Engage Physicians

How do we make physicians our cost–cutting champions?

Algorithm No. 3

  • RethinkEverything

    Procedures, medications, processes, technology and devices–it can all be improved. Make figuring out ways to provide higher quality care at a lower cost everyone's responsibility.

  • Demand Data

    Invest in the tools and resources needed to generate accurate, reliable data. Then allow physicians, not administrators, to determine the best areas for cost–cutting initiatives.

  • Share theWealth

    Engage physicians with incentives like cold, hard cash to motivate them to think differently. Create win-win partnerships between administrators and physicians. Be generous.

Two Perspectives


"Why should I care?" That was the question that urologist Blake Hamilton, M.D., shot back at a hospital administrator who had approached him about a cost–saving idea. "It's not my hospital."
Blake Hamilton, M.D. Medical Director of the Urology Center

Blake Hamilton, M.D. Medical Director of the Urology Center

Admittedly blunt, Hamilton's reaction echoes what many physicians at academic medical centers feel about proposed cost–saving measures. Doctors have fiercely guarded against the reach of business interests into the decision–making realm of patient care. Plus, they've had no financial incentive to save the system money. At the time, Hamilton saw nothing in it for him or his patients.

Over the past seven years, he's undergone a complete transformation from being uncommitted to becoming medical director of the Urology Center, a member of a profit–sharing committee that rewards physicans for cost-saving ideas (see page 26), and excited about spending the rest of his career here. "I'm pretty much all in," he says.

What prompted the change? It was the director of surgical services, Kathy Adamson, R.N., who set the wheels in motion. She told him he was a "terrific, bright surgeon" and encouraged him to join a risk–management task force. The idea wasn't appealing–"junior faculty don't want to be involved in the business of medicine"–but he was flattered. Then he received a follow–up invitation from the one person who always has your attention–the department chair. "The next thing you know, they were asking me to run a few things."

The more involved Hamilton became in the institution, the more he felt the institution's commitment to him. In short, he began to care. Now Hamilton wants to engender that kind of loyalty and engagement in his junior faculty by showing them early on that both he, and the institution, are invested in them. "If you position your institution as one on the move–as a model for the country–young physicians won't want to let go of it. And once you make a longterm commitment, then you want it to be good."


Gordon Crabtree didn't know much about health care when he became the CFO of University of utah hospitals and clinics ten years a go. Health care pricing was like a foreign language to him, and the world of Medicaid a sort of dangerous foreign land.
Gordon Crabtree, C.P.A., M.B.A. CFO, University of Utah Hospitals and Clinics

Gordon Crabtree, C.P.A., M.B.A. CFO, University of Utah Hospitals and Clinics

But Crabtree knew plenty about business and politics, which he quickly realized would serve him well in an environment that had so many competing interests. First order of business was to prove to the physician group that he was genuinely interested in developing a win–win relationship. Serendipitously, a flier landed on his desk for a Medicaid 101 meeting in Chicago. He returned from the four–hour meeting with a list of 25 action items that would annually enhance faculty revenues by $10 million and hospital revenues by $45 million. "Keep the money," Crabtree told the executive director of the physician practice group. "Just give me the credit."

That paved the way for Crabtree to begin making some fundamental changes: to create a culture of financial transparency and to "preach the unified gospel," as he puts it–converting people to the idea that there weren't different buckets of hospital revenue and corresponding margin for each specialty or patient care unit. There was only one bucket, which was for the entire system. And that money needed to be allocated strategically to support all of the missions of an academic medical center.

When CEO David Entwistle arrived five years later, he pushed Crabtree's ideas even further and revamped the most contentious and least transparent financial process–the transfers made from the clinical enterprise to the academic departments. Instead of meeting with individual chairs privately, Entwistle and Crabtree invited all of the chairs to decide how to allocate that single profit margin, shifting the full responsibility of making those hard decisions to them. "We use a formula to determine how much money there is to spend, and then they prioritize how to do it," says Crabtree. "Once they realize it's a zero–sum game, they come to an agreement about what the community really needs."

The Idea


No one is in a better position to figure out how to provide higher quality care at a lower cost than physicians. But how do you shift the mind–set so that they consider financial stewardship a fundamental part of their job description? One way is to have them share in the profits

The University of Utah Health Care Partners Program (UHPP) is designed to have the clinical enterprise award the academic department 50 percent of the annualized savings for any cost–saving idea its faculty members implement. The department can use the one–time money for anything except salaries–including funding research projects and purchasing new equipment and supplies. "It's the hospital saying, ‘We want to partner with you; we want to share these savings with you,’" says Quinn McKenna, M.H.A., chief operating officer of University of Utah Hospitals and Clinics.

Critical to UHPP's success has been the hospital's investment in the people, process and technology necessary to generate and openly share meaningful and reliable data. When physicians trust the data, they're more willing to scrutinize their practice patterns and determine how they–not administrators or analysts–can best improve the value of care they–re providing. "Physicians are scientists. If you give them good information, they'll make good decisions. If you give them bad information, they'll know it," says Jann Lefler, M.B.A., director of Financial Planning and Decision Support at University of Utah Hospitals and Clinics.

