Tag Archives: waste

International best practice benchmarks identify potential avoidable inpatient admissions

Milliman’s International Best Practice Benchmarks help quantify potentially avoidable admissions and bed-days within a healthcare system to identify potential value opportunities. The benchmarks can be applied to any healthcare system (public or private) where stakeholders are seeking opportunities to reduce waste and improve efficiencies. Milliman’s Joanne Buckle and Tanya Hayward provide more perspective in this presentation.

The case for well-researched medical guidelines

This is excerpted from the recent paper, “How hospitals can arm themselves in the war on waste,” by Helen Blumen and Tiffanie Lenderman:

With increased scrutiny by CMS contractors of hospital admission and treatment documentation, scientifically based medical guidelines can be a valuable tool for supporting the physician decision-making process and providing evidence of appropriate care. Whether in reviewing retroactive cases or current billings, contractors will be looking at physician documentation in making their determinations. Supporting records from auxiliary caregivers will count for very little if the physician has not made the right decision and properly recorded it.

As an example, a physician admitted a patient for heart failure, noting respiratory compromise, abnormal renal function ( BUN 27 and creatine 2.0), and a blood oxygen saturation level of 96 percent with the patient on low-flow oxygen at 2L/min. The Milliman Care Guidelines® indications for admission for heart failure include documenting worsening renal function and a blood oxygen saturation level below 90. In this instance, the case manager using the Care Guidelines would provide the physician with the following prompts: “Please document the patient’s renal function prior to admission” and “Please indicate in your notes the patient’s O2 saturation on room air.” With these prompts, the physician taking care of this patient could have chosen to admit the patient for observation and then determine if the patient meets the criteria for admission for heart failure.

Well-researched medical guidelines can help hospitals improve and demonstrate best practices in the face of CMS scrutiny. They can be used to:

  • Provide supporting evidence in case of appeal
  • Help determine appropriateness for admission
  • Prompt physicians to provide documentation to the clinical record

The War on Waste

The United States spends upwards of $600 billion each year on wasteful healthcare, and as the biggest hospital payor in the country, the federal government has an interest in minimizing this waste. For almost 20 years, the Centers for Medicare & Medicaid Services (CMS) has been developing various auditing capabilities. When the recovery audit contractor program was made permanent in August 2009, it became just the latest example of the War on Waste that has been mustering for many years and has now reached maturity. What can physician executives do to arm themselves for the War on Waste? Scientifically based guidelines and documentation of best practices will play an important role and can help ensure more efficient and quality care even as the War on Waste challenges the way hospitals provide care.

Find out more—read the recent article in the Physician Executive Journal.

Forgotten waste?

We’ve blogged before about the role of waste in the U.S. healthcare system ($700 billion and counting). A new article on the Atlantic blog offers a useful visual representation of the sources of said waste.

A circle of waste

Circle of Waste

Source: Howard, Philip K. “The case for a cost containment commission.” The Atlantic, Nov. 11, 2009. Note that, due to overlap, the sum of these percentages exceeds 100%.

This waste will continue to be a concern, especially as long as health costs continue to increase at their recent rate.

Medmal: Where the money goes

Based on a Milliman analysis of more than 30 years of medical professional liability (MPL) insurance industry data, as reported to state insurance departments in annual financial statements, the distribution of how premiums are spent in the current tort system of adjudicating claims breaks down as follows:

  • 27% is for the insurance industry’s claims management costs, which include:
    • 22% for defense counsel, expert witnesses, litigation, technology fees, and other court costs
    • 5% for insurance company oversight of claims
  • 15% is spent on insurance company overhead and expenses (e.g., agent commissions, state premium taxes, etc.)
  • 19% pays for the claimant’s (plaintiff’s) attorney
  • That leaves 39% for final disbursement to the claimant when the entire adjudication process has finally reached its conclusion three and a half to five or more years after the original incident


See the new paper, “Retooling medical professional liability,” for more information.