Service Lines and Activity-Based Costing Reveal True Cost of Care for UPMC

INACCURATE COSTING INHIBITS HEALTHCARE IMPROVEMENT GOALS

2012年，人均医疗保健费用近9 000美元(较2007年大幅增长，当时的人均费用徘徊在7 600美元左右)。¹Two years later, that average had jumped to $9,400.²随着成本的不断上升，美国各地的医疗保健领导者决心在提高质量的同时，遏制成本的增长。

卫生系统在寻求改善质量和控制成本时面临的最大挑战之一是，它们和与其合作的个人护理提供者都不知道为病人提供护理的真正成本是多少。³The reason for this surprising lack of visibility is that costing in U.S. healthcare has historically been based on charges or reimbursement rather than on the actual cost of providing care.

医疗保健组织的传统结构方式——根据部门和单位进行管理和预算——助长了这一问题。部门结构并不能准确地反映病人在护理提供系统中的经历，因为一个病人因为一个单一的疾病而接受治疗，跨越了许多部门和连续体的组织边界。

The UPMC, a large health system with more than 20 hospitals and 500 clinics, was keenly aware of this structural challenge. UPMC leaders recognized that in order to improve care and compete in today’s healthcare market, they needed to change their paradigm: they needed to consider all of the services they offered from a patient perspective (rather than from a facility or departmental perspective). They decided to break down departmental silos and adopt a service-line approach to care delivery.

At the same time, these leaders understood that to successfully improve quality and lower costs in this service-line approach, they would have to solve the costing problem. They would have to devise new ways to accurately measure the cost of providing care across the continuum and to relate the true cost of care to patient outcomes. Through innovative organizational changes, an activity-based costing methodology, and data-driven decision-making, UPMC is achieving this goal.

POPULATION HEALTH REQUIRES ALIGNMENT ACROSS DEPARTMENTS AND HOSPITALS

当作为单独的医院组织和管理时，卫生系统经常发现每个医院或部门的战略优先事项与整个系统的优先事项不一致。尽管管理者和提供者的意图是积极的，但这种不协调往往会导致浪费、不必要的临床变化和操作效率低下。

UPMC leaders found this to be the case in their large health system. Providers, budgeting, and care routines varied by location. Furthermore, hospitals and departments frequently made decisions without insight into how those decisions might affect the rest of the hospital or other hospitals in the system. And although UPMC offered similar clinical services across facilities, differences in billing and documentation systems and methodologies made it impossible to accurately compare and contrast the cost of those services among facilities—let alone to compare costs against competitors.

随着卫生系统承担更多风险，并开始实施人口健康举措，UPMC领导人需要一种灵活的方式来衡量和跟踪成本，使他们能够比较和对比不同护理地点、提供者和服务的相似患者群体。他们相信，获得利用和成本的透明度将允许他们与医生进行有意义的对话，这将帮助他们了解成本驱动因素，识别操作和临床变化，并创建一种问责和持续改进的文化。

ORGANIZATIONAL CHANGES ENABLE IMPROVED CARE AND COST TRANSPARENCY

UPMC leaders recognized that in order to succeed in population health and value-based care, they needed to reorganize along service lines. Furthermore, they understood that in order to manage service lines effectively, they had to adopt activity-based costing.

Organizing along service lines

To establish the collaboration and systemwide perspective needed to make good decisions for patients and for the organization, UPMC set out to break down the virtual walls between separate care locations. It initiated this new journey by creating and standardizing service lines across the entire health system.

UPMC started by forming four new service lines including Women’s Health, Orthopedics, Heart and Vascular, Neurology and Neurosurgery. In addition, it had various pre-existing service lines, Pediatrics, Cancer, and Psychiatric Services that were already organized with their own budgets, discrete units, and support staff.

