Rising implant costs continue to impact hospitals across the nation. As technology expands, physicians are given new opportunities to try the most advanced implantable devices manufacturers have to offer. This was no different at Memorial Hermann Southwest Hospital in Houston, Texas, USA. The hospital has one of the largest cardiology programs in Houston offering complete heart and vascular services, including cardiac catheterization.
To help address the increasing cost of implantables in the catheterization lab, a cross-functional Six Sigma team was assembled and charged with learning the business and making improvements. The business case was clear. Appropriately decreasing high implantable cost aligned with one of the organization’s four key strategies – achieving and maintaining operational excellence.
Team Work: Understanding the Business
In the cath lab, it was clear that the main drivers of implant cost were defibrillators and pacemakers. This quickly became the team’s main focus. The team included a Black Belt, two Green Belts, a project Sponsor, executive Champion and physician Champion. Together the team began to take a look at defibrillator and pacemaker utilization. On a case-by-case basis, the team was able to collect data in the following areas:
- Type of implant used
- Implant description
- Implant cost
To gain full understanding of the business, the team was able to collect data during the most recent three-month period. The data was then used to analyze utilization by physician and by manufacturer. Implant utilization and cost by physician, implant cost by manufacturer, and implant type (biventricular versus dual chamber versus single chamber) were used to benchmark against other facilities within the organization. The team now had a clear picture of implant utilization at the hospital. The average implant cost per case for both defibrillators and pacemakers exceeded the organization’s benchmark. The benchmark was set as the upper specification limit to determine the process capability. There also appeared to be a higher utilization of biventricular and dual chamber devices compared to the national benchmark provided by the Advisory Board Company.
Call to Action: Report to Review Committee
With strong physician and executive Champion leadership, the team was given the opportunity to share what they had learned in front of a larger audience – the Cath Lab Review Committee. This committee was comprised of hospital cardiologists responsible for overseeing program development. The information was well received and productive conversations led the group to making implant utilization a key focus. Many physicians were excited about the data analysis tools used to present the information in a new way.
The data analysis of defibrillator and pacemaker utilization and the ongoing conversations with the cardiologists led to the following conclusions:
- Significant variation in implant utilization existed among cardiologists.
- Manufacturer presence during procedures heavily impacted implant selection.
- Cardiologists were unaware of the cost of the device used in the case.
- No specific control or attention was paid to implant pricing and utilization by the cardiologists.
With the necessary information in hand and the primary factors identified, the Cath Lab Review Committee took immediate action.
Solutions: Accountability System and Structure
It did not take long to create a shared need with this group of cardiologists. It was hard to refute the data. Members of the committee understood the issue and realized the importance of appropriately managing soaring implant costs. The group took it upon themselves to own the issue and implement a physician-owned accountability system and structure.
The medical director of the cath lab and the chair of the Cath Lab Review Committee developed two subcommittees for implant utilization and assigned leadership – defibrillator/pacemaker subcommittee and stent utilization subcommittee. Both subcommittees meet monthly and report back to the parent committee.
The defibrillator/pacemaker subcommittee and the Six Sigma team identified tactics to help positively impact implant cost per case. The first tactic was aimed at educating cardiologists on implant cost. A physician pocket card was developed with a list of all devices by manufacturer in order of price. Like devices (biventricular, dual chamber and single chamber) also were grouped together. Defibrillators were on one side of the card and pacemakers on the other. The cardiologists began using this tool immediately and it began to change the conversations between manufacturer and physician. Cardiologists were now more engaged in implant selection and manufacturers were required to bring in more than just “high end” devices. A second tactic was geared toward influencing contract pricing. With strong physician influence and leadership, manufacturers were pressured to lower contract prices between 10 and 15 percent. Not wanting to lose business, each of the four main manufacturers agreed to renegotiate their contracts.
Conclusion: Producing Benchmark Results
The project to improve utilization of high-cost implantables in the cath lab at Memorial Hermann Southwest Hospital produced significant outcomes. The project began in May 2005 and results were monitored beginning in July 2005. With the right solutions in place, the hospital has experienced a $744,782 hard cost savings through March 2006. Annualized, it represents hard cost savings of $993,043. In March 2006, average defibrillator implant cost per case decreased by $4,420 leading to a 54 percent reduction in defects. This surpassed the project goal of 50 percent defect reduction compared to the organization’s benchmark. During the same time period, average pacemaker implant cost per case decreased by $1,146 leading to a 44 percent reduction in defects, just shy of the project goal.
There are several keys to the success of this project. First and foremost, the physician support was invaluable. The group of cardiologists was motivated to make change. Second, strong project Sponsor and executive Champion involvement was critical. They were essential in working with the physicians to help remove barriers. Third, the team’s perseverance against initial physician resistance and doubt paid off. And perhaps most importantly, a solid control plan was initiated through development of a physician-owned accountability system and structure. This will ensure that the project remains successful.