Here's what we did
We started by sizing the direct cost savings opportunity for each hospital outpatient department (HOPD) in the U.S. by measuring variation across physicians on similar outpatient encounter types. Variation captures the differences in the number or types of services provided to the same patient types at a given HOPD. This variation generates differences in direct costs between physicians within the organization. Significant differences in these direct costs would indicate there’s a cost savings opportunity.
We then summed the total direct cost variation across all HOPDs to calculate national outpatient CVR opportunity. This captures the total cost savings opportunity of eliminating internal variation across all organizations. We use the same methodology to calculate inpatient cost savings opportunity, allowing us to compare the results of both analyses directly.
Want more detail on our methodology? Download our in-depth methodology and results at the top-right of the page.