The “next generation” of reducing care variability: referrals

Key Takeaway: Intermountain Healthcare CEO Harrison says providers need to target variability, reduce cost, improve quality, before "disruptors" take over their traditional sources of revenue.

Marc Harrison, MD, President and CEO, Intermountain Healthcare

Where does the health care industry stand on reducing the variability of care—a key component of improving quality and controlling costs? Even Intermountain Healthcare, Salt Lake City, a decades-long leader in reducing care variation, is “nowhere near done,” said President and CEO Marc Harrison, MD, in the discussion “Provider Connect: Future Bets in Taking Risk” at Health Evolution Summit. He estimated that Intermountain still needs to remove wasted expense equivalent to 30 percent of the cost of care.

“A big challenge for all of us is to have predictable processes that lead to great results,” he said. “We have put a lot of effort into our care models, and we haven’t gotten it licked yet, but it’s made a huge difference.”

Intermountain has led the effort to reduce care variability since 1986, when it began a long-term project to apply industrial process improvement principles to specific procedures such as prostatectomy, gall bladder removal, pacemaker implantation, and coronary artery bypass grafts. Each area of focus has achieved significant savings. For example, Intermountain changed its protocols for prenatal care and delivery and reduced rates of elective induced labor, unplanned cesarean sections, and admissions to newborn intensive care units. That one protocol saves an estimated $50 million in Utah each year, according to an article published in 2011 in the journal Health Affairs.

Intermountain insures almost a million people in its own health plan, Select Health, in addition to operating 22 hospitals and employing hundreds of physicians. The organization has made it a central goal to remove cost from its care delivery system since Harrison took over the leadership in 2016. One key strategy was to include the health plan in the overall profit-and-loss picture for the entire organization, an idea that Harrison called “radical.”

“I brought the CEO of the health plan to the leadership table, and asked, ‘How much cost do we have to take out for you to be competitive?” he said.

Harrison said Intermountain is moving to the “next generation” of controlling variability by addressing referral patterns between primary care physicians and specialists. For example, when they are referring patients for orthopedic surgery, primary care physicians review key metrics: whether surgeons send their patients to a skilled nursing facility after surgery, which surgeons have high complication rates, how long their patients stay in the hospital after surgery. They have identified what Harrison calls “high value surgeons” and are channeling all their patients to those surgeons.

“The other orthopedic surgeons are not so happy about this, but it’s now a virtuous circle that drives holistic value for the patient,” Harrison said.

Intermountain is also investing heavily in alternative ways to deliver care. In February, it announced Connect Care Pro, a “virtual hospital” that brings together 35 telehealth programs and more than 500 caregivers to enable patients to receive the medical care they need, regardless of where they are.

Other providers need to take steps to reduce variation and expand patient options, and they must not delay. “All that inpatient hospital revenue, all those procedures that are done inpatient but could be done at an ambulatory care center or in a physician office—all of that is going to get carved away by disruptors,” new entrants who can offer lower cost services,  Harrison said. “You have got to get on this.”

 – Elizabeth Gardner