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UC Health initiative cuts costs, improves quality

A University of California initiative to reduce costs and improve quality across UC’s five academic medical centers has saved more than $70 million in its first year.

UC Health’s Leveraging Scale for Value initiative, launched in 2014, built momentum in its first year and continues to ramp up its efforts. The program aims to save at least $150 million a year for the next five years with UC medical centers collaborating to increase efficiencies in supply chain, revenue cycle, clinical laboratories and information technology.

“We are taking advantage of the scale of UC medical centers,” said Dr. John Stobo, UC Health executive vice president. “These collaborations are not only reducing costs but also inspiring better care and new ways to work together that will improve health.”

In the rapidly changing and complex era of health reform, hospitals face pressure to be more efficient. UC Health undertook the cost-saving initiative as projections showed that, without action, UC medical center expenses could exceed revenues as soon as 2017. The initiative is helping enable UC’s self-supporting $8.6 billion clinical enterprise to continue to provide educational support for UC’s medical and other health professional schools, fulfill its public service mission, and maintain quality in a competitive health care market.

The cost-saving changes have started small but are adding up at UC’s five medical centers — Davis, Irvine, Los Angeles, San Diego and San Francisco.

In supply chain, a UC Irvine group working on the procurement of blood shared best practices on its blood utilization efforts. The practices were adopted by other UC medical centers and resulted in more than $2 million in savings for blood products in fiscal 2015.

At UC Davis, the burn intensive care unit and procurement teams collaborated to improve how they utilized and stocked supplies. Nurses visited the distribution supplier and made suggestions to realign the supply cart so that items would be easier to find, enabling them to treat more burn patients. They also added price labels on linen carts, which raised awareness and reduced costs as workers have used linens more efficiently. Next steps include implementing similar improvements across UC Davis and expanding efforts to other UC medical centers.

“They’re little things. They create momentum. Everybody is a change agent. They become believers,” said Pat Knight, UC Health chief procurement officer.

UC Health supply chain and clinical lab efforts generated value of more than $50 million in fiscal 2015. In the next year, efforts will continue to focus on improving costs as well as accelerating collaborations and increasing engagement with clinicians, Knight said.

“Linking quality and supply chain is the essence of Leveraging Scale for Value,” Knight said. “We want to give patients the most complete and excellent care with the best outcomes.”

Revenue cycle efforts, chaired by UCLA Health Chief Financial Officer Paul Staton, generated value of more than $20 million in fiscal 2015 and are projected to expand in 2016. A number of targeted process improvements have been implemented at each medical center to enhance operational performance such as tracking progress of accounts and monitoring backlogs.

Information technology efforts, which saved $1.7 million in fiscal 2015, are focused on lowering the curve — lowering the costs of providing services — and bending the curve — working together on future investments of technology to transform health care, said UC Chief Information Officer Tom Andriola.

For example, UC Health is consolidating and regionally organizing its data centers at two sites that will serve all five UC medical centers, one in the north and one in the south (San Diego Supercomputer Center at UC San Diego).

Andriola and medical center colleagues also are seeking to leverage UC’s data to advance health, including through precision medicine, which uses data to customize health care and tailor it to individual needs. In a spinoff effort, UC Health is planning a clinical data warehouse with more than 13 million UC patient records to support research and increase quality and efficiency.

“Even though we’re technology people, we really are very tied to the mission of patient care,” Andriola said. “We’re trying to think of our data as an asset. How do we organize it so we have the next breakthrough in breast cancer or lower the cost of managing a chronic disease?”

Such collaborations could have a profound impact, harnessing the power of “big data” to lead to faster and more effective cures for patients worldwide.

With five UC medical centers, “each has something to learn and something to teach,” said Atul Butte, who joined UC in April to lead the new UCSF Institute for Computational Health Sciences and serve as executive director of clinical informatics for UC Health. “We have an opportunity to do something others can’t do.”

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