Prescription for Change

How to build a governance structure to support CVR at scale

by Virginia Hite

Care variation reduction (CVR) is one of the few opportunities in health care to net multimillion-dollar cost savings while safeguarding quality. Yet, while most hospitals and health systems have invested in CVR, few have achieved their full cost savings potential.

Access the CVR Opportunity Assessment to see your organization’s specific cost savings opportunity

To maximize ROI, CVR requires a coordinated, system-level effort—and that starts with a dedicated and centralized CVR governance structure. The rationale: Most quality departments and performance improvement teams lack the data decision-making authority and the level of oversight required to identify the greatest CVR opportunities and allocate resources for CVR across the entire system.

Effective CVR governance typically consists of two levels.

1. System-level oversight committee

The most successful organizations stand up a dedicated system-level oversight committee for CVR that is responsible for ensuring a coordinated approach to CVR across the system, including:

  • Setting system-level cost savings and quality goals attributable to CVR;

  • Prioritizing among CVR opportunities and selecting which to pursue;

  • Convening clinical working groups to develop care standards;

  • Allocating centralized resources to working group; and

  • Evaluating and approving care standards ahead of roll-out.

To support system-level governance—and ensure executive alignment around the system's resource allocation decisions—the oversight committee should be executive-led and include both clinical and non-clinical executives. Clinical executives include:

  • The system-level Chief Physician Executive; and

  • The system-level Chief Nursing Executive (or senior-most CNO)

Non-clinical executives include:

  • The CEO;

  • The CFO; and

  • The CIO or CMIO.

The key is that the system-wide oversight committee stays focused on governance—which includes concentrating on strategy, prioritizing vision, monitoring key indicators of success, and guiding decision-making for CVR—not only the day-to-day work.

2. Clinical working groups

The clinical working groups are a level down from the oversight committee. They drive CVR within their assigned clinical area or service line. Clinical working groups are often responsible for:

  • Identifying the root causes of care variation within their clinical area;

  • Reviewing external and internal evidence/best practices;

  • Coming to consensus on new clinical standards; and

  • Supporting the implementation of—and adherence to—new care standards.

Clinical working groups are typically co-led by a dyad—either a physician-administrator dyad or a physician-nurse leader dyad—and include multidisciplinary representatives from across the service area such as, physicians, nursing, pharmacy, therapy, and supply chain. The scope of impact of a new care standard is broad, so the representation on the committee should be as well.

Effective clinical working groups are also supported by non-clinical process experts—allocated by the oversight committee—who provide the relevant project management and data analysis expertise.

How CVR governance looks in practice

The chart below shows how two industry leaders built a dedicated CVR governance structure at their organizations: Banner Health, a 29-hospital, not-for-profit system based in Phoenix Arizona; and Mission Health System, a six-hospital community health system based in Asheville, North Carolina.

Learn more: 10 insights on reducing care variation from pioneer health systems

Reducing unwarranted clinical variation is not a new ambition—organizations have been striving to define and implement evidence-based clinical standards for decades. However new market forces, from margin pressure to consumerism, mean that reducing care variation is now topping executives’ strategic agenda as a mission-critical opportunity.

This report offers ten insights from the day-long discussion that we hope are helpful to other executives seeking to push the envelope of what’s possible by reducing care variation.

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