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Original research
Bending the cost curve: time series analysis of a value transformation programme at an academic medical centre
  1. Steven C Chatfield1,
  2. Frank M Volpicelli2,
  3. Nicole M Adler2,
  4. Kunhee Lucy Kim3,4,
  5. Simon A Jones3,4,
  6. Fritz Francois1,5,
  7. Paresh C Shah1,6,
  8. Robert A Press1,7,
  9. Leora I Horwitz2,3,4
  1. 1 NYU Langone Health, New York, NY, USA
  2. 2 Division of General Internal Medicine and Clinical Innovation, Department of Medicine, NYU School of Medicine, New York, NY, USA
  3. 3 Division of Healthcare Delivery Science, Department of Population Health, NYU School of Medicine, New York, NY, USA
  4. 4 Center for Healthcare Innovation and Delivery Science, NYU Langone Health, New York, NY, USA
  5. 5 Division of Gastroenterology, Department of Medicine, NYU School of Medicine, New York, NY, USA
  6. 6 Department of Surgery, NYU School of Medicine, New York, NY, USA
  7. 7 Divisionof Infectious Diseases, Department of Medicine, NYU School of Medicine, New York, NY, USA
  1. Correspondence to Dr Leora I Horwitz, Department of Population Health, NYU School of Medicine, New York, NY 10016, USA; leora.horwitz{at}nyulangone.org

Abstract

Background Reducing costs while increasing or maintaining quality is crucial to delivering high value care.

Objective To assess the impact of a hospital value-based management programme on cost and quality.

Design Time series analysis of non-psychiatric, non-rehabilitation, non-newborn patients discharged between 1 September 2011 and 31 December 2017 from a US urban, academic medical centre.

Intervention NYU Langone Health instituted an institution-wide programme in April 2014 to increase value of healthcare, defined as health outcomes achieved per dollar spent. Key features included joint clinical and operational leadership; granular and transparent cost accounting; dedicated project support staff; information technology support; and a departmental shared savings programme.

Measurements Change in variable direct costs; secondary outcomes included changes in length of stay, readmission and in-hospital mortality.

Results The programme chartered 74 projects targeting opportunities in supply chain management (eg, surgical trays), operational efficiency (eg, discharge optimisation), care of outlier patients (eg, those at end of life) and resource utilisation (eg, blood management). The study cohort included 160 434 hospitalisations. Adjusted variable costs decreased 7.7% over the study period. Admissions with medical diagnosis related groups (DRG) declined an average 0.20% per month relative to baseline. Admissions with surgical DRGs had an early increase in costs of 2.7% followed by 0.37% decrease in costs per month. Mean expense per hospitalisation improved from 13% above median for teaching hospitals to 2% above median. Length of stay decreased by 0.25% per month relative to prior trends (95% CI −0.34 to 0.17): approximately half a day by the end of the study period. There were no significant changes in 30-day same-hospital readmission or in-hospital mortality. Estimated institutional savings after intervention costs were approximately $53.9 million.

Limitations Observational analysis.

Conclusion A systematic programme to increase healthcare value by lowering the cost of care without compromising quality is achievable and sustainable over several years.

  • health services research
  • cost-effectiveness
  • hospital medicine
  • management

This is an open access article distributed in accordance with the Creative Commons Attribution Non Commercial (CC BY-NC 4.0) license, which permits others to distribute, remix, adapt, build upon this work non-commercially, and license their derivative works on different terms, provided the original work is properly cited, appropriate credit is given, any changes made indicated, and the use is non-commercial. See: http://creativecommons.org/licenses/by-nc/4.0

https://doi.org/10.1136/bmjqs-2018-009068

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    Footnotes

    • SCC and FMV contributed equally.

    • Twitter @leorahorwitzmd

    • Contributors SCC, FMV and NMA led the intervention, obtained data and drafted and revised the paper. KK and SAJ designed the analysis, analysed the data and drafted and revised the paper. FF, PCS and RAP supervised the intervention and revised the paper. LIH designed the analysis, analysed the data, drafted and revised the paper and provided supervision for the evaluation. As the guarantor, LIH accepts full responsibility for the work and/or the conduct of the study, had access to the data and controlled the decision to publish. The corresponding author (LIH) attests that all listed authors meet authorship criteria and that no others meeting the criteria have been omitted.

    • Funding The authors have not declared a specific grant for this research from any funding agency in the public, commercial or not-for-profit sectors.

    • Competing interests All authors are employees of the institution in the study.

    • Patient consent for publication Not required.

    • Provenance and peer review Not commissioned; externally peer reviewed.

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