Over the past few years, articles like "The Bitter Pill," Time Magazine's exposé on hospital medical bills, have pushed the health care cost crisis into the national spotlight. But the focus on outrageous hospital charges, such a $77 price tag for a $1 box of gauze pads, is symptomatic of an even bigger problem in health care. Because most institutions don't understand their actual costs, the charges on patient bills typically vary wildly and are often marked up to whatever the institution believes the market will bear.
As a tool for capturing and analyzing true health care costs throughout an entire institution, VDO aims to change that paradigm. "With VDO, we're one step closer to solving the health care cost crisis in America," says Vivian S. Lee, M.D., Ph.D., M.B.A., senior vice president for University of Utah Health Sciences. "We hope to share the success of this model with other institutions, so we can work together to transform the value of health care."
The tool starts by taking 135 million rows of the institution's billing, clinical, general ledger, and payroll data and allocating it at the patient visit level, so that everything from the true cost of gauze tape to actual minutes of nursing labor can be measured. It then integrates quality data including mortality, length of stay, readmits, bleeding, and infection rates to compare the costs to outcomes.
The tool also enables users to adjust for a variety of clinical situations, including the severity of a case and the type of patient. This makes it easy to identify variations between providers, processes, and supplies, to drill down into the causes of the variability, and to quickly change practices to boost cost efficiency.
For instance, VDO helped one University of Utah physician group realize that a commonly prescribed bronchodilator that costs $200 delivered the same outcomes for most patients as a similar $15 drug. By switching to the less expensive bronchodilator, the group was able to save more than $200,000 a year. Another physician group, upon seeing the cost and outcome differences for post-operative physical therapy practices, was able to shorten length of stay and reduce hospitalization costs by $700 per patient, simply by ensuring that post-op physical therapy always starts on the day of surgery. These care delivery changes represent just two of the innumerable opportunities that are possible when providers have easy access to the data they need to make better decisions.
"With VDO, we now have the power to truly measure what we manage, so we can bring down our costs while simultaneously improving our quality," says Kensaku Kawamoto, M.D., Ph.D., Director of Knowledge Management and Mobilization for University of Utah Health Sciences. "Winning the Innovator Award confirms our belief that VDO has transformative power that reaches far beyond our institution's walls."
About University of Utah Health Care
University of Utah Health Care is the Intermountain West's only academic health care system, providing leading-edge and compassionate medicine for the people of Utah and a referral area encompassing five states and more than 10 percent of the continental United States. The health system includes four hospitals – University of Utah Hospital; the University of Utah Orthopaedic Center; University Neuropsychiatric Institute; and Huntsman Cancer Hospital – with more than 1,000 physicians offering more than 200 medical specialties