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Systems Can Work: Rooting Out Variation and Saving Millions in San Diego

By Russ Mitchell, Kaiser Health News

Among other changes, Scripps Health streamlined its ER admission process, slashing wait times and saving $29 million. (Taber Andrew Bain/Flickr)

Among other changes, Scripps Health streamlined its ER admission process, slashing wait times and saving $29 million. (Taber Andrew Bain/Flickr)

A hundred managers at Scripps Health jam shoulder-to-shoulder into a break room in San Diego. CEO Chris Van Gorder goes at them like a football coach down by 3 at halftime.

“What are we trying to do in our health care system?”

“Reduce costs!”

“Why?”

“Health care is too expensive.”

“The solution is going to come from Washington D.C., right?”

There was a cost difference of $6,000 between two Scripps hospitals performing the same cardiac procedures.
“Ha ha ha ha.”

“Sacramento then, right?”

“Ha.”

“The solution,” says Van Gorder, pumping an index figure toward his team, “is going to come from right here.”

Van Gorder, an ex-cop turned hospital executive, rescued troubled Scripps from near insolvency a dozen years ago as its new CEO. Now, he’s put Scripps in the middle of a cultural transformation aimed at saving hundreds of millions of dollars a year by — get this — coaxing physicians and managers at Scripps to work together, and standardizing care across every hospital in the system.

Just this week, we’ve seen how lack of standardization leads to a nearly-inexplicable price range of $11,000 to $125,000 for a standard hip replacement across the country. Continue reading