impact stories

Operational Efficiency and Continuous Improvement Program and Tool Saves $3 Million

September 16, 2022

This organization drove results and impact

Identified over $9 million in cost savings opportunities in both clinical and non-clinical areas

Implemented variation-based initiatives across service lines, for a cost savings of $3 million

Engaged C-suite executive sponsors to help drive culture shift and adoption of cost improvement


Organizations Lack Structure and Buy-In to Commit to Variation-Based Cost Savings Initiatives

Hospital leaders are facing many new and complex challenges, with evolving demands affecting both patient care and financial performance. As a result, many are seeking further opportunities to improve patient satisfaction, quality, safety, clinical variation and cost. To identify and execute on quality improvement and cost savings opportunities, organizations will need to effectively engage clinical, operational and finance leadership. However, developing the internal structure and leveraging the necessary data and analytics to identify and execute opportunities can be difficult for most organizations.

To continue to follow through on their mission to consistently improve patient safety and experience, this multi-site health system needed to stand up a program that would align leaders across areas and service lines. They partnered with Strata’s Advisory Services team and leveraged StrataJazz® Continuous Improvement to develop a necessary structure, shifting their culture and amplifying cost discipline and quality improvement.


Developed Organizational Structure to Engage Clinical, Operational and Finance Leaders

To improve quality and patient satisfaction, this health system formed an organizational structure to review cost improvement strategies and drive operational efficiency. Led by C-suite level executive sponsors, the program engaged a committee of Sr. VPs, the CNO, CQO, medical chairs and operational VPs. The program would enable two-way communication to track and report on results. After developing a charter, the organization identified key areas of focus, including staffing efficiency and utilization & clinical variation.

Eighteen months into developing the Operational Efficiency and Continuous Improvement committee, the organization could begin tracking key initiatives discovered through this review process. Levering StrataJazz Continuous Improvement and Productivity Reporting, they have discovered cost savings opportunities across their pharmacy, laboratory and orthopedic segments, with quality opportunities ranging from hospital acquired conditions to sepsis.


Saved $3 Million from Executing on Savings Opportunities

The organization has been able to use this detailed information from each department to identify over $9 million in qualified opportunities for cost savings in areas across its pharmacy, laboratory, and orthopedic and additional segments. In total, they have achieved just over $3 million in savings across two fiscal years using their planning, analytics and performance platform. In one example, the committee partnered with their pharmacy team to understand clinical indicators connected to patients who take KCentra. Using this information to recommend a more effective dose enabled a savings of $196,000 over the course of six months, with an estimated annual savings of around $240,000.

In another example, the pharmacy identified an opportunity to switch from the brand name Cubicin (a drug used to treat staph and skin infections) to its generic alternative. Within two months, they had fully converted to the generic drug; within nine months, they had achieved $1.2 million as a result. Now empowered with better data, the committee further explored the transition of IV Tylenol to oral tablets, realizing an annual savings of $300,000.