Unwarranted variation in clinical care is costly: representing as much as $30 million of actionable savings opportunity for a typical organization. Addressing clinical care at Allina Health, however, was challenging—as a large system with limited resources, the organization struggled to standardize work to impact outcomes and reduce costs.
Allina Health’s executive team understood that, due to market and system demands, it needed sharper focus on increasing clinical value to improve financial margins. In response, the organization launched its Clinical Value Program, a systemwide effort to measure and improve clinical value. The program quantifies the value of clinical change work to improve outcomes, while reducing costs and increasing revenue for reinvestment in care.
Payment for healthcare services has shifted from volume based to value based, with an increasing number of payers basing reimbursement on quality of care.1 Clinical variation remains a widely acknowledged barrier to equitable and efficient provision of healthcare. Some variation is warranted, reflecting diversity in clinical symptoms and preferences of individual patients, but there is also unwarranted variation, which results in inefficient use of scarce healthcare resources.2
Unwarranted variation in clinical care represents an estimated $20 million to $30 million per $1 billion in revenue of actionable savings opportunity for a typical organization.3 Improving quality requires executive and board leadership to foster an organizational culture that’s dedicated to improvement and directs resources toward the structures, processes, and monitoring systems that ensure patients receive needed care without risk of harm.4
A not-for-profit health system, Allina Health is dedicated to the prevention and treatment of illness, and enhancing the greater health of individuals, families, and communities throughout Minnesota and western Wisconsin. Allina Health’s strategic framework focuses on improving clinical value to achieve the Triple Aim: improving the health of populations, while also improving patient care/experience, and lowering the per capita cost of care for populations.
With healthcare increasingly moving toward reimbursement for value, Allina Health recognized the need to focus more sharply on ways to fund its mission. As a large health system with limited resources, the health system was challenged to standardize work to improve outcomes and reduce costs.
Allina Health identified that a lack of insight into value (cost and outcomes) was contributing to unwarranted clinical variation. Previous efforts to improve clinical value had minimal visibility, making the spread of best practices inconsistent. The organization had not prioritized improvement work across the system and needed a comprehensive plan to optimize outcomes, cost, and appropriateness of clinical processes.
Allina Health’s executive team understood that, due to market and system demands, it needed a sharper focus on increasing clinical value to improve financial margins. In response, the organization launched its Clinical Value Program, a systemwide, team-based effort to measure and improve clinical value. The program quantifies the value of clinical change work to improve outcomes, while reducing costs and increasing revenue for reinvestment in care.
The Clinical Value Program focuses on several objectives:
The Clinical Value Program enlists the entire organization through collaboration and resource coordination, supporting clinically driven work to reduce unwarranted clinical variation and optimize outcomes, cost, and appropriateness of clinical processes. It identifies and validates improvement opportunities and implements practice and workflow changes.
Allina Heath identifies and shapes opportunities using five critical factors:
Allina Health’s initial step, conducted on a quarterly basis, is to identify opportunity through analytics and collaboration across finance, payer relations, and clinical leader functions. The health system used the Health Catalyst® Analytics Platform and broad suite of analytics applications as its primary source for managing and mining data. To identify opportunities for improving clinical value, data analysts used the rich data in the analytics platform to find undesirable variation in high-cost, high-volume clinical care processes. In addition to leveraging the data available in the analytics platform, the organization solicits opportunities for improvement from various stakeholders—physicians, pharmacists, telehealth, providers, nursing, and laboratory staff.
The organization created three teams to carry out its clinical value initiative:
Allina Health conducts weekly status checks, asking the implementation team for progress updates regarding the implementation timeline. Issues, risks, and barriers to success are tracked, as well as the financial impact to the organization, and associated quality measures and balance measures. This continues for 12 months, at which time the improvements become part of routine practices. Team resources are then reassigned to new improvement projects.
The Clinical Value Program’s multidisciplinary, team-based approach, which included physicians, clinicians, pharmacy, imaging, lab, supply chain, finance, and clinical analytics, effectively engaged stakeholders from hospitals, clinics, clinical service lines, home care services, and other departments.
With a data-driven, multidisciplinary team effort, Allina Health’s Clinical Value Program has improved care and delivered on the Triple Aim—achieving more than $33 million positive margin impacted by expense reduction and additional hospital in/outpatient revenue:
“At Allina Health, clinical value is a systemwide effort to understand the value of our work by reducing cost, increasing revenue and/or obtaining payer payments to performance, while monitoring quality and fiscal outcomes.”– Timothy Sielaff, MD, PhD, FACS
Chief Medical Officer
Allina Health is improving the Clinical Value Program’s transparency and engagement through the development of a performance tracking tool. This simple resource includes quality and finance metrics from the charter to help monitor and control project outcomes.
Allina Health plans to continue to use a data-driven, multidisciplinary team effort to strengthen the clinical value process, establishing it as routine practice across the system. In 2017, teams are on track to achieve a $12 million positive margin impact, due to expense reduction and added hospital inpatient and outpatient revenue—all accomplished by addressing clinical variation to improve and standardize care processes. Allina Health has budgeted $13 million in improvement opportunities for 2018.