Health systems are looking at improving quality and patient experience while reducing costs and improving cost margins. It is no surprise that physician decisions account for 80% of all healthcare expenditures [Crosson, 2009].Variations in medical treatments are common and occur across disease areas, clinicians, facilities, and geographies. Some variations are expected and are normal depending on the patient condition and characteristics. However, practice variations can be influenced by factors that are extrinsic to the patient.

1. Shining A Light on
Care Variation in
Clinical Practice

2. Health systems are looking at improving quality and patient experience while reducing costs and improving
cost margins. It is no surprise that physician decisions account for 80% of all healthcare expenditures
[Crosson, 2009].
Variations in medical treatments are common and occur across disease areas, clinicians, facilities, and
geographies. Some variations are expected and are normal depending on the patient condition and
characteristics. However, practice variations can be influenced by factors that are extrinsic to the patient.
This could be because of the physician's nonadherence to effective standards, preference for a particular
care pathway, or availability of certain types of healthcare resources [Wennberg, 2002]. Such unwarranted
variations are often deadly and costly. The amount of variability in health outcomes is humongous even
after accounting for differences in population and comorbidities [Rosenberg, 2016].
Physicians often cite various reasons to justify their own preferences and practices. Clinical practice is
often idiosyncratic and unscientific. It need not be this way. In every physician group, there are outliers.
However, focusing on outlier physicians will not solve the huge problem of unwarranted variation. Hence,
the value of engaging all the physicians, as a group, in the development and implementation of best
practices becomes important. The key to a successful physician engagement program is to base it on a
common purpose, drive with data, be engaging, and measure outcomes.
There are 3 steps to successful unwarranted variation reduction. First, calculate the total cost of care
(TCC) for procedure or condition-specific episodes (eg, joint replacement, diabetes, and congestive heart
failure) and further unpack the costs at granular levels such as Professional, Laboratory, Pharmacy,
Procedures, and Imaging. Next, benchmark the physicians for a wide variety of measures. A root-cause
analysis will help you understand the sources of variation. Second, engage the entire provider group, not
just the outliers, using a nondisruptive and standardized approach and provide personalized and group
feedback to the clinicians. Third, measure and repeat the engagement process until the unwarranted
variation is reduced to its intended target. This entire process is to not only make the physicians aware of
the best practices but also allow them to implement the best practice in a systematic way.

3. We can help you understand your Episodes of Care using your cost and clinical data, unearth the
improvement opportunities, engage your physicians, and deliver practice change. We look forward to
opportunities to apply Variation IQ tools and processes to enhance the healthcare of your patients, while
improving your operational efficiency and margins.
F. J. Crosson, Change the Microenvironment, April 2009, Modern Healthcare and The Commonwealth
Fund, April 2009.
Wennberg JE. Unwarranted variations in healthcare delivery: implications for academic medical
centres. British Medical Journal. 2002;325(7370):961-964.
Rosenberg BL, Kellar JA, Labno A, Matheson DHM, Ringel M, VonAchen P, et al. Quantifying
geographic variation in health care outcomes in the United States before and after risk-adjustment.
PLoS ONE. 2016;11(12):e0166762.

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