According to the CDC, approximately 30 million American adults suffer from chronic kidney disease (CKD) – a staggering 15 percent of the population. As the disease progresses to end-stage renal disease (ESRD), these patients will require kidney dialysis treatment. According to the United States Renal Data System, the average ESRD patient is admitted to the hospital nearly twice a year, averages a 1.7-day length of stay, and the readmission rate for patients is 34.6 percent. As the prevalence of CKD and ESRD continues to grow, the cost of inpatient dialysis treatment to hospitals also rises an estimated 3 to 6 percent annually.
Is there a solution to keep these dialysis-related costs at bay and identify opportunities to reduce them? The answer is a synergy of clinician engagement, data analysis, contract utilization and staff-ratio optimization. When combined, these four elements drive operational efficiency.
“Unless the organization engages clinicians by sharing pertinent data, maximizes its price negotiation ability through contract opportunities and identifies the correct staff-to-patient ratio, their inpatient dialysis costs will be extremely high,” said Akiva Faerber, senior principal, advisory solutions at Vizient. “That’s why it’s critical for the hospital to become more efficient in the operation of its dialysis program.”
Faerber noted that several member hospitals have followed these steps to improve operational efficiency, resulting in annual dialysis cost reductions from 5 to 15 percent.
Securing clinician alignment through detailed data
The first step to reducing dialysis costs is to align the clinician side and the supply side of the organization – no small task.
A materials manager might see the opportunity to save on a contract, but clinicians are primarily interested in getting their patients the best quality of treatment – and they fear that negotiating price could compromise patient care if their preferred product is replaced by a less-expensive option.
“Today, things have changed dramatically,” Faerber said. “There are more people on the supply side who have clinical backgrounds and can address these concerns by providing data to show patient care won’t be affected.”
Examples of analytical proof include:
- Maintaining or decreasing readmission rates of dialysis patients
- Movement of patients through the health care system while admitted
- Clinical trial data showing the alternative product’s reliability and performance
Equally important is leveraging the data to reduce costs. Faerber recommends that supply chain managers engage clinicians by asking them to define their quality indicators, such as number of treatments per week, resourcing to those treatments and add-on costs, like pharmaceuticals, lab workups and vaccines.
Negotiating the best price for dialysis supplies, technology, disposables, replacement fluids and pharmaceuticals starts with examination of the existing contracts in place. Some of these materials may already be on contract. For example, a hospital might be paying list price for a medication that stimulates red cell production. Simple examination might reveal that the medication is already on contract with the hospital’s pharmacy and could be purchased for a lesser amount.
Cost reduction opportunities can also be identified by undergoing an extensive assessment of the contracts involved to identify dialysis costs with contract pricing versus costs without contract pricing. This comparison is easier when CMS reimbursement schedules are involved, as they are very specific on how much a dialysis treatment should cost.
“Armed with data, hospitals can cross-reference CMS rates to a dialysis agreement,” Faerber said. “It’s also important to survey detailed invoices and examine the number of treatments divided by the total cost for the service to confirm if the hospital’s per-treatment cost is higher than the CMS rate. If it is, the solution lies in discovering the reason(s) why the hospital’s cost is higher.”
For example, a member hospital noticed a discrepancy in its costs. A closer examination of dialysis supplies on contract found several opportunities to generate a 10 percent cost reduction.
Tailoring the dialysis operation
When trying to reduce operating costs, Faerber recommends focusing on improving patient outcomes, then adjusting the staff-to-patient ratio if needed for optimal efficiency. Improved patient outcomes include shortened length-of-stay rates, fewer emergent treatments and the ability to move patients through the acute care setting more efficiently to outpatient facilities or home care dialysis.
“If you improve patient outcomes and then right-size clinical care, you will naturally generate cost savings,” Faerber said.
Right-sizing this clinical care requires ensuring the right treatment is administered at the right time. This means assessing if the patient undeniably requires dialysis and if so, how often do they require it? What type of treatment is best for optimal patient outcomes? Optimizing the staff ratio can also drive costs down. Each hospital’s dialysis operation is slightly different and smaller units may cross-train staff to perform multiple roles.
The experts in the laboratory and dialysis practice within Vizient Advisory Solutions have decades of industry expertise in laboratory and dialysis management, blood management and the implementation of successful clinician engagement strategies. In addition, they have the relationships with suppliers to help negotiate the best pricing for materials and deliver sustainable lowered costs.
“Dialysis is an area with a high focus on improving patient outcomes, but do not dismiss the opportunity to discover operational and quality improvements that can lead to significant cost savings,” Faerber said.
To learn more about how your organization can improve its dialysis efficiency, contact Akiva Faerber.