Utah Hospital Cuts Wasteful Testing, Saves $10M a Year on Health Care

New Web-based data tool tracks costs

The University Hospital in Salt Lake City, Utah, has found that approximately one-third of the testing done at the facility is wasteful, according to an article in the Salt Lake Tribune. The hospital has developed a new Web-based interactive tool, known as Value Driven Outcomes, that can run patient billing and payroll data to show the cost of every procedure while integrating quality data, such as mortality, infection, and readmission rates. The tool is saving the hospital about $10 million each year.

In 2012, hospital officials started working their way through a list of the top 50 medical conditions, such as joint replacement and pneumonia, to determine the best quality outcomes for the lowest cost, said Charlton Park, the hospital’s chief analytics officer. They are about 30 conditions into that list, he added. Before this initiative, each physician would use different supplies and techniques, which made costs vary.

The hospital has found that higher costs don’t necessarily mean better outcomes. For example, some doctors performing hernia repairs were using a balloon instrument to expand the abdomen so there was more room to work, Park said. These doctors argued that the balloon, which cost $300 to $400, allowed them to work more quickly in the operating room, meaning they saved money. But after running the data through the tool, Park said, they found that the device often prolonged the time spent in the operating room.

The tool also has allowed the hospital to choose medications in a smarter way. For example, doctors use it to pick the appropriate antibiotics for patients who present with cellulitis. Eventually, use of the tool will be mandatory for physicians throughout the hospital. Right now, however, only about 10% of the hospital’s 1,400 doctors are participating.

The tool could lead to more price transparency—such as cost breakdowns on bills—for patients, but the hospital isn’t there yet, according to Bob Pendleton, the center’s chief medical-quality officer.

The hospital plans to “start embracing price transparency so the consumer does know, ‘What does this mean for me?’,” he said, “and having [the tool] allows us to move faster down that path.”

Source: Salt Lake Tribune; August 9, 2016.