Page 21 - Modern Healthcare (January 2020)

“All of the talk and all of the rhetoric that is going on in Washington … we are just
moving the bag of money around and no one is striking (the money) inside that bag,”
said Helen Macfie, chief transformation officer at MemorialCare who is also leading the
IHI’s focus on waste. “Who best to help with that than those out here in the real world
doing the real work? We can wait for someone to try to legislate it or pay us less, in which
case that results in unfortunate side effects … or we can take these savings and return the
money to society, to people.”
Dr. James Leo, chief medical officer of MemorialCare and another leader of the IHI’s
effort, said the alliance wanted to establish a bold goal to elicit attention and hopefully
action from healthcare organizations.
“It requires we think differently. We are not going to get there by doing things the way
we always have,” he said. “By the alliance choosing that as a goal, it would require trans-
formative work.”
To monitor progress, the group is going to track overall U.S.
healthcare spending. In 2018, $3.6 trillion was spent on health-
care, up 4.6% compared with the year earlier. Healthcare ac-
counts for 17.7% of the gross domestic product.
“We actually know about a year later how much we spend Opportunities for reducing waste
as a nation on healthcare. If we are successful at this, we are A recent JAMA study estimated annual savings based
on waste-reduction interventions for five areas. Here is
going to see that (GDP) for healthcare come down by half a the percentage of waste that could potentially be
trillion,” Leo said. eliminated for each of the areas.
“There is waste in the system and if we can take it out, the
prices can drop,” Macfie said. “Helping to solve that problem is Potential savings as % of estimated waste
what we can do.” Failure of care delivery 56.3%
Just getting started Failure of care coordination 48.9%
The IHI Leadership Alliance was formed in 2013 but it only Overtreatment or low-value care 28.3%
began its focus on waste about two years ago. The alliance is
intended to be a opportunity for healthcare organizations to Pricing failure 37.9%
come together and share ideas.
“It’s a member-driven network,” said Jill Duncan, IHI exec- Fraud and abuse 36.7%
utive director. The organizations determine the goals, and the
IHI acts more like a facilitator, she added. Note: Percentage is based upon the highest estimated range of
waste and savings.
Although the alliance is mostly made up of providers, Huma- Source: Waste in the US Health Care System: Estimated Costs
na and Scan Health Plan, a Medicare Advantage insurer based and Potential for Savings. JAMA, Vol. 322, No. 15
in California, are also members.
Macfie and Leo came up with the idea for the group to be-
gin addressing waste after hearing a talk from economist David
Cutler during one of the alliance’s biannual meetings
The group has since laid out seven primary and 15 secondary drivers of waste that
organizations can tackle. That involves a systemwide approach to reducing waste and
includes decreasing harm and safety events, actively soliciting staff and clinician ideas,
engaging leadership and redesigning care to achieve the triple aim.
A 53-page analysis, called Trillion Dollar Checkbook, lays out how addressing each of
the drivers can cut nearly $900 billion in waste per year. Macfie
and Leo were co-authors of the report.
THE TAKEAWAY Not everyone agrees with the report’s ranking of the causes of
waste in healthcare. Prices and administrative costs, which are
The IHI Leadership
Alliance is calling recognized among the biggest drivers of waste, are included
on healthcare but are “not focused on,” said Dr. Karen Joynt Maddox, an as-
organizations sistant professor of medicine at Washington University School
nationwide to try of Medicine in St. Louis. “Because this is a provider group, they
to reduce waste in the have the least control there, so that decision is understandable,
U.S. healthcare but those are obviously huge sources of waste.”
system by 50% over Maddox added that the alliance is also “incredibly optimis-
the next five years. tic” in its calculation about how much focusing on certain ar-
eas can reduce costs. She pointed to the estimated savings from

January 27, 2020 | Modern Healthcare 19