Outpatient care variation reduction: Is there a worthwhile opportunity?

Advisory Board has been sizing and researching the multi-million dollar inpatient care variation reduction (CVR) opportunity for years. But, recently, we’ve gotten questions about the opportunity for outpatient CVR.

As researchers, we were curious—and skeptical—about the outpatient CVR opportunity for one main reason. Each individual service provided in the outpatient space costs less compared to the inpatient setting. So, standardizing care requires more effort to generate the same savings as inpatient CVR. That means more time, more energy, and more behavior change to yield similar savings.

Our data analysis supported that hypothesis. There is some cost savings opportunity in the outpatient space, which we outline below. However, achieving the scale necessary to generate similar cost savings as inpatient CVR efforts poses a substantial challenge.

The main takeaway: Focus first on inpatient care variation reduction. There’s a greater bang for your buck.