed they do not trigger a stern edictfrom the chief executive’s office. Rather, they are “the starting point for anintellectual conversation” about whether they are warranted.

      Healthy profits

      Hospitalsacross the world are using data to sharpen doctors’ focus on the bottom line.But few have gone as far down that route as the Narayana Hrudayalaya group inIndia, writes Sarah Neville.


      Each day,senior doctors and administrators in the 14 hospitals it runs receive SMSmessages of the profit and loss account from the day before. Dailydissemination of the information is vital because it allows staff – who focuson keeping the cost of treatment as low as possible – to take rapid remedialaction, says Dr Devi Shetty, founder.


      He says:“If on the 14th of the month I realise . . . we are not making any margin, thenfor the next one week we try to reduce the discount given to the patient so theebitda [earnings before interest, taxes, depreciation and amortisation] margincomes to a healthy level.”


      Substantialreductions have come from cutting the number of patients staying overnight,although Dr Goodier emphasises: “There’s never any pressure in terms of sendingthe patient home prematurely – that has to be clearly stated. Our primaryconcern is always the quality of patient care and we have one of the lowestmortality figures in the country.”


      ChrisCalkin, finance director of North Staffordshire NHS Trust, who speaks for therepresentative body of health service finance staff, the Healthcare FinancialManagement Association, says that financial stringency across the NHS isleading managers and clinicians to confront their true cost base. A healthdepartment survey showed almost nine out of ten had implemented, or wereplanning to implement, so-called “patient-level costings”.


      Collectingsuch information is also producing much-needed scrutiny of whether differingcosts reflect anomalies in how patients are treated. “Patient-level costing isas much a clinical tool as a management tool,” says Mr Calkin.


      NickSeddon, deputy director of the think-tank Reform,who has studied the drivers of productivity in health systems worldwide, saidgathering data about performance not only harnessed the natural competitivenessof clinicians, but was also a social “good” because it gave patients vitalinsights into the quality of care.


      It had“the potential to be a truly disruptive innovation”, he said.