According to McKenna, UHPP is creating a new dialogue between physicians and administrators and shifting the culture dramatically. "Now we have everyone around the same table; everyone's involved in the conversation," says McKenna. "We have no intention of stepping back. We want to be part of the national solution to improve the value of health care."

"Physicians are scientists. If you give them good information, they'll make good decisions. If you give them bad information, they'll know it."

Case Study One:


Who wants to be an outlier when it comes to quality metrics? No one. So when nsqip data revealed that the rate of surgical intensive care unit (sicu) patients at university hospital receiving more than 48 cumul ative hours of mechanical ventilation was higher than the nsqip average, a team of experts got together to figure out how they could improve.

SICU physicians, respiratory therapists, nurses and quality experts formed a Performance Excellence Team to identify the problems and then devise and implement a series of interventions to improve patient care. "It turned out to be less about establishing new protocols and more about communication, timing and education," says SICU medical director Richard Barton, M.D. "Getting everyone on board was key to getting the job done."

The result? In one year, the new protocols reduced ventilator hours by 8,747, decreased the average length of stay from 13 days to 11.2 days (which added up to 1,458 total hospital days), and reduced the number of ventilator-associated pneumonia cases by 18. The direct cost savings for respiratory therapy alone was $100,000, and the UHPP Committee awarded $50,000 to the Department of Surgery. If associated costs, such as pharmacy, nursing and room charges, had been assessed the potential savings were even greater.

General surgery resident Gillian Seton, M.D., submitted the SICU ventilator quality improvement project to NSQIP and won the award for best abstract. She was the only resident invited to present at the NSQIP annual meeting.


Earl Fulcher, RRT, Respiratory Therapy Manager, Richard Barton, M.D., SICU Medical Director, Gillian Seton, M.D., General Surgery Resident, Steven Johnson, M.B.A., Senior Business Analyst
Pictured from left to right
  • Earl Fulcher, RRT, Respiratory Therapy Manager
  • Richard Barton, M.D., SICU Medical Director
  • Gillian Seton, M.D., General Surgery Resident
  • Steven Johnson, M.B.A., Senior Business Analyst

Case Study Two:


When faced with an opportunity to s ave hundreds of thousands of dollars a year and help reduce the emission of greenhouse gases, the decision is pretty easy. The trick, however, is finding those opportunities and then acting on them.

That's what Michael Cahalan, M.D., chair of the Department of Anesthesiology, did when he discovered a study that showed desflurane, the drug used almost exclusively in the OR since the early 1990s, costs more than $14 an hour, while the cost of an equivalent drug, isoflurane, had plummeted to just 53 cents an hour.

What resonated even more than the cost savings with the department's faculty and residents was the environmental impact. During a one–hour surgery, desflurane emits greenhouse gases equivalent to a car driven 235 miles, while isoflurane emits the equivalent of a car driven only 20 miles. Although patients wake up a bit more slowly from isoflurane, tapering the isoflurane dose appropriately or switching to desflurane at the end of each procedure solved that issue so that patient safety and comfort were equivalent with both drugs.



Why hadn't they switched sooner? Quite simply, they weren't looking. "If you don't care about what it costs, it's easy to use the more expensive drug," says Cahalan. "We need to think more carefully about which drugs we choose."

Cahalan's careful thinking has paid off. The green anesthesia program saved the hospital $300,000 on anesthetic drugs in 2011 and reduced greenhouse gas emissions by 25 percent. Meanwhile, Cahalan’s department is making the most of its UHPP windfall, using some of the reward money to upgrade computers and train residents.



Michael K. Cahalan, M.D.
"If you don't care about what it costs, it's easy to use the more expensive drug."

Michael K. Cahalan, M.D. Chair of the Department of Anesthesiology

Case Study Three:


When nsqip data showed that the laparoscopic colectomy length of stay for our patients was among the longest in the nation, colon and rectal surgeon Bradford Sklow, M.D., rallied two of his surgeon colleagues to figure out how to turn that data around.

Surgical oncologist Courtney Scaife, M.D., colon and rectal surgeon William Peche, M.D., and Sklow conducted a thorough review of the literature and then developed a new protocol for laparoscopic colectomies based on a Mayo Clinic study. Their goals were to improve recovery time, shorten length of stay and decrease morbidity.

They established a new fast track protocol and the results were dramatic, thanks in part to nurses who implemented the new protocol and created key patient education materials. After one year, the average length of stay decreased from 6.1 days to 4.6 days (better than Mayo Clinic's average). "Some of our patients were ready to go home just two days after surgery, which is unbelievable," says Peche. In addition to improving patient care, the hospital saves an average of $1,765 per surgery on direct labor and supplies.

"Some of our patients were ready to go home just two days after surgery, which is unbelievable."



Days Reduced to


William Peche, M.D., Assistant Professor of Surgery, Courtney Scaife, M.D., Associate Professor of Surgery, Brad Sklow, M.D., Associate Professor of Surgery Pictured from left to right
  • William Peche, M.D., Assistant Professor of Surgery
  • Courtney Scaife, M.D., Associate Professor of Surgery
  • Brad Sklow, M.D., Associate Professor of Surgery