Mission Health System and Cost Management: If You Can't Measure It, You Can't Improve It

"For a field in which high cost is an overarching problem, the absence of accurate cost information in health care is nothing short of astounding."  

The quote from a recent issue of the Harvard Business Review resonated with leaders at Mission Health System, a five hospital system based in Asheville, North Carolina. And, they decided to take action.

"Challenges relative to volume and changes in reimbursement are requiring us to spend a lot of time and energy on cost management, and we have put a number of cost reduction initiatives in motion," says Damian Chipriano, senior financial analyst, decision support. "It is critical that we not only identify opportunities, but implement them."

At Mission Health, a number of teams have been established to put initiatives in place that have a positive impact on both clinical and financial outcomes. One team, for example, suggested that a behavioral health clinician be added to the adolescent mental health unit, with the premise that the floating clinician would be able to forge a closer relationship with physicians. The change would then ultimately result in a better experience for patients and a cost savings achieved through reduced length of stay and reduced readmissions. 

The leaders realized that they couldn't just assume the initiative was having the desired impact.  The health system is leveraging StrataJazz™, a decision support and cost accounting system from Strata Decision Technology, to quantify the impact of these changes. 

"We need to understand the financial impact of each and every change made. If you can't measure it, you can't improve it," Chipriano says. "StrataJazz makes this possible."

They were able to confirm that the addition of a behavioral health clinician resulted in reduced length-of-stay without negatively impacting readmission rates. Also, through the data analysis, leaders verified that the pilot program produced a reduction in direct cost per case of approximately $800.

StrataJazz also streamlined the financial reporting process itself, according to Chipriano.

"We just start pulling in the data elements and it populates in real-time so we can immediately see if the report is what we want and need. We don't have to go through the whole design process and then discover what is wrong," he says.

The web-based system also makes it easy to share valuable knowledge through the organization. Instead of producing reports and then e-mailing attachments to various managers, StrataJazz places the reports in a management dashboard so leaders can access them whenever needed. 

"We've streamlined our whole cost accounting process. As a result, we are seeing a positive impact on our bottom-line, both financially and clinically," Chipriano says.