Why Reducing Clinical Variation in Surgery is Crucial to the “New Normal” of Care
When entrepreneurs build companies, they have a simple goal: to progress from an initial concept to a repeatable, profitable business model. For the first few months, the firm builds out its operational model. Then, once it attains the winning formula, it hopefully rinses and repeats. The resulting consistency drives down costs and improves quality, helping to make the business a success.
The same, however, is not true in most clinical settings. Estimates predict that healthcare expenditures will account for 20 percent of GDP in 2020 and that waste across the sector will top $760 billion to $935 billion.
COVID-19 has dealt an additional blow to an already-precarious fiscal situation. Many hospitals are feeling the financial impact of having cancelled elective surgeries earlier in the year and wondering whether things will ever be normal again. According to the American Hospital Association, revenue losses for hospitals will run to around $325 billion this year.
Therefore, healthcare providers are looking for ways to regain financial traction as the country approaches a new normal. To thrive, they will need to do more than merely return to the old ways of doing things. Instead, they must model themselves on business-like practices to improve margins and make up for lost elective surgery revenues over the coming years. Clinical data analytics will play an increasingly important role.
Any approach must engage surgeons. Health professionals make decisions every day that impact care delivery and ultimately the variance in care provided. People in the industry care about supporting their respective institutions financially, but patient health is paramount and the fundamental motivation. Engaging physicians in dialog that demonstrates improved outcomes and quality, in addition to reduced cost, is important.
Clinical variation is a big deal for U.S. hospitals. Hospitals need to find ways to ascend the S-curve of organizational development and move to the winning formula described above. Therefore, procedures need to change, so that they can deliver health services to the right patient, at the right time, in the right way, at the right price. Surgical cost reduction will require a critical look at supplies, equipment, surgical methods, and setting.
Institutions that offer elective care should focus on all these elements of organizational excellence if they want to serve patients better and build a healthy future for care delivery.
So how can you improve margin in high-revenue-generating surgery cases?
#1: Know your opportunity
The first step in hospital response following COVID-19 should be to assess cost, quality and outcomes opportunity in surgery. As medical institutions recover from the crisis, they have a once-in-a-generation opportunity to tackle the hard stuff. Does your organization know where all the opportunity is? Healthcare organizations typically compare themselves to other like systems at aggregate in specific measures. However, a significant amount of insight can be gained from internal comparisons at a physician to physician level. Does your organization have data to show which physicians perform a specific surgery with the highest quality and lowest cost? Is there an opportunity to improve other physicians’ performance to the identified best practices? AI-enabled healthcare analytics can help build this case for the opportunity that exists.
#2: Rally behind a post-COVID-19 strategy that includes variation reduction
Organizational change is always a challenge, especially in clinical settings. Therefore, hospitals need to focus relentlessly on making reductions in clinical variation a priority. It must not fall off the strategic plan. What does your organization’s strategic plan focus on? Successful implementation will lead to positive outcomes, including improved margins, better surgeon engagement, and faster progress towards value-based care. Ultimately, improved organizational performance will bolster post-COVID-19 recovery efforts and reverse financial damage.
#3: Improve the Accuracy of Your Data
Healthcare data has evolved over time due to the increased use of Electronic Medical Records (EMRs) and digital health. However, the breadth of data across all facets of care delivery has also increased the complexity and inconsistency of the data captured. While many organizations have conquered the art of graphical visualizations, performance metrics, and dashboards, utilizing inaccurate data yields misinformed insights. This is where data fails to be meaningful information. How accurate is the data captured in your organization? In surgery, how accurate are your Doctor Procedure Cards? Is clinical documentation leading to incorrect supply utilization data? Do physicians challenge the accuracy of the data being presented? As part of the ongoing efforts to reduce clinical variation, there may be an opportunity to improve processes and data capture to ensure data integrity.
#4: Engagement is the key to success
Adopting a business-as-usual approach to dealing with post-COVID-19 realities will be the shortfall of any organization’s future health. More than ever, now is the time to focus on engaging perioperative leadership, physicians, nursing, and support staff in meaningful and lasting change. Reducing clinical variation is important to the path forward, but more important, to the patients and community that healthcare serves every day. Physician engagement and collaboration across a large team of stakeholders will drive the most value and determine the longevity and sustainability of change.
To learn more about how Empiric Health is driving change through its AI-enabled clinical analytics and clinically-driven approach to reduce unwarranted clinical variation in surgery, contact us at
For the latest insights and to connect with us directly, follow us on: 