然而，决定扩展服务线路和让供应商从服务线路的角度思考是两个完全不同的命题。UPMC发现，建立来自不同护理地点的服务线路提供者之间的关系是关键。To carry out this critical work, each service line has a formal leadership structure with three components:

• The service line team, a collaborative group of UPMC clinicians and administrators from across the system serving as champions within the service line
• The executive team is typically comprised of an executive operational leader and a physician leader
• The financial lead, who serves as the primary contact for all financial matters for the assigned area and collaborates with other financial areas such as supply chain

By bringing together service line practitioners across the system, UPMC has removed the institutional barriers to effective collaboration and decision-making. This new structure allows for meaningful, data-supported discussions about the benefits of particular care routines and procedures and the cost of care. It fosters understanding and support so that practice changes can be made that have a positive impact on systemwide operations and patient outcomes in all care locations.

Launching an activity-based costing methodology

The Health Care Advisory Board has ascertained that to successfully organize around service lines, each service line must have a single, integrated financial statement and must measure and share its performance at both the facility and system levels.⁴Having reached the same conclusion, UPMC leaders determined that while moving to service lines, they would also revise their costing methodology and financial reporting structure.

这些领导人知道，医疗保健的一些成本(例如，药品、用品和血液)是相当容易衡量的。通常可以通过计费系统跟踪这些费用到患者层面，前提是供应直接记入患者账户。UPMC的解决方案将这一概念提高到更细粒度的水平，通过将记录在患者帐户上的任何供应的成本包括在内，而不管它是否直接收费。这些成本属于直接成本。但是，为了准确地衡量提供医疗服务的全部成本，UPMC需要一种方法，不仅要跟踪这些直接成本，还要跟踪服务的使用情况——以及在病人层面提供服务的具体成本。

To this end, UPMC adopted a new activity-based costing (ABC) methodology. The intent of this ABC model is to track expenses at a level of detail that will allow UPMC to differentiate the costs of providing the same services to different patients.

Using information and analytics to improve service line performance

To achieve the necessary level of granularity, UPMC aggregated data from clinical documentation, billing, and other systems into an electronic data warehouse (EDW). In addition to using this EDW to track direct costs, UPMC developed algorithms that use the length of time that the patient spends in each care location to allocate costs for staffing and service utilization. This effectively assigns a different cost to each patient. In instances when time isn’t an applicable activity driver of cost, the system uses the best available activity data instead.

该系统的一个关键原则是，总账上的每一美元收入和成本都可以分配给患者——这不是一件容易的事情，但这使UPMC的方法独一无二。它驱动许多功能。可以通过多种方式聚合患者，通过诊断、程序、服务线路和子服务线路提供成本。病人也可以按医疗服务提供者进行汇总，这样每位医生就可以看到，相对于其他类似的病人，为他/她的病人提供医疗服务的成本是多少。

UPMC also leverages the detailed data to identify the cost difference of providing a service from one facility to another (Figure 1). Because of the level of detail now available, leaders can see the effect that different staffing models and operational practices have on the average cost per case and can bring this to the attention of the individual facilities so that they can make changes.

然而，由于这种设备成本的差异是由医生控制之外的因素造成的，领导者发现，要想有效地与医生沟通，他们还需要能够深入了解利用率数据，而不是成本，并且只向医生展示他们控制范围内的供应和流程的信息。因此，设施和个体从业者都被给予一致的，准确的，可操作的数据，以基础决策，改变行为，并确定改进的机会。

此外，每个服务线路每季度接收一个服务线路财务包。这包括与实际、预测和(从17财年开始)预算相比的服务线路性能趋势的执行摘要。他们还会收到服务线和子服务线边际报告(图2)，以及医生差异报告。

Service line leaders now depend on these reports to understand the contribution margin of procedures or sub-service lines within each service line. This in turn allows them to identify and analyze procedures or populations that indicate potential savings opportunity and, because of the new systemwide service lines, to engage the right stakeholders to effect practice changes, reduce costs, and improve outcomes across the system.

