Mercy Health Medicare breakeven engagement’s year-one savings top $9M Last Updated: September 22, 2014
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Challenge

Cincinnati-based Mercy Health (formerly Catholic Health Partners) was experiencing reduced margins and looking to develop a proactive approach to healthcare’s changing financial landscape.

Solution

The system partnered with Premier, Inc. (NASDAQ:PINC) to implement Premier’s Medicare breakeven (MBE) process, a comprehensive approach to drive significant cost reductions. The goal is to help CHP “breakeven” on Medicare patients and reduce its weighted equivalent inpatient admission by $25 per discharge, thereby creating a sustainable healthcare business model. The approach addresses clinical operations with an emphasis on redefining care management, removing waste, limiting unjustified variability and improving efficiency.

Variation from “optimal deployment” (over, under or improper use) leads to significant waste, negatively impacting patient experience, patient health, cost to patient and provider and revenue. Areas assessed in the engagement include level of care (LOC), blood conservation, interventional and diagnostic procedures, medications, or use of supplies.

QualityAdvisor, Premier’s proprietary clinical outcomes benchmarking application, was installed in all Mercy Health hospitals. QualityAdvisor data is used to help identify opportunities, drive change and monitor on-going performance.

A team of Premier clinical subject matter specialists, project managers and analysts was deployed to work with Mercy Health clinicians and physicians first to confirm areas of clinical utilization with high variance then to design and help implement improved processes that would optimize resource utilization and reduce unjustified utilization in Mercy Health hospitals.

Result

More than $22 million in clinical variation was identified. Mercy Health realized clinical improvements of about $9 million in 2013 with more improvements in process for 2014. Examples that have reached all the way to the bedside at Mercy Health include:

  • A significant decrease in blood transfusions, lowering costs while improving quality and safety. Transfusions place patients at risk so avoiding them is positive when clinically appropriate. Efforts focused on approaching blood use consistently with emerging new evidence, especially not preparing blood before surgery then discarding because it was not used.
  • A reduction in patient days in intensive care settings such as ICU and telemetry beds. Placing patients in the most appropriate setting earlier enables them to advance their rehabilitation and get moved on to home. The “different set of eyes” from the Premier team helped accelerate a significant redesign of CHP’s inpatient case management function.
  • As a result of Premier teams working directly with Mercy Health physicians, the physicians developed a better understanding of the role they play in choosing orthopedic and cardiovascular implants thereby improving costs and outcomes significantly.