Outcomes-Based Standardization: A New Approach to An Old Problem

The COVID-19 pandemic has significantly strained care delivery, reduced available resources, and further destabilized health care finances. As health care organizations emerge from a pandemic that has worsened uncontrolled health care spending, while greatly reducing patient volumes and revenue, reactive cost cutting with little regard for the people at the end of those decisions quickly emerged as the standard approach. Historically, limiting cost decisions to product selection was a common, yet minimally effective, strategy for controlling health care spending. In the post-COVID health care environment, where clinical and financial challenges are greater than ever, a new approach to reducing health care spending offers promise. Outcomes-based standardization is an approach that begins with the end in mind, incorporating lean concepts to alleviate redundant or ineffective products and practice, while prioritizing value added activities to catalyze the greatest reduction of harm, time, and money spent. Outcomes-based standardization is a framework for change that balances clinical and financial decisions to ensure high value care across the continuum. This new approach has been employed across the country to help health care organizations reduce health care spending. This article explains what it is, why it works, and how the reader can successfully deploy it across the health care spectrum to achieve better clinical outcomes, alleviate waste, and reduce unnecessary health care spending.