How Intermountain trimmed health care costs through robust quality improvement efforts

Abstract

It has been estimated that full implementation of the Affordable Care Act will extend coverage to thirty-two million previously uninsured Americans. However, rapidly rising health care costs could thwart that effort. Since 1988 Intermountain Healthcare has applied to health care delivery the insights of W. Edwards Deming's process management theory, which says that the best way to reduce costs is to improve quality. Intermountain achieved such quality-based savings through measuring, understanding, and managing variation among clinicians in providing care. Intermountain created data systems and management structures that increased accountability, drove improvement, and produced savings. For example, a new delivery protocol helped reduce rates of elective induced labor, unplanned cesarean sections, and admissions to newborn intensive care units. That one protocol saves an estimated $50 million in Utah each year. If applied nationally, it would save about $3.5 billion. "Organized care" along these lines may be central to the long-term success of health reform.