Activity-based costing in healthcare in action

Not every service line is the same. Size, clinical complexity, reimbursement models, and access to complete information influence each service line’s ability to drive improvement. Orthopedics and neurology and neurosurgery, for example, have focused on supplies and implants as their first opportunity for improvement. Women’s Health and Heart and Vascular, on the other hand, have looked at specific sub-service lines and procedures to change practice from open surgery to minimally invasive techniques or to shift toward or away from the use of robotic surgery. Each decision is based on clinical indications and outcomes, and further informed by cost.

For example, in Women’s Health, a comparative analysis of the cost and outcomes of various ways to do a hysterectomy led the physicians to conclude that minimally invasive techniques resulted in the best outcomes for their patients at the lowest cost. Use of minimally invasive techniques subsequently trended up as a percent of hysterectomy procedures.

That said, sometimes cost reduction is as simple as showing physicians how much things actually cost. After one orthopedic physician was shown that a special light he liked cost $370 per use, he stopped using it—with no negative repercussions to patients and an immediate reduction in his cost per case. In a related move, some service lines developed menus of less expensive and clinically equivalent supply choices.

UPMC SEES MILLIONS IN SAVINGS

As a result of organizing by service line, equipping decision-makers with the information they need to operate service lines effectively, and implementing an activity-based costing methodology UPMC has achieved notable and measurable results, and identified significant cost savings opportunities.

$5.0 million in realized supplies savings to date, with $42 million cost savings opportunities identified (approximately 2 percent of cost) for targeted service lines

• Two specific examples included in the $5.0 million savings realized to date come from developing and incentivizing physicians to use a menu of supplies in neurology and neurosurgery which has translated to $1 million in cost savings, and a similar menu for orthopedics implants and supplies which has reaped $1.5 million in savings.
• UPMC has identified $42 million in net savings opportunities for the upcoming 2017 fiscal year representing changes in physician patterns of usage for supplies and implants, reductions in care variation and productivity improvements. The majority of these opportunities are resulting from increased physician engagement through targeted service line development and the use of activity-based costing data necessary to measure the opportunities.

Transparency in recognizing contribution margin variation for specific procedures

UPMC’s ability to show cost and outcomes variation by specific procedures (sub-service lines) is causing practitioners to more rapidly adopt the use of the processes that demonstrate the best outcomes at the lowest cost.

Up to 97 percent improvement in time to access information

With the efficiencies realized through new analytic capabilities, orthopedics saved a full FTE by reducing the time to gather data for reports. Heart and Vascular can now obtain reports and information in a single hour instead of in the full week it used to take.

“Activity-based cost accounting is a forensic tool, and cost is the evidence left behind from clinical variation. We are learning to use that evidence to influence practice changes that will positively impact clinical outcomes.“

Rob DeMichiei, Executive Vice President and Chief Financial Officer, UPMC

WHAT’S NEXT

UPMC在确定与目标服务线路相关的预算节约方面取得的初步成功，将更加强调让这些服务线路对实现预算成本削减负责。此外，服务线的扩大以及服务线与医院结构内职能领域之间加强合作将带来更多的机会。卫生系统还将扩大其数据仓库和分析平台，进一步简化质量结果和成本数据的集成。世界杯厄瓜多尔vs塞内加尔波胆预测

REFERENCES

1. Herman, B. (2014).9 Drivers of High Healthcare Costs in the U.S.Becker’s Hospital CFO.
2. The World Bank, Data. (2016).Health expenditure per capita (current US$). Retrieved from https://data.worldbank.org/indicator/SH.XPD.PCAP
3. Kaplan, R. S., & Porter, M. E. (2011).The Big Idea: How to Solve the Cost Crisis in Health Care.Harvard Business Review.
4. Umansky, B. (2016).The system approach to service line management: A guide to organizing service line structures to derive value from systems.Health Care Advisory Board.

RELATIONSHIP BETWEEN UPMC AND HEALTH CATALYST

In January 2016, UPMC and Health Catalyst announced an agreement in which Health Catalyst licensed for commercial use an activity-based cost management system developed by UPMC as part of its effort to advance patient care while lowering costs. On February 29, 2016, Health Catalyst announced the close of a Series E capital raise that was co-led by UPMC, which is also a Health Catalyst customer.