How Intermountain trimmed health care costs through robust quality improvement efforts

Area of Science:

• Healthcare Management
• Quality Improvement Science
• Health Economics

Background:

• The Affordable Care Act aims to expand health insurance coverage to millions.
• Rising healthcare costs pose a significant challenge to healthcare reform efforts.
• W. Edwards Deming's process management theory offers a framework for cost reduction through quality enhancement.

Purpose of the Study:

• To evaluate the impact of applying Deming's process management theory on healthcare delivery and costs.
• To demonstrate how managing variation in clinical practice can lead to savings.
• To assess the potential national cost savings of implementing quality-driven healthcare models.

Main Methods:

• Intermountain Healthcare implemented Deming's process management principles since 1988.
• Focus on measuring, understanding, and managing variation in clinical care.
• Development of data systems and management structures to enhance accountability and drive improvement.

Main Results:

• Quality-based improvements led to significant cost savings.
• A specific protocol reduced elective induced labor, C-sections, and NICU admissions.
• This protocol alone saves an estimated $50 million annually in Utah.
• Potential national savings estimated at $3.5 billion if applied broadly.

Conclusions:

• Organized care, guided by process management principles, is crucial for successful healthcare reform.
• Improving healthcare quality is a viable strategy for reducing costs.
• The Intermountain Healthcare model demonstrates substantial financial benefits and improved patient outcomes.