Outcomes-Based Standardization: A New Approach to An Old Problem

Abstract

The COVID-19 pandemic has significantly strained care delivery, reduced available resources, and further destabilized health care finances. As health care organizations emerge from a pandemic that has worsened uncontrolled health care spending, while greatly reducing patient volumes and revenue, reactive cost cutting with little regard for the people at the end of those decisions quickly emerged as the standard approach. Historically, limiting cost decisions to product selection was a common, yet minimally effective, strategy for controlling health care spending. In the post-COVID health care environment, where clinical and financial challenges are greater than ever, a new approach to reducing health care spending offers promise. Outcomes-based standardization is an approach that begins with the end in mind, incorporating lean concepts to alleviate redundant or ineffective products and practice, while prioritizing value added activities to catalyze the greatest reduction of harm, time, and money spent. Outcomes-based standardization is a framework for change that balances clinical and financial decisions to ensure high value care across the continuum. This new approach has been employed across the country to help health care organizations reduce health care spending. This article explains what it is, why it works, and how the reader can successfully deploy it across the health care spectrum to achieve better clinical outcomes, alleviate waste, and reduce unnecessary health care spending.

Key Points.

• •The COVID-19 pandemic has significantly strained care delivery, reduced available resources, and further destabilized health care finances.
• •Old approaches to reducing waste and costs are no longer effective.
• •Outcomes-based standardization (OBS) balances clinical and financial decisions to ensure high value care.
• •OBS has resulted in significant clinical and financial gains in health care organizations across the country.
• •OBS can be deployed across the health care spectrum to achieve better clinical outcomes, alleviate waste, and reduce unnecessary health care spending.

The COVID-19 pandemic led to economic and employment disruptions that continue to negatively influence health care spending patterns and the resulting patient, clinical, and financial outcomes of US hospitals. US health care spending increased to $4.1 trillion in 2020, a 9.7% increase from 2019.¹ The COVID-19 pandemic was a primary contributor to this accelerated spending, catalyzing a 36% increase in federal expenditures in 1 year.¹ This uncontrolled spending continued into 2021, when the Omicron variant further destabilized health care spending, as US hospitals abruptly suspended elective surgeries, a major source of revenue.

In 2022, even as COVID cases trend down, the pandemic’s effect on health care organizations across the country persists. Health care spending remains uncontrolled, especially as traditionally stable revenue sources diminish. The patients who present in 2022 are often sicker, more complex, and are hospitalized longer than in the pre-pandemic period. This is the result of delayed routine and preventive care during the pandemic. Many patients avoid hospitalization, instead seeking care in outpatient settings or emergency departments, further diminishing hospital revenue and wasting costly health care resources. Supply chain disruptions and inflation further challenge the concept of cost-conscious care.

Staffing shortages in US health care facilities were greatly affected by the pandemic. There were approximately 258,768 cases of COVID-19 infection in health care workers in 2020, according to a study by National Nurses United.²

More than 1700 health care workers died. At least 213 of these were registered nurses, further impacting a service profession impacted by decades of shortages.² Many health care workers remain ill with COVID long haul syndrome, making full-time work in the health care industry challenging. One study by McKinsey & Company reported that as many as 32% of nurses are considering or have already left the profession.³ The health care industry has responded by filling staffing gaps with agency or transient staff, which has driven labor costs to unprecedented numbers, while simultaneously reducing the overall quality of care, potentially undoing decades of work to reduce avoidable patient harm and costly hospital-acquired conditions.

Many US health care organizations have responded to this financial instability with less collaborative decision-making, coupled with reactive cost-cutting. Specialist services such as those normally focused on prevention of avoidable harm and hospital-acquired conditions were reduced or halted during COVID and remain unavailable today. Clinical practice is also trending toward non–evidence-based care and unproven products and interventions as a rapid cost-cutting measure. Even financial support for education and training opportunities intended to ensure current, relevant, and evidence-based care have been halted. Conversely, these reactive measures have threatened the very outcome they were intended to promote, high quality health care.

