All Content

Utah Health Sciences Center Realizes Significant Savings from Cost-Analysis Tool


Most healthcare systems don’t know or understand their cost of care at the unit that matters, i.e., the actual cost of care for an individual patient. Knowing this, University of Utah Health Sciences Center (UHSC) sought to develop methodologies using clinical data that would enable it to determine cost of care. Ultimately, a team led by systems, data, and analytics personnel, and including hospitalists, created an analytics framework known as value driven outcomes (VDO) using an agile methodology. Evaluation consisted of measurement against project objectives, including implementation timeliness, system performance, completeness, accuracy, extensibility, adoption, satisfaction, and the ability to support value improvement.1

Dr. Pendleton

Dr. Pendleton

“The initial results of employing the cost-savings tool have been exciting. For example, a 30% reduction in the cost of an orthopedic joint replacement—an inpatient hospital procedure—was realized,” says Robert C. Pendleton, MD, chief medical quality officer and professor of medicine at the University of Utah in Salt Lake City.

In another instance, hospitalists at UHSC led an initiative to reduce the use of unnecessary laboratory tests. That resulted in $400,000 in cost savings in the first year.

Another UHSC hospitalist used data to reduce unnecessary telemetry utilization by 60% on the hospitalist service.

“The accumulative impact of these initiatives, among others, will be a savings of millions of dollars annually by making process changes,” says Dr. Pendleton, a hospitalist who served on the executive steering committee that designed the web-based tool. “Our early experience shows that there is a lot of waste in the healthcare system.”

Along with the costing tool, quality and outcome measures were integrated so that the actual value of care (best outcomes at the lowest cost) could be assessed and incrementally improved.

Widespread Use?

Dr. Pendleton believes the tool could become popular among hospitalists, explaining that the field is known as the “leading system thinkers in healthcare.”

“By their nature, if you give them meaningful data and they can compare themselves to their peers, they are highly engaged to determine where waste in their hospitals exists and to lead improvement efforts,” he says.

UHSC is currently in the process of rolling out the VDO tool systemwide to its 1,200 faculty members. The rollout will take six to 12 months. In the next year, it’s also working to define and integrate outcome measures for the top 50 medical conditions it treats, which will allow it to robustly assess the value of care delivery.

“Success will equally be to increase quality without an increase in cost,” he says.

What’s more, Dr. Pendleton says efforts are in the works to make the self-intuitive system available to institutions nationwide. For example, the center is working to address technical complexities resulting from the use of multiple electronic health record vendors.

“The goal is to make it usable in every environment so we can support other organizations in the most effective ways,” he says.

Although the tool is very easy to use, stakeholders are providing feedback that allows for continuous improvements in how data are presented.

“Anyone with basic computer skills and the ability to interpret bar charts and basic graphs can use it,” Dr. Pendleton says. The center also offers a 15-minute, confidential, training module and a one-hour, one-on-one training session with an analyst. TH

Karen Appold is a freelance author in Pennsylvania.


  1. Kawamoto K, Martin CJ, Williams K, et al. Value driven outcomes (VDO): a pragmatic, modular, and extensible software framework for understanding and improving health care costs and outcomes. J Am Med Inform Assoc. 2015;22(1):223-235.

Next Article:

   Comments ()