Physician-Directed Reinvestment: A Novel Cost-Savings Framework for Hospital Systems That Leverages Frontline...

Costs of healthcare delivery continue to rise; however, existing cost-savings programs are often top-down measures driven by external entities. These can pose considerable administrative burden on physicians, thereby discouraging longitudinal commitment. This study investigates a novel bottom-up physician-directed Cost-Savings Reinvestment Program (CSRP), which empowers frontline physicians to create high-value care initiatives, with a portion of the achieved savings reinvested in initiatives of their choosing.

This study analyzed our institutional CSRP initiative between 2017 and 2023. A retrospective analysis on a prospectively maintained database was performed. Outcomes of interest included cost savings from proposal implementation compared with standard of care in that clinical area, return on investment of the program calculated using overhead costs, and physician engagement.

Between 2017 and 2023, 128 CSRP proposals were received, of which 70 (55%) were accepted. Of these, 56 (80%) were successfully completed, resulting in disbursement of funds to physicians for reinvestment. In total, 72 faculty contributed to the 70 accepted proposals, with multidisciplinary collaboration and participation rising significantly each year. Since implementation, the CSRP program resulted in $34 457 130 in validated savings, which represented a 13-fold return on investment. Reinvested funds were used to support clinical research, educational efforts, and capital purchases.

Across the first 6 years of program implementation, the CSRP has generated sustained cost savings for a large healthcare system that have exceeded target metrics, while also engaging a growing, increasingly diverse physician participant base. As such, the CSRP represents an effective new paradigm for encouraging value-based care by leveraging frontline physicians.