Thirty Cost Savings for the Medical Practice

As a medical practice administrator, it is critical to constantly investigate ways to improve value and reduce cost in the medical practice. The challenge is to do it in a way that does not compromise quality, outcomes, or service. Whether one is leading a hospital-based or independent medical practice, the challenge is the same. Value equals cost over quality. At Cleveland Clinic, we live our mission by providing better care of the sick, investigating their problems, and educating those who serve. We live the mantra of “Patients First” and welcome change, encourage innovation, and always look for ways to seek better, more efficient ways to achieve our goals. We achieve that innovation through teamwork, where we all share our knowledge to benefit our patients and caregivers with the goal of advancing our mission.

In the current healthcare landscape of care affordability, we must be excellent stewards of our resources.

In the current healthcare landscape of care affordability, we must be excellent stewards of our resources. We cannot assume that the current way of caring for patients will continue to work in the future, and we must investigate every service, program, and cost to determine whether it provides value to our patients.

As a multispecialty academic health system, we have phenomenal opportunities to explore our systems and practices, with over 6.6 million outpatient visits in 2015, 165,000 hospital admissions, and over 1.9 million unique patients to serve. Yet regardless of size or scope of the service, investigation of costs involves collaboration, teamwork, and problem solving with a “patients first” orientation.

Everyone was challenged with a system-wide goal of investigating all costs and reducing them by $498 million over a two-year period while improving outcomes and quality and working to ensure that “Every Life Deserves World Class Care.” The organization assembled eight teams, all chaired by physician champions, and explored all costs throughout the health system, including supplies, staff and benefits, energy, and anything else that made the list. All areas of the enterprise needed to be looked at from a fresh perspective

Parallel to this effort, several years ago, the system implemented a program called “My Two Cents” that asked all caregivers to submit their suggestions, ideas, and recommendations on ways to improve patient experience, quality and safety, employee engagement, and marketing/growth. This effort invited employees to be creative, innovative, and forward-thinking and provide fresh perspectives and insight into doing things differently, better, and more efficiently. The program has collected over 1000 ideas and has resulted in $7 million in savings.

Some ideas could be implemented easily, whereas others took much time, effort, and energy to address. Regardless of the idea, implementation required a team effort with effective communication and problem solving. Approaching the solutions with care affordability in mind, the ideas generated more ideas and ways to save money and create better value. Of the more than 1000 ideas that were chosen, this article lists 30 ideas that were implemented. The intent of the article is to challenge the reader to consider at least one of these ideas to consider in his or her practice, if that has not already been done, and explore additional ways to create solutions that can save money and improve value.

In addition, cost repositioning and care affordability was approached through creation of eight teams with a long-term, enterprise-wide effort in which every clinical and administrative employee assesses everything he or she does to provide service more effectively and efficiently. The eight teams are:

• Clinical Program and Asset Optimization: reviews clinical programs, assets, and services to optimize locations and capacity;

• Indirect Program and Asset Management: examines non-billable operational support, corporate shared services, administrative overhead;

• Non-Staff Workforce and Productivity: focuses on non–physician employees, including hiring patterns, productivity, span of control, pay/benefit policies;

• Staff Workforce and Productivity: investigates physician recruitment, practice, and retention;

• Stewardship: looks at managing system resources, discretionary spending, sustainability, and waste;

• Education: examines educational services including graduate medical education, continuing medical education (CME), and health sciences;

• Research: looks at performance of basic, translational, and clinical research; and

• Value-Based Care: assesses care paths, care coordination, contracting.

Through these eight teams and the My Two Cents Program, a small sample of ideas is shared for consideration:

1. Consider more electronic options. By eliminating sending employees’ communication or information via regular mail, send the information electronically. Cleveland Clinic no longer mails paper checks, W-2 forms, or open-enrollment packages to employees. All are available online. By not mailing employees paychecks, the total one-year savings was $640,000 (figuring 44,000 employees and 26 pay periods).

2. Standardize product use. The organization went from using five wound-cleansing products to one, with a cost savings of $10,000.

3. Default printers to double-sided printing. When sending a document to print, default printing to a double-sided option reduces paper costs by 50%.

4. Replace expensive markers with less expensive ones. We were using $3 brand-name markers to mark surgical patients’ body parts and throwing away the marker after use. By using a generic marker instead, at $1 each, the cost savings was $20,000 for 10,000 surgeries performed.

5. Eliminate exam-room phones. Many offices use iPhones or portable phones in their offices. Having an exam room phone is redundant and unnecessary; removing exam room phones can save over $1500 for six exam rooms.