An Old Problem

Hospital-acquired pressure injuries (HAPI) affect 2.5 million Americans and cost the US health care system $26.8 billion.⁴ Pressure injuries account for 25% of all wasteful spending.^{1 , 4} Pressure injury-related wasteful spending is associated with 1 of 3 causes: the cost of treatment, litigation, and reimbursement penalties. The average cost to treat 1 pressure injury can be as much as $150,000.⁴ Pressure injuries are the number 1 medical malpractice claim, with many cases settling for more than a million each. Up to 6% of a hospital’s reimbursement is directly or indirectly associated with pressure injuries, with penalties for poor performance reaching multiple millions per facility in 2020.^{4 , 5}

Prior to COVID, the average pressure injury incidence was 2% to 20% nationally, despite comprehensive prevention programs.⁴ The numbers and complexity of patients cared for during the pandemic quickly pushed pressure injury rates upwards toward 90%.⁵ Reasons for the dramatic increase in pressure injury incidence, cited in the literature, were unsafe staffing levels, omission of common safety practices, disregard for proven preventive practices, and the absolution from normal legal and regulatory value-based penalties.^{1 , 4 , 5}

The Old Approach

One percent of patients, the 6.7 million patients with wounds, persistently account for more than 20% of health care expenses.^{6 , 7} Additionally, hospital supply chain costs represent nearly half of a health care system’s operating expenses, and this number continues to rise. A common, yet consistently unsuccessful, approach to controlling health care costs among this population is product standardization.

Standardization is a process often overseen by a value analysis team who chooses health care products and services. Historically, standardization was a collaborative approach between value analysis and clinical stakeholders. Unfortunately, the pandemic has catalyzed the need to make big cuts fast, in the absence of valuable clinical insights. This cookie-cutter approach to product selection and standardization, with a singular goal of reducing product spend often negates the needs of the end users—the patients and health care providers caring for those patients.

A New Approach

A continued rise in the economic, clinical, and social impact of wounds warrants a more structured approach and proportionate investment in prevention, advanced wound care, education, best practice sharing, and related research. According to the literature, optimal supply chain management practices can reduce health care cost by 5% to 15%.⁸ A new and effective approach to ideal supply chain management practice is outcomes-based standardization (OBS).

Outcomes-based standardization is defined as an organized and concurrent approach to product and practice standardization that incorporates evidence-based products and care redesign and delivery to ensure value-based outcomes. Lean in health care is not new, but its practical application during outcomes-based standardization is key. Outcomes-based standardization can positively affect all 8 types of waste in health care, through application of reproducible best practices, regardless of setting, and therefore bridges the care continuum.

Outcomes-based standardization overlays the structure, process, and outcomes stages of the Donabedian model (Figure 1 ). The framework of outcomes-based standardization is applicable in all health care settings, regardless of the size of the organization or the magnitude of the problem. However, successful implementation is dependent on attention to effective management of each step. The 6 steps of OBS incorporate a subset of related activities that serve as benchmarks of success⁹ (Figure 2 ). These steps are explained within the context of Case 1.

Figure 1.

Outcomes-Based Standardization Model for Quality

Figure 2.

Outcomes-Based Standardization Detailed Process

Case 1 occurred in a 350-bed US academic medical center in the Southeast United States. More than 150 HAPI occurred in the prior year, making a third Magnet® redesignation unlikely without significant change. The newly hired wound program coordinator was charged with reducing hospital-acquired pressure injuries.

The first step in the OBS model for change involves an initial needs assessment, aimed at assessing the facility’s current state, defining the future state, identifying barriers to success, and establishing SMART goals to overcome barriers and realize the future state. For Case 1, the pre-OBS state of the organization included suboptimal culture with limited to no engagement of leadership, educators, and staff, minimal specialized wound nurses, and inaccurate and redundant HAPI data. Additional barriers to achieving the desired future state included siloed HAPI reduction practices as well as staffing challenges, catalyzed by the COVID pandemic. These staffing challenges included 80% turnover and short staffing, comprised primarily of novice nurses.

SMART goals were established. These goals were to reduce hospital-acquired pressure injuries by 20% in 6 months and 50% in 12 months. Program components were detailed in a comprehensive action plan incorporating process improvements, product and practice standardization, a launch and expansion plan, a communication plan, and key performance indicators of success.

Outcomes-based standardization is a data-driven approach, often requiring design and implementation of multiple targeted and lean-focused initiatives. During its second step, data are used as the roadmap for change and guides prioritization of the multiple facets of product and practice standardization. Each initiative is strategically designed to address an identified gap, focused on affecting the root cause, and often runs concurrent with other initiatives.

Although fishbone diagrams were used for Case 1, other organizations were managed with formal brainstorming sessions attended by all relevant stakeholders. In Case 1, the root cause of pressure injury staging and reporting errors was knowledge gaps resulting from COVID-related turnover and transient staff. The intervention designed to address this barrier was 2-fold. Live-virtual pressure injury staging and differentiation education and reengineering the HAPI data collection process to include visual validation of all pressure injuries by a certified wound care nurse and limiting medical device related pressure injury (MDRPI) documentation options to 1 of 2 appropriate categories, alleviating the risk of double reporting.

