University of Utah Health Care

Panoramic view of Salt Lake City.

University of Utah Health Care is trying to determine what  the goods and services provided by a hospital really cost and while doing so, the institution says, it’s cutting expenses and improving care.

As this very important New York Times article says: “Most businesses know the cost of everything that goes into producing what they sell — essential information for setting prices. Medicine is different. Hospitals know what they are paid by insurers, but it bears little relationship to their costs.”

But now, thanks to a project led by Vivian Lee, M.D., “the hospital is getting answers, information that is not only saving money but also improving care. The effort is attracting the attention of institutions from Harvard to the Mayo Clinic. The secretary of health and human services, Sylvia Mathews Burwell, visited last month to see the results”

While the costs of other medical centers in the Salt Lake City area have increased an average of 2.9 percent a year over the past few years, the University of Utah’s have declined by 0.5 percent a year. “We have bent the cost curve,” Dr. Lee told The Times.

The paper says that the  “linchpin of this effort at the University of Utah Health Care is a computer program — still a work in progress — with 200 million rows of costs for items like drugs, medical devices, a doctor’s time in the operating room and each member of the staff’s time. The software also tracks such outcomes as days in the hospital and readmissions. A pulldown menu compares each doctor’s costs and outcomes with others’ in the department ”