Reducing Cost Through Standardization

Abstract

Opinion statementThe drive for standardization of care within pediatrics based on medical evidence is gaining momentum among hospitals and providers. Initiated by care guidelines with origins in specialty societies, adoption of pathways is now being implemented in many settings. The keys to success of these algorithms in narrowing practice variation and their potential contribution to reducing utilization of unnecessary resources are not uniformly addressed in advance. Clinical guidelines are often not updated frequently to incorporate new evidence from the literature. Education of providers about the goals and process of pathways in advance may not be sufficient depending on the commitment of the clinical champions of the algorithms. Anticipatory modeling to identify potential barriers in the workflow that interfere with proper implementation of pathways is beneficial with the opportunity to refine the algorithm where appropriate. In order to confirm cost reduction, economic data points need to be defined in advance for comparisons between preimplementation and post-implementation periods. It is possible that improved outcomes from narrowed practice variation may not always lead to cost reduction which should be reconciled by analysis of the data. Our experience with these limitations motivated our Department of Cardiology to seek a different approach to care pathways, standardized clinical and management pathways (SCAMPs) which engender algorithm design informed by existing evidence and experience of clinicians coupled with targeted questions that can be addressed by active data collection. Providers are free to depart from recommendations in the algorithm but must explain their reasons, an option that promotes participation. Data analysis combined with new medical evidence leads to iterative changes, greater standardization, and reduction of cost.

Regional variation in cost of neonatal intensive care for extremely preterm infants

“…These results demonstrate that there is much room for cost reduction and standardization in support of cost reduction, one of the quadruple aims of healthcare quality improvement [ 51 ]. Reducing large cost variation through standardization can lead to cost savings [ 52 , 53 ]. Our findings may be useful to policymakers for planning and resource allocation decisions.…”

Role of practice standardization in outcome optimization for CDH

“… 22 In their study of the effect of standardization on reducing costs for pediatric patients, Friedman and Fulton found that standardized assessment and management plans, similar to CPGs, had the potential to reduce patient care costs in pediatric cardiology by up to 51%, when implemented consistently. 25 …”

“…Without regular appraisal of new or emerging evidence, and the subsequent updating of CPG recommendations, providers may base their decision-making on outdated evidence, which may contribute to poorer outcomes, or in unnecessary healthcare resource utilization. 25 …”

“… 43 Given the significant postdischarge morbidity associated with CDH, it is certain that the lifetime direct and indirect costs to the healthcare system and to CDH patients’ families are substantial, underscoring further the need to leverage standardization for fiscal benefit. 25 44 …”

Validation of a Costing Algorithm and Cost Drivers for Neonates Admitted to the Neonatal Intensive Care Unit

“…6,7,11,12 In a publicly funded health care system with finite human and financial resources, it is essential to improve the efficiency of care (by optimizing expenditures and concentrating quality of delivery), which requires the ability to determine costs for all infants. 3,6,7,13 Advancements in this area are currently limited by the need of harmonized and reliable costing data in Canada and in other countries. 9 Furthermore, most costing studies have focused on preterm populations, relied on average costs per diagnostic groups or estimated costs using nonstandardized databases.…”