The root cause of high HAPI rates was high turnover, short staffing, and a high percentage of novice nurses. The intervention designed to address this root cause was multifaceted and focused on a combination of product and practice standardization. The product formulary was evaluated, and duplicate or outdated products removed, resulting in a 85% SKU reduction. The remaining 7 evidence-based products were incorporated into an intentional pressure injury prevention bundle designed for use across the full patient and care continuum. The bundle was incorporated into a wall-mounted poster with QR code access to on-demand general pressure injury prevention education, as well as short training videos for each included product.

Step 3 in the OBS model for change includes a phased education plan aimed at leveling prerequisite knowledge, building new knowledge, and ensuring competency across all stakeholders. In Case 1, education was provided in 3 phases. Phase 1 was an awareness campaign focused on making the connection between pressure injuries and patient harm, educating staff and leadership on the patient, clinical, and financial cost of pressure injuries, and highlighting available resources for preventing pressure injuries. Phase 2 included live–virtual education on pressure injury staging, differentiation, and documentation. A live–virtual format was used to minimize COVID-related risks to staff, while affording system-wide attendance. After the initial launch of the program, customized education was designed to address new opportunities revealed through negative trends in the data. This sustainability component of education focused on unit- and population-specific educational offerings, as well as bedside coaching.

In step 4 of the OBS model for change, the defined program is implemented and continued for the predetermined duration. For Case 1, the pressure injury prevention program was launched on 4 high incidence units in April 2020 and expanded to the 8 remaining units in June of 2020. Program implementation was supported by weekly unit rounds to surveil staff compliance to the established care bundle. Bedside coaching was provided during unit rounds to address care gaps, remedy inappropriate use of products, and encourage use of the wall-mounted care bundle and real-time educational support tools.

Step 5 of the OBS model for change involves tracking and trending of data to identify actionable positive and negative trends. Positive trends trigger expansion of best practices to additional care areas, whereas negative trends trigger assessment of the root cause, adaptation of the intervention to address the root causes, and reassessment of outcomes at established intervals. In Case 1, HAPI reductions were achieved on 3 of 4 units, triggering expansion of the HAPI reduction program house-wide. For the unit where HAPI rates trended upward, a root cause analysis was completed, revealing gaps in compliance to the established bundle and limited knowledge of available HAPI resources.

The final step and likely the most important step is to disseminate the findings both internally and externally. This steps fosters continued communication of ongoing opportunities, a collaborative approach to finding solutions, and opportunities to celebrate success. This step also ensures that effective processes are communicated and serve as a framework for global change, innovation, and transformation of care delivery in the United States. With Case 1, progression towards established goals was presented to nursing and medical leadership monthly. SKU reduction cost savings allowed for access to products with the most evidence supporting efficacy for pressure injury prevention. HAPI reduction and cost avoidance was used as leverage for additional specialized wound care nurse resources, one focused exclusively on pressure injury prevention. The entire program catalyzed hope and increased leadership and staff engagement, as evidenced by development of a unit-based wound care resource nursing team and leadership deployment of the nursing resource to address new opportunities, such as infections and falls.

Following implementation of the OBS model for change, Case 1 achieved a 48% reduction in HAPI in 6 months and a total HAPI reduction of 76.3% in 12 months. Stage 3 and 4 pressure injuries were reduced to zero. Reportable pressure injuries were reduced by 50% in 12 months. Case 1 reported a savings of 1.4 million dollars in 12 months, associated with HAPI reduction cost avoidance, product utilization reduction and spend, and length of stay days avoided. The program’s success was ultimately presented at a national conference, offering wide dissemination of best practices as a roadmap for change to other health care organizations.

Case-Based Proof of Concept

This strategic attention and active collaboration from a broad range of stakeholders has demonstrated a positive impact on outcomes and costs in healthcare organizations across the country. It is important to note that positive clinical and financial outcomes were achieved regardless of the facility size, current state of practice, limited clinical resources, and even as the pandemic presented unprecedented challenges. The success achieved by the organizations is directly related to consistent application of outcomes-based standardization as the framework for change. This process for change is a strategy for achieving Total Value™, a holistic approach to reducing costs.

Case 2 is a 300-bed Magnet-designated academic medical center in the SE. The charge for this organization was to reduce hospital-acquired pressure injuries as a benchmark of high quality care. During a 12-month period, outcomes-based standardization was used to guide product selection, practice improvement, and cost savings. Practice support included Consistency in Care to surveil practice, protocol development, custom guides, as well as clinical and product education. These efforts resulted in a 42% reduction in hospital-acquired pressure injuries (HAPIs), 196 unnecessary length of stay (LOS) stays avoided, and $1,192,297 in total treatment and hospitalization costs avoided. This organization is on target for another 35.9% reduction in HAPIs year to date.

