![]() Activity-Based Costing-the Bedrock for Effective Service-Line ManagementĪ service-line management approach combined with an ABC system give organizations easy access to integrated clinical and financial information for specific patient populations, allowing clinicians to immediately and more easily identify populations at risk (e.g., expectant mothers with GDM) and define appropriate interventions. The diversity of thinking and collaborative efforts, based on accurate data, also empowered UPMC to achieve standardization and consistency in its MFM department and across its system of 30-plus academic, community, and specialty hospitals. Figure 1: UPMC’s GDM process map.ĭata-derived improvements included how to engage frontline staff earlier, identify institutional champions, and communicate process changes to avoid duplicate work. The organization’s MFM leadership created a multidisciplinary team that leveraged the actionable analytics from the new costing system to create a reliable process map (Figure 1), including sustainable solutions. In some cases, organizations may need to restructure teams or create new ones to foster an environment for successful ABC (particularly if current team structure is based on antiquated costing systems).įor example, when the University of Pittsburgh Medical Center (UPMC) decided to leverage ABC in its GDM improvement efforts, the health system built a new team around ABC. In a collaborative approach, multidisciplinary leadership works with stakeholders from not only the clinical arena but also operations, finance, and information technology each team brings a different perspective from their unique discipline. Proper implementation and process changes are critical for success in an advanced ABC landscape however, the importance of collaboration cannot be overstated. A Collaborative Approach Lays the Groundwork for Activity-Based Costing Success This sophisticated costing approach allows service lines, such as MFM, to understand the nuances of cost across every activity within a high-risk pregnancy and effectively manage these costs at a granular level, versus the limited traditional cost accounting approach that provides only siloed data at a high level. With ABC applied to a specific service line (e.g., maternal-fetal medicine, more commonly known as care for high-risk pregnancy), service line leaders and providers can identify a patient’s risk for certain conditions earlier, improve patient outcomes, and decrease cost overtime.Īlthough improving clinical care processes might seem like an obvious focus for improving GDM, insight from ABC spurs the real change. Rather than rely on traditional, outdated costing systems, healthcare organizations can leverage data to improve healthcare delivery with ABC solutions, a costing methodology that assigns a cost to each product and service based on its actual consumption. ![]() Activity-Based Costing in Healthcare Unleashes Actionable Data to Improves Outcomes Comprehensive, actionable data-derived through an activity-based costing (ABC) system-improves healthcare delivery by laying the foundation for long-lasting clinical and administrative improvement. And, with mounting pressure to deliver better care with fewer resources, health systems face a larger threat that is often overlooked in the journey to meet these new standards of care: inaccurate, siloed data. Because GDM affects two patients, doubling health risks and cost, GDM is potentially a significant opportunity area for improvement. Furthermore, the mother’s high blood sugar affects the baby’s, exposing newborns to risks including overgrowth, trauma due to large size at delivery, metabolic consequences, hypoglycemia, jaundice, and increased chance of cesarean section delivery.įor healthcare organizations today-whether for-profit or not-for-profit, in an urban or rural area-the biggest challenges in delivering quality healthcare are sustainability and cost. GDM-hyperglycemia, or high blood sugar, during pregnancy-not only affects a large population but also increases cost for organizations and compromises care for not one but two patients, the mother and the baby. ![]() every year, health systems have a vested interest in identifying women at risk for the condition as early as possible. With gestational diabetes mellitus (GDM) affecting up to 10 percent of pregnancies in the U.S. This report is based on a 2018 Healthcare Analytics Summit presentation given by Paula Lounder, Director, UPMC Corporate Finance, Women’s Health Service Line Finance Lead Hyagriv Simhan, MD, MS, Executive Vice Chair, Obstetrical Services, UPMC and Beth Quinn, MSN, RNC-MNN, Program Director, Women’s Health Services, UPMC: “Integrating Clinical Improvement and Activity-Based Costing Identifies Pathway to Healthier Moms and Babies.”
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