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Our Take

Efficiently prioritize care variation reduction opportunities

15 Minute Read

Size your CVR cost savings opportunity with dramatically less effort

Care variation reduction (CVR) is an opportunity for organizations to net multi-million dollar cost savings while safeguarding quality. Unlocking the CVR cost savings potential starts with prioritizing the right clinical conditions for care standardization. However, one of the most common pitfalls organizations fall into is spending too much time and energy identifying which care variation to go after

The good news is that there are efficient ways to prioritize CVR opportunities, so organizations can reserve capacity for the harder work of reducing care variation—not just identifying it.

 

The conventional wisdom

Prioritizing which internal variation to standardize is essential to any care variation reduction (CVR) effort. There are usually five steps in a typical CVR opportunity assessment:

  1. Group patients by condition and risk level.
  2. Identify performance gaps for each group, often based on quality outcomes like readmissions, complications, mortality, or length of stay.
  3. Rank order conditions by the size of performance opportunity and select a subset of conditions with the greatest running room.
  4. Pinpoint where the variation is: between facilities, or units, or clinicians.
  5. Conduct a root cause analysis to determine the drivers of the variation (e.g., specific tests, cost centers, etc.).

Five steps commonly used to prioritize CVR initiatives

 

Our take

While the typical prioritization process is defensible in theory, in practice it tends to fall short in two ways:

  1. The process focuses only on quality and fails to consider potential cost savings. As a result, many organizations spend significant time and energy standardizing care that does not unlock anticipated cost savings.
  2. Organizations spend a disproportionate amount of time on the prioritization process. The net effect is that clinicians exhaust themselves just deciding what conditions to standardize and don’t have the requisite bandwidth for the more labor-intensive work of determining how to actually reduce that variation.

To net significant cost savings from CVR, clinical executives need a way to identify system-level CVR opportunities with dramatically less effort. The reality is that most organizations’ greatest CVR opportunity falls within the same group of usual suspects (e.g., AMI, COPD, sepsis, stroke, etc.) and over the course of a long-term CVR strategy, most organizations will standardize all of the top 30 conditions for CVR nationally—making the crux of effective prioritization less about identifying what an organization should prioritize and more about when and in what sequence. To do so, organizations should focus on opportunities that meet three criteria: conditions that have cost savings potential, safeguard or improve quality, and are feasible to execute against.

 

Three approaches to efficiently prioritize CVR opportunities

There are three approaches to more efficient CVR prioritization. Each option takes into account both cost savings and quality improvement opportunities.

  • Approach

    “The easy button”

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  • Approach

    Balanced prioritization criteria

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  • Approach

    Hard cost targets

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Parting thoughts

No matter which approach you choose to prioritize your CVR opportunities, it’s likely to lead you to a list of usual suspect conditions (e.g., AMI, COPD, sepsis, stroke, etc.), making the prioritization question less what you should prioritize and more about when and how fast. The answer to that question depends on the resources and organizational commitment you have to fuel a scaled CVR effort.

The key to successfully scaling CVR and unlocking significant cost savings is alignment between your cost goals and level of organizational commitment to CVR. Many organizations set highly aspirational system-level goals for CVR, but fail to put the organizational muscle required to reach the size of their goal behind it. At best, this disconnect between ambition and organizational commitment causes organizations to fall short of their goal; at worst, it leads to inefficiencies and wasted time.

The reality is there is no right or wrong way to approach re-aligning your CVR ambition. Ultimately, you need a level of organizational commitment that will support the size of your CVR goal. Some organizations that have identified a commitment gap might be in a position to close it now. Others might need to take a different approach and adjust their cost savings goal itself—either by editing the quantitative number they are aiming for, or the timeline they are going to take to get there.

For further support, please access our additional care variation reduction resources in the "Related content" section of the PDF.

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