Developing a method to identify waste in the acute care setting

Background Although there is growing consensus that reducing healthcare waste is one of the keys to U.S. healthcare cost containment, there is no available comprehensive set of measures or a method to assist hospitals in developing targeted policies and programs to reduce waste. Objective To develop a method to identify waste across the full spectrum of operational and clinical practices within acute care hospitals and provide a dashboard that summarizes and displays their opportunity to reduce waste. Methods Categories of waste and corresponding measures were identified through literature review, input from healthcare executives, and analysis of inpatient administrative, operational, and supply chain data from 219 hospitals within a database maintained by Premier, Inc. Measures were reviewed by clinical and database professionals and prioritized by: ability to identify waste, availability of data, and applicability across the full spectrum of operational and clinical practices. Benchmarks were determined for each measure using published, risk-adjusted methodologies or comparison with best-performing peers. Dashboards were developed for each participating hospital if data were available for at least one measure. Summaries were calculated and the variation within each measure was displayed. Results Following review, 16 measures were selected for the dashboard. Of the 219 hospitals, 216 exhibited waste on at least one measure (median=11 measures). Amounts varied by measure. For example, four of the measures showed opportunity in 120 or more hospitals representing between $67K and $6.1M in potential cost savings. Conclusions The 16 measures and associated dashboard provide a method for identifying waste across a broad spectrum of operational and clinical practices. This study suggests that waste opportunity summaries can be compiled for healthcare organizations. This could not only slow escalating costs, but could spur evidence-based practice, improve quality and safety, and potentially address disparities in access to care.