What does Vilfredo Pareto Have to Do with Severity Reporting?

Vilfredo who?

Pareto, Vilfredo Pareto. You know? Pareto principle, Pareto law, the 80/20 rule, the Principle of Imbalance. Still don’t know? How about the Principle of Least Effort?

If it still doesn’t ring a bell, here’s a little background:

Vilfredo Pareto (July 15, 1848 – August 19, 1923) was an Italian engineer, philosopher, sociologist, economist, and political scientist. Safe to say, a fairly busy guy. Anyway, Vilfredo happened to be taking a closer look at the patterns of wealth and income in 19th century England. He noticed something startling: Vilfredo observed that the majority of the income and wealth went to a minority of his samples. Not so surprising right? Well, not when you look at it in isolation, but he also discovered two other important facts:

He noticed if 20% of the population had 80% of the wealth, then you could reliably predict what percentage of wealth, say, the top 10% would have, or even the top 5%. The point is not the actual percentages, but that the distribution of wealth across the population was predictably unbalanced.

The pattern of imbalance was not unique to that specific time period or to England.

Fast forward to today: The principle has been rediscovered and elaborated on by other pioneers to essentially mean that 80% of your results come from 20% of your inputs or efforts. This also means that the remaining 80% of your inputs are only responsible for 20% of your results.

This is a hard pill to swallow because, as a society, we have come to believe that all our resources and efforts have an equal contribution to the results we achieve. There is an assumption and expectation that causes and results are equally balanced, and this assumption can impact our ability to work smart and achieve the impact we are striving for.

IBM, very early on, appreciated the significance of the 80/20 rule when it redesigned its operating software to make the most-used 20% more accessible and user-friendly. It worked like a charm…

In healthcare, like other industries, the 80/20 rule is not absolute, and depending on the situation and/or data accumulated, the ratio is frequently tipped to a 95-5 or 90-10 division. It is, however, a good baseline to start from and to make some broad conclusions on certain processes, inputs, and outcomes. This process might also help us identify waste, which we already know is rife in healthcare.

What about Severity Reporting/CDI? Does it apply? As mentioned above, the theory may not be absolute, but it’s a good starting point to draw some broad conclusions in order to help you run a more efficient initiative to optimize the severity reporting data for your patient population.

Here are some instances where the 80/20 rule may apply to your CDI program:

• 80% of your queries may be generated for 20% of the specialties at your hospital

• Within the top specialties, 80% of the queries per specialty will more than likely be generated for 20% of your physicians in that specialty

• 80% of your unanswered queries will come from 20% of your physicians

• 80% of the queries will be for the top 20% of the most common diagnoses

Don’t forget that it works both ways and switching it around can also reveal valuable information:

• Only 20% of your queries will be generated for a long list of specialties (typically with a low patient volume)

• Within the top specialties, just 20% of your queries will be generated for a long list of physicians (typically with small inpatient practices)

• 20% of your queries are for a long list of less common diagnoses

Depending on the way your program is set up and the scope of your program, the numbers won’t be absolute, but it does allow you to think more carefully about the resources you have and where they are being allocated in order to align with a very efficient program that optimizes results.

The 80/20 rule benefits providers

I believe that as long as documentation guidelines, according to third party payor expectations, are not taught in medical school, significant documentation discordance will exist. It stands to reason, then, that in order for physicians to change their documentation practices and habits in a sustainable manner, the best approach would be for them to focus on accurate documentation of the most impactful diagnoses specific to their practice and patient population. It makes sense for them to focus on the diagnoses that they personally miss or document inappropriately, which held true during the ICD-10 transition as well. I once had a physician stand up and justify his opposition to the implementation of ICD-10 because of an ICD-10 code that represents "Being sucked into a jet engine, Subsequent episode." He was a podiatrist and I think he missed the point of the implementation.

Is it hype or does that data actually follow a pattern?

We applied Pareto’s Principle to the number of Medicare discharges by MS-DRG for calendar year 2019, which is publicly available, and calculated the percentage of all the discharges that the top 20% of MS-DRGs represent. Low and behold: Literally 80% of those discharges are represented by the top 20% of MS-DRGs! We focused on a pre-COVID time period to avoid a scenario where the results could be skewed by an atypical patient population.

We then looked at the physician data for one of our randomly selected clients. 20% of the attending MDs were responsible for about 80% (actually 79%) of all!

The following questions would enable a hospital to further screen down to the number that really matters (in our experience, down to a specialty-specific list of 7-14 diagnoses):

• What diagnosis codes are most common in your hospital's unique patient population?

• What diagnosis codes have historically been the most under-documented by physicians?

• Which diagnosis codes are more likely than others to impact the accuracy of the DRG code?

• Which diagnosis codes have a significant impact on risk adjustment for quality scores or Medicare Advantage payments?

Equipped with the answers to these questions, you can supercharge your CDI efforts and guarantee that you will improve physician buy-in. I will caution you about misinterpreting the 80/20 rule. Many may think that you should devout all your time and effort in the 20% and ignore the rest. This is far from the truth, since an approach that focuses on the 20% from an effort standpoint but doesn’t ignore the rest is really the best one to adopt.

We are constantly hearing about the impact and ROI that CDI programs across the country should be meeting, at a minimum, and that mantra won’t go away anytime soon, especially in the setting of accountability to Value-Based and Quality metrics. The scope for programs across the country continues to expand and leadership has to justify the investment in staff, software, continuing education, and physician advisor roles. A strong business case must be made for a fully staffed and robust CDI program or Severity Reporting initiative. This business case must be based upon data that speaks to bolstering the organization’s quality scores and, yes, as much as you might not want to hear it, the bottom line as well.

Leveraging the 80/20 rule to get physicians to change documentation habits in a sustainable manner is a win-win situation for the organization and the physician. With time, applying this 80/20 rule will also support a culture of high-quality documentation, which is what we should be striving to achieve. Your program should never aim to make providers at the bedside subject matter experts in “CDI”, but rather, leverage the 80/20 approach to help them achieve proficiency on a short list of high impact diagnoses that are clinically relevant to them.

Any initiative to improve and sustain high-quality physician documentation habits will require a refusal to accept the status quo. Leveraging Pareto’s principle to accomplish this can be a very powerful strategy. Focus and concentrate on the few diagnoses and processes that have the highest impact, help your physicians master them, and don’t move on to others until your physicians have mastered the first set. Trust me – your physicians will thank you.