Reducing health care delivery costs using clinical paths: a case study on improving hospital profitability

The process of merging and benchmarking clinical and financial data is pivotal to the development of appropriate clinical pathways. Bristol Regional Medical Center (BRMC), facing the challenge of managed care organizations (MCOs), instituted this process and achieved significant cost savings, largely because of the working partnership between the administration and its medical staff. In DRG 89, Simple Pneumonia and Pleurisy, Age Greater than 17 with CC, data adjusted for severity of illness and cost of living were furnished to BRMC by HCIA Inc. Major benchmark or "best practice" variations were incorporated into new clinical pathways, leading to decreased resource use, no compromise in the quality of care, and a beneficial halo effect on other unrelated DRGs.