In today’s healthcare landscape, data and analytics have shifted from being optional to becoming essential tools that underpin an organization’s ability to deliver high-value care. High-value care is defined as patient-centric care that improves quality and outcomes while lowering costs. Healthcare reform, particularly under Medicare reform (MACRA), has placed providers at risk for not improving value, making data and meaningful analytics vital components of doing business. These tools empower hospitals and health systems to achieve the necessary performance improvements in a value-based environment.
Unwarranted variation in care is a common issue in most healthcare institutions, leading to suboptimal patient outcomes and increased costs. This variation occurs when there is a disparity between the desired “best practice” and the actual practice. Analyzing this variation, after excluding outliers and applying risk and severity adjustments, can identify significant differences in quality outcomes and costs associated with specific physicians or care providers. This “apples-to-apples” analysis provides actionable data to close the performance gap.
Several causes contribute to unwarranted variation, including suboptimal clinical practices, overuse of supply-sensitive care, misuse of preference-sensitive care, underuse of proven effective care, and the provision of clinically unnecessary services or procedures. Addressing unwarranted variation poses challenges such as knowledge gaps among clinicians, inadequate economic incentives, concerns about malpractice risk, physician autonomy, and insufficient decision-support tools.
The healthcare landscape is evolving towards “value-based purchasing,” where providers are held accountable for both the cost and quality of care. This shift focuses on managing the care system to reduce inappropriate care and unwarranted variation. Hospital leadership, including boards, executives, and medical staff, must actively address this issue and leverage benchmark data at the national, regional, and organization-specific levels to identify opportunities for improvement in clinical practice, both in inpatient and ambulatory settings.
To effectively reduce clinical variation, an organization-wide commitment to aggregating, analyzing, and disseminating credible data related to quality, outcomes, and cost is crucial. Benchmark data and advanced analytics empower leadership and quality teams to assess performance against historical trends, performance targets, and peer group comparisons.
Starting a sustainable program to eliminate unwarranted clinical variation can be done step by step, prioritizing areas based on factors like the likelihood of success, potential benefits, required resources, and expected implementation timing. Some key categories for reducing unwarranted care variation include medical/surgical supplies, pharmacy, accommodation, laboratory and pathology, and imaging.
Case studies and best-practice analyses can help pinpoint areas for improvement. For example, the focus on reducing unwarranted variation in knee and hip joint replacements is a national priority. Programs like Comprehensive Care for Joint Replacement (CJR) incentivize hospitals to optimize care quality, streamline postoperative care, and reduce costs.
Access to credible data and analytics is essential for identifying significant opportunities to improve financial and clinical performance and addressing the root causes of suboptimal performance. This applies equally to physicians and other clinicians, as they play a vital role in reducing unwarranted clinical variation. The right tools are critical to achieving these efforts successfully.
In summary, data and analytics are no longer optional but essential for healthcare organizations to deliver high-value care. By leveraging benchmark data and advanced analytics, healthcare institutions can identify areas for improvement, reduce unwarranted clinical variation, enhance care quality, and ultimately improve patient outcomes while managing costs effectively.