Reining in costs is an ongoing challenge in the U.S. healthcare industry. Stakeholders are employing various strategies to curb healthcare spending, which ballooned to $4.9 trillion in 2023, a 7.5% jump from $4.5 trillion in 2022. Numerous factors drive healthcare costs, many of which are outside the control of healthcare provider organizations. However, healthcare providers can contribute meaningfully to cost-cutting efforts by reducing avoidable clinical expenditures.
According to Arun T. Mathews, M.D., regional chief medical officer at MultiCare Health System, this was the primary goal of the health system's partnership with IllumiCare, a healthcare technology company. Through the partnership, the 13-hospital system has been able to reduce unnecessary expenditures on medications and laboratory orders, making healthcare operations more efficient.
"We paired with IllumiCare, [and] they did an analysis of our data and opportunities, and we asked them to focus on our laboratory and pharmaceutical opportunities to really just look at low-hanging fruit and also look at which prescribers these opportunities lay with," Mathews said. "And what we found was that there were some opportunities for optimization of prescribing patterns."
The tool has helped improve prescribing efficacy and reduced unnecessary orders within the health system. However, to reap these benefits, health system leaders had to first orchestrate change management across clinical teams.
What is 'clinical waste'?
Avoidable clinical services, such as prescriptions and laboratory orders, are common in the U.S. healthcare system. A study published in 2021 revealed that most patients experience unnecessary testing on the first day of an inpatient hospital stay, with lab tests being the most common type of test ordered. Similarly, CDC data shows that 28% of antibiotic prescriptions are unnecessary.
Mathews described these unnecessary clinical services as "clinical waste," noting that these additional expenses do not improve patient care.
"In some instances, a patient does not need a daily blood draw of a CBC with a differential... And the actual additional benefit gained from a data standpoint for doing that every 24 hours may not be as helpful and, in fact, may have some detrimental effects to the patient," he said.
He further noted that these additional expenses can be eliminated when physicians and prescribers have all the options regarding a particular treatment or medication in front of them. When clinical teams have the best and most current evidence and comparative data around one type of treatment versus another and the costs associated with those treatments, they will likely make the more cost-effective choice.
This is especially critical for MultiCare, which, like other health systems across the country, is emerging from the financially stressful pandemic period. A report from the American Hospital Association showed that hospital expenses increased by 17.5 percent from 2019 to 2022, and hospital margins remained consistently negative in 2022.
"Because of supply chain challenges, because of formulary challenges, we really made a determination that we needed to focus on financial stewardship, financial recovery," Mathews said. "And one of our avenues for exploration was understanding clinical stewardship at the point of clinical and medical decision-making."
The health system began searching for a vendor partner who could help it tackle this challenge. Its venture arm, MultiCare Capital Partners, analyzed different investment opportunities.
"One of our guiding principles in our investment thesis is that this has to be technology that we feel MultiCare would benefit from and could be integrated into our standard work," Mathews noted.
MultiCare had an existing partnership with IllumiCare, inked in 2022, that focused on providing clinicians with automated recommendations for clinical trials at the point of care. MultiCare leaders decided that it made sense to engage the company to help formulate an intervention strategy for clinical waste, Mathews said.
In July 2024, MultiCare began piloting IllumiCare's advanced analytics tool to address the health system's clinical waste issue.
Using advanced analytics to curb clinical waste
On any given day, clinicians have to make innumerable decisions regarding patient care. Mathews explained that IllumiCare's clinical decision support (CDS) solution aims to support clinicians by contextualizing their treatment decisions and providing relevant information.
Because of supply chain challenges, because of formulary challenges, we really made a determination that we needed to focus on financial stewardship, financial recovery. And one of our avenues for exploration was understanding clinical stewardship at the point of clinical and medical decision-making.
Arun T. Mathews, M.D.,Regional chief medical officer at MultiCare Health System
The company's CDS solution, called Smart Ribbon, provides summaries of published studies and data on comparative treatments and therapies to help clinicians make the most clinically effective and cost-conscious treatment decisions for their patients, said IllumiCare CEO G.T. LaBorde.
