CHICAGO — There's a big difference between potential economies of scale and actual economies of scale, and Ascension Health has begun the process of realizing more of the benefits of size.

Ascension, the second largest health system in the nation, has begun a process to capture more of the benefits of being large while maintaining or improving the quality of the care, according to Ascension senior executives who spoke at the American College of Healthcare Executives 2015 Congress on Healthcare Leadership.

Patricia Maryland, president of health care operations and chief operating officer, and Carol Schmidt, senior vice president of system integration, described their systematic method for streamlining processes and oversight on a national scale.

"What's unique about what we've done is the rigor and the structure," Maryland said. And they are very transparent about progress or lack of it, she said.

They say their process can work for any hospital or system willing to commit to doing it. "It's scalable, no matter how big or small," Schmidt said.

Before getting there, a host of things had to fall into place, including workforce restructuring, gaining the commitment from leadership and establishing an office dedicated to improving health care value. "We've realized it can't just be what you do in your spare time," she said.

Ascension, with $20 billion in operating revenue, 22,000 available beds and 155,000 workers, is targeting specific areas for improvement, dubbing them value creation opportunities, or VCOs. The initial round of VCOs was chosen systematically and produced a diverse list of areas:

  1. Facilities
  2. Clinical process reliability
  3. Revenue cycle
  4. Physician enterprise optimization
  5. Labor optimization
  6. IT optimization

The idea is to assess a VCO to find the best way of doing things in a particular area and then have everyone do it that way. For example, in revenue cycle, Ascension brought together leaders across its multiple markets who identified opportunities for improvement and developed best practices that were spread across the national health system.

The health system has achieved varying levels of success with the different VCOs, and in total saved $78 million more than targeted for the first year as part of a five-year plan to realize $5.2 billion in incremental value.

The next series of VCOs is concentrating on reaching out to independent physicians to serve them better and on four specific service lines: behavioral health, cardiology, oncology and orthopedics.