6. Decrease overtime. Many offices do not flex staff when staff gets close to working more than 40 hours per week. Explore creative ways to prevent inappropriate use of overtime. Examples include scheduling staff for a 36-hour work week so that if extra hours are worked, they are not overtime. Another way is to reduce the use of what we call the 15-minute creep, by communicating with employees that they can’t work past their shift unless approved by management. This discourages employees who consistently punch out several minutes after their scheduled end of shift and get paid for time not approved.

7. Consolidate computer software resources. We found that we were using redundant technology and software. By eliminating one software, we saved $1 million.

8. Provide in-house computer training. Outside computer training can be expensive and adds up. By offering some desktop computer training in-house, we avoided $200,000 of outside vendor fees.

9. Reduce par levels kept on supply carts. By looking at clinical cart par levels, we were able to go from 700 to 330, items saving $69,000 annually.

10. Switch supply vendors. We were using alcohol pads from one vendor and found that we could switch to another vendor, get alcohol pads of comparable quality, and save $17,000.

11. Convert to unit-dose medication packaging. By converting to unit-dose packaging instead of using 28-g tubes, we reduced the amount of wasted product by $8000.

12. Consolidate courier services. By reevaluating schedules and pickup times, we were able to leverage the courier and save $35,000 in annual charges.

13. Default to E-prescribing option. By switching from paper scripts to electronic prescribing, we saved 1¢ per page, resulting in thousands of dollars in savings.

14. Eliminate desktop printers. In one building we eliminated individual office desktop printers and saved $12,000 in maintenance, toner, and electricity by moving to centralized printers.

15. Reduce lotion size. We were providing patients with 20-ounce bottles of lotion when they were normally only using 10 ounces. By switching to 10-ounce bottles, we saved money per unit and reduced amount of wasted product.

16. Restock and reuse supplies still sealed. It’s a cost-saving alternative to throwing away such supplies that normally were thrown away in a patient room.

17. Standardize Bivalirudin (blood thinner) concentration. When we standardized the concentration from 5 mg/mL to 1 mg/mL, the amount of medication wasted was reduced, saving about $200 per drug dispensed.

18. Replace foam cradle for patients’ arms at ambulatory surgery center. We reduced the price for each cradle from $6.19 to $2.57 by working with a vendor to settle on a comparable product. The result was over $10,000 in savings for 3000 surgeries.

19. Implement programs and incentives for healthy lifestyle choices for employees. These incentives included a tiered premium health plan, no-smoking policy, and chronic care programs. We reduced employee health costs by 50 percent.

20. Change sterile gloves. By switching the type of sterile glove used in one department, cost per box dropped by $78 to $20, for a savings of $5000.

21. Reprocess single-use devices. We use a third-party company to reprocess single-use devices, including arthroscopic shavers, blood pressure cuffs, catheter introducer sheaths, endoscopic trocars, and electrophysiology catheters and cables. This resulted in a 12-month savings of $3.3 million and 95,101 pounds of waste diverted!

22. Power off computer monitors at night. This provided an annual cost savings of $6100.

23. Deactivate telephone and fax lines no longer in use. Thousands of dollars can be saved this way.

24. Create a “Green Team” to reduce, reuse, and recycle waste. One site has saved over $15,000 annually by eliminating the use of one dumpster weekly.

25. Evaluate medication formulary approvals. By enlisting the support of physician committees and based on evidence-based medicine, we saved $750,000 on an oncology formulary.

26. Evaluate pagers and on-call schedules. One area reduced its on-call pagers from three to one, saving $8500 annually by eliminating on-call pay and monthly pager fees.

27. Create multifunctional devices. By combining printing, faxing, and scanning functions into one unit, thousands of dollars were saved.

28. Create an energy committee. In one location, the energy committee accounted for $100,000 of savings in projects in its first year by such steps as replacing light bulbs with more efficient bulbs, decreasing temperature settings, and turning off lights.

29. Remove rapid sequence intubation kits. By placing needed medication into crash code carts, annual savings resulted in $1200.

30. Evaluate alternate waste options. By using purple waste bags for recyclable surgical items, we reduced garbage bin fees and achieved $230,000 in annual cost savings.

Conclusion

The key takeaways are to:

• Engage with caregivers and professional staff to encourage them to submit their ideas;

• Encourage a culture of innovation and creativity;

• Encourage everyone to submit ideas, with the more the better;

• Explain to the idea submitter the reason why his or her idea was not considered;

• Thank everyone for submitting ideas;

• Let staff know when a cost-saving idea has been implemented; and

• Celebrate ideas that are implemented.

By embracing this collaborative approach, greater value can be provided to patients through cost reductions that do not compromise quality. It’s an approach that has worked for the Cleveland Clinic and will continue for years to come with a “Patients First” focus.