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Value-driven outcomes tool reduces costs, improves quality of care

Reduced costs and improved quality were associated with the implementation of a multifaceted value-driven outcomes tool in three clinical projects, according to study findings published in JAMA.

“Under alternative payment models, clinicians will theoretically deliver higher-quality care that results in better outcomes, fewer complications, and reduced health care spending,” Vivian S. Lee, MD, PhD, MBA, of the University of Utah, and colleagues wrote. “To implement alternative payment models effectively, physicians must understand actual care costs (not charges) and outcomes achieved for individual patients with defined clinical conditions—the level at which they can most directly influence change.”

Lee and colleagues performed an uncontrolled, observational study to determine the relationship between a value-driven outcomes tool and cost reduction and health outcomes optimization. The tool measured quality, outcomes, and variability in costs at the level of the individual patient.

The researchers selected and conducted three clinical improvement projects from 2012 to 2016. The projects included one on total joint replacement, one on the use of hospitalist laboratories, and a third on sepsis management.

Data included information from the 1.7 million patients, including 34,000 inpatient discharges, who visited University of Utah Health Care from July 1, 2014 to June 30, 2015.

Results indicated that professional costs accounted for 24.3% ($114.4 million of $470.4 million) of the total costs for inpatient episodes and 41.9% ($231.7 million of $553.1 million) of total costs for outpatient visits. Among the Medicare severity diagnosis related groups, postoperative infection (coefficient of variation [CV] = 1.71) and sepsis (CV = 1.37) had the highest total direct costs and cost variability, while organ transplantation had the lowest (CV 0.43).

Composite quality index increased from 54% at the start of the baseline year (233 encounters) to 80% at year 1 of implementation (188 encounters) for patients undergoing total joint replacement (absolute change, 26%; 95% CI, 18-35; P < .001). Mean direct costs were 7% lower (95% CI, 3-11; P < .001) in the implementation year and 11% lower (95% CI, 7-14; P < .001) in the postimplementation year, compared with the baseline year.

Mean cost per day for hospitalist laboratory testing was $138 (median interquartile range [IQR] = $113 [79-160]; n = 2,034 encounters) and $123 (median IQR = $99 [66-147]; n = 4,276 encounters) at baseline and during the evaluation period, respectively (mean difference = $15; 95% CI, 19 to 11; P < .001). There were no significant changes in mean length of stay.

Pilot sepsis intervention analysis showed that in patients with infection, the mean time to anti-infective administration following fulfillment of systemic inflammatory response syndrome criteria infection was reduced from 7.8 hours (median IQR = 3.4 [0.8-7.8]; n = 29 encounters) to 3.6 hours (median IQR = 2.2 [1-4.5]; n = 76 encounters) at baseline and during the evaluation period, respectively (mean difference, 4.1 hours; 95% CI, 9.9 to 1; P = .02).

“Implementing an analytic tool that allocates clinical care costs and quality measures to individual patient encounters was associated with significant improvements in value of care delivered across three clinical conditions that showed high cost variation at baseline,” Lee and colleagues concluded. “There may be benefit for physicians to understand actual care costs (not charges) and outcomes achieved for individual patients with defined clinical conditions.”

In a related editorial, Michael E. Porter, PhD, of Harvard Business School, and Thomas H. Lee, MD, MSc, of Harvard Medical School, wrote that this study “is an impressive and important step forward” in transitioning health care from volume to value for the United States and the world.

“The findings offer proof of concept that improving value by patient condition can lead to lower costs and better quality — at the same time,” they wrote. “There is much to be done and the road is long, but the report by Lee and colleagues points out how the path begins.” – by Alaina Tedesco

Disclosure: Lee reports funding from the University of Utah Study Design and Biostatistics Center, National Center for Research Resources, National Center for Advancing Translational Sciences, and National Institutes of Health. Please see full studies for a complete list of all other authors’ relevant financial disclosures.