Healthcare News & Insights

One hospital system’s cost-saving steps saved millions

Did you know the healthcare industry wastes nearly $765 billion a year? According to the Institute of Medicine, that’s nearly one-third of total healthcare spending. Just think what your life would be like if hospitals could eliminate mistakes, duplicative services, unnecessary services and inefficiencies. That’s exactly what one hospital executive did his best to do — and saved his facilities millions.

Chris Van Gorder was a cop until a serious injury at age 25 spurred him to pursue a career in health care. Now he’s the CEO of Scripps Health, a private, nonprofit health system in San Diego, CA, that includes four acute-care hospitals and more than 2,600 affiliated physicians.

When Van Gorder took the helm of Scripps the system was in dire straits financially. But he didn’t look for cost-cutting measure from Washington D.C. Instead, he looked internally at Scripps.

“Hospitals that can’t find a way to deliver their product less expensively and with better quality are going to go out of business,” Van Gorder said on “It’s as simple as that.”

So that’s just what he did.


By getting Scripps’ physicians and managers to work together and standardizing care across all four hospitals.

The goal was to get rid of “unnecessary variation” that did nothing to improve patient care at all four hospitals and 23 clinics under Scripps umbrella. Reason: Van Gorder knew that while all the physicians were doing their best, they all did it differently. So the answer was to find the way that worked best and implement it for all.

Cost-saving steps

Here are some of the cost-saving measures Scripps took to eliminate millions in unnecessary spending:

  • A cross-system team examined cardiac valve and coronary artery bypass graft procedures across all four hospitals. The team found that one facility required nitric oxide to be administered to patients to boost oxygen intake in the blood, while the other Scripps facilities didn’t. When outcome data for the procedures was scrutinized, the outcomes were the same. Now, Scripps no longer requires nitric oxide, but a physician can order it if he or she feels it is necessary. Eliminating this requirement saved $400,000 per year.
  • At one time emergency room wait times could be as long as eight hours at Scripps facilities. Now, nurses and physicians are required to see patients simultaneously, early in the process, cutting average wait times to 30 minutes. By patients not having to repeat their health problems over and over again to different people, fewer mistakes are made, thus improving communication, making the process more efficient so that more patients can be seen. In the first year alone, this change increased revenue by $29 million.
  • The hospitals no longer stock their radiologists’ favorite contrast agents, such as iodine, barium, gadolinium, etc., to highlight structures and fluids in patients’ bodies. Now only a few brands are stocked, which were agreed upon by the physicians, and these volume discounts saves $1.5 million a year.
  • Voluntary best-practice protocols were established, after Scripps studied three cardiac surgeons at one facility for procedure variations. Instituting these best practice not only decreased length of stay by almost a day, but it saved Scripps $3.6 million a year.

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