It’s time to lose the waste and get serious about cost reduction.
It is the most significant health care leadership challenge of our time: how to reduce expenses while improving quality. At first, the tradeoff seems unavoidable. As expenses decrease, so too must quality, right? Not necessarily. Pioneering organizations that have worked with IHI over the past few years to identify and drive out waste in their systems are doing so in ways that improve the quality of care delivered to patients.
We invite your organization to be part of this exciting and promising work through the IHI initiative Impacting Cost + Quality. Because only by working on BOTH cost AND quality at the same time can we achieve a patient-positive relationship between the two.
Until recently, the rationale for health care providers to undertake quality improvement (QI) initiatives rested largely on “doing the right thing”; any financial benefit resulting from QI efforts was regarded as an attractive side effect. However, changes in the current economic environment and mounting evidence that better care can come at lower cost provide additional motivation. Thus far, the Institute for Healthcare Improvement (IHI) has focused efforts to make the business case for improving quality on trying to identify the “dark green dollars” (i.e., actual savings on the bottom line, as opposed to theoretical cost savings that cannot be tracked to the bottom line, or “light green dollars”) resulting from QI projects. This method has proved very challenging; although hospitals often claim cost savings from such projects, it is rarely (if ever) possible to track the savings to a specific budget line item.
A new approach to the business case is the systematic identification and elimination of waste, while maintaining or improving quality. Here, the aim is primarily financial; any positive impact on quality, while desired, is secondary. IHI’s new way of thinking about “dark green dollars” is to express the improvement aim in terms of waste reduction—that is, to identify inefficiencies in the system and remove them, rather than separating out, or not addressing, the cost of a quality improvement project and the potential savings it generates.
The cost of this year-long program is $16,500 per hospital team. This fee includes access to all program events and materials. It does not include the cost of travel to program meetings. IHI is pleased to offer a 50% discount to hospitals with fewer than 50 beds and members of the National Association of Public Hospitals.
By participating in the Impacting Cost and Quality initiative, your organization will learn to eliminate many types of waste, each with potential savings embedded in the improvements. These include:
Reduce ventilator-associated pneumonia (VAP) in the ICU
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$35,000-$40,000 per case
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Reduce pressure ulcers
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$43,000 per grade III or IV ulcer avoided |
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Reduce waste of blood products
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$500,000-$600,000 per year |
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Reduce length of stay and readmissions for CHF patients
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$2,200 to $4,200 per patient for inpatient costs |
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Reduce unwarranted repeat inpatient labs and X-rays
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$132,151 per year |
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IHI calculates that your organization’s investment in Impacting Cost and Quality (assumes enrollment fee plus approximately $24,000 in travel expense for a total of $40,500) will be covered if you avert just two cases of VAP or two pressure ulcers. Participants who do the work in this initiative will not only achieve these types of improvements and cost savings, but will also build a portfolio of changes to reduce cost by $500 per admission, with the ability to remove 1% or more of operating expenses year-on-year while improving the quality of care. For a typical 300-bed hospital, this is about $4,000,000 per year – nearly 100 times the investment in this program.