Case 3 is a 500-bed academic medical center in the NE. The charge for this organization was to reduce hospital-acquired pressure injuries. During a 7-month period, the facility standardized products and practice house-wide, based on current evidence-based best practice. Total Value support was provided by the prime vendor partner, which included Consistency in Care to surveil practice, data driven interventions, lean wound care carts, customized clinical decision-making tools, clinical education and product training. In this facility, outcomes-based standardization resulted in a 63.2% reduction in HAPIs, $438,000 in treatment costs avoided, and 84 unnecessary LOS stays avoided. A return on the investment in product spend was achieved in 3 months.

Case 4 is a 1100 bed Magnet-designated academic medical center in the NE. The charge for this organization was to reduce hospital-acquired pressure injuries for Magnet redesignation and to reduce costs. During a 5 month period, in the height of the COVID pandemic, outcomes-based standardization was used as the framework for a housewide pressure injury prevention program. Total Value support provided by the prime vendor partner included unit rounds weekly with bedside coaching, on-demand education, and development of a wound treatment associate program. The program resulted in a 51.6% reduction in hospital-acquired pressure injuries, 4 units sustaining zero HAPIs, zero stage 4 pressure injuries, and an 85% reduction in stage 3. The organization realized a savings of $1,371,321 in avoided treatment costs.

Case 5 is a 300 bed Magnet-designated hospital in the NE, charged with reducing pressure injuries as a prerequisite to Magnet redesignation. During a 10-month period during the COVID pandemic, a pressure injury program was designed and implemented based on a standardized formulary of evidence-based products and practices. Total Value support from the prime vendor included data driven-interventions, SKU reduction, creation of a customized care bundle, Consistency in Care to surveil practice, focused live-virtual, virtual, and on-demand micro-education addressing all identified gaps. Although reductions were achieved housewide, the most notable achievements occurred in the highest incidence unit. The critical care unit achieved an 82.5% reduction in HAPIs, avoided 264 unnecessary LOS days, reduced reportable pressure injuries from 11 to 2, and achieved a total cost savings of $1,268,815, after product and staffing cost.

Lessons Learned

Even when implemented as intended, there will be opportunities for improvement, barriers to overcome, and lessons learned.

Lesson 1

There is no one size fits all solution to harm reduction. OBS is a framework for change, but the details of and movement through each step will look different. Be courageous and intentional in seeking the right solutions to meet each organization’s needs.

Lesson 2

Although small gains were made in organizations without strong nursing leadership engagement, informing and engaging the nursing leadership catalyzed faster progression to the goal, improved compliance, and sustained best practices and positive outcomes over time.

Lesson 3

Just culture is an essential component of outcomes-based standardization. Just culture prioritizes safety and allows nurses to report patient harm and near misses without fear of retribution. The success of OBS requires accurate reporting of patient harm so that the data used to guide decision-making accurately represents the magnitude of the problem and the impact of change.

Lesson 4

Standardization of evidence-based products and practice must occur concurrently. Although product standardization alone may reduce waste and cost, care must also be redesigned to ensure consistent evidence-based practice. This holistic approach to standardization serves to simplify and streamline decision-making to reduce the risk of variation and errors and brands best practice as the expected standard of care. Branding best practice sustains success.

Translation Across Health Care

Although the cases presented represent the wound care sector, the simplicity and practicality of outcomes-based standardization easily translates to other areas of health care. Beyond its financial benefits, outcomes-based standardization is associated with benefits for the patient, the health care worker, and the health care organization alike. For patients, outcomes-based standardization results in a reduction of avoidable harm, such as hospital-acquired pressure injuries or surgical site infections. Outcomes-based standardization affords health care workers a simplified product formulary with evidence-based advanced technologies and streamlines clinical practice and workflow to reduce the care variations and unnecessary, non–value-added activities that lead to errors and staff burnout. Outcomes-based standardization has resulted in millions of dollars in cost avoidance associated with treatment, litigation, reimbursement, and reputation penalties.

Biography

Rhonda Sullivan, DNP, PhD, MSN, MBA, CWON, LNCC, NE-BC, CSPHA, CLSSBB, is clinical director, Wound Care Marketing, at Molnlycke Healthcare in Peachtree Corners, Georgia, executive director at iWOC Nursing Foundation and owner of Legal Nurse Partners, both in Villa Rica, Georgia. She can be reached at iwocnurse@gmail.com.