To provide these treatment recommendations, Smart Ribbon leverages advanced analytics, including machine-learning techniques, to assess patient history and attributes and published literature. LaBorde explained that the solution also examines the clinician's order history and other patient care attributes to predict whether a particular piece of information will influence a specific clinician about a certain decision.
The information is offered to the clinician in two ways: a passive nudge or a more active interruption to the clinician's workflow. MultiCare implemented the latter, called CDS Hooks, which operates within the Epic EHR system.
So, if a clinician submits an order through the Epic EHR, CDS Hooks works behind the scenes to assess the order and determine whether another service or therapy might be better suited to the patient's needs and more cost-effective. It stops the clinician's workflow with a lightbulb that pops up to indicate a recommendation.
"We're not really sacrificing anything in clinical quality or otherwise," LaBorde said. "There are just circumstances where the cheaper one is just as good in a specific situation. But doctors, to their credit, they just don't know that that opportunity exists. And so that you have this untapped potential in most places."
If the clinician accepts the system's recommendation, CDS Hooks automatically starts a new order for the clinician. Mathews noted that this reduces clinicians' cognitive load and the extra clicking required to create a new order form, which in turn reduces the risk of attention-based errors.
Implementing the CDS solution
The CDS Hooks tool offers a wide range of benefits; however, these are rendered meaningless without effective workflow integration and broad adoption among clinical care teams.
Mathews described the technology integration process as a Tetris puzzle, balancing change management while also understanding and appreciating how clinicians make medical decisions.
MultiCare leaders introduced the technology to the physician workflow, initially just turning it on and giving their clinicians a chance to test it out and dive into the clinical recommendations. After that, the leadership interviewed clinicians to understand the cognitive barriers to using the tool.
"From those interviews, we actually identified the fact that physicians, while appreciative of these little nudges or illuminations, tended not to act on them because they felt like it was an additional cognitive load and a significant amount of additional work," Mathews said.
Based on this feedback, health system leaders examined how physicians interacted with the CDS alerts, finding that additional cognition was associated with the alerts. This included understanding the information being provided and deciding whether to change the treatment plan as a result.
"And quite frankly, that was a big 'aha' moment for us that was like, yes, there's a lot of work associated with how physicians interact with alerts, and traditionally, we've kind of assumed that the docs will be okay with just taking on just that additional layer of cognitive load," Mathews said.
MultiCare leaders then partnered with their physician group to develop a clinical stewardship quality metric that gives the physicians credit for interacting with the CDS alerts. The metric helps track which physicians agree with and change their care plan based on the CDS tool's recommendations and puts them into a group that receives a cut of the shared savings.
"When [the clinicians] realized that they would get credit for doing this extra little bit of cognitive work, and it would feed into a shared savings bucket that was part of their quality metrics performance incentive, then all of a sudden, we got to see some really impressive engagement with the tool," Mathews said.
The health system leaders conducted literature reviews and presented data to their legal and compliance departments to ensure that the shared savings methodologies were sound.
After piloting and refining the solution's use, MultiCare expanded the tool's deployment in January 2025. Five Puget Sound hospitals currently use the tool, and the health system plans to scale the solution systemwide.
According to Mathews, the CDS solution has netted major gains for the system, with cost-savings totaling approximately $85 to $90 per physician per admission, which has translated to about $2.5 million in clinical waste reduction.
Though the financial benefits are valuable, Mathews noted that the patient experience and care metrics are the ultimate deciding factors for continuing to invest in the implementation of the CDS solution.
"Fundamentally, to me, the healthcare waste reduction and the savings, that's all well and good," he said. "But, as a physician myself, that's just a litmus test or a marker of something much more profound, which is I now know that a higher percentage of our patients are being appropriately switched from IV medications to oral medications in a timely manner."
"I know that physicians now are contemplating a reduction in unnecessary treatments and a reduction in unnecessary lab tests that's ultimately translating into [less] unnecessary poking of our patients, and I think, indirectly, a better patient experience and a more fulfilling way of taking care of our patients," he continued.
Anuja Vaidya has covered the healthcare industry since 2012. She currently covers the virtual healthcare landscape, including telehealth, remote patient monitoring and digital therapeutics.
