The 80/20 Rule

20% of the patients on your panel generate 80% of your costs.



Your organization is probably spending a lot of money to identify those high-spenders.



Data extraction and analysis, cost-scoring.  It’s all expensive rubbish.



You can go down your list of 500 patients and pick out the 25 that are going to cost you the most money next year.






Because you know them.



Data analysis is an industrial response to the fact that you’ve been given far too many patients to be responsible for.



Far too many patients that you can know, engage with, and serve as their confidentialist.



Healthcare delivery organizations are spending millions on data scoring systems—rarely sold with any unbiased evidence that they impact costs.



So don’t worry about all the artificial intelligence and risk scoring.


  • Identify your high-risk patients.
  • Make sure they are coded thoroughly.
  • See them regularly, even if there is nothing immediately going on with them. It might mean going on a house call or to the nursing home, but it will be worth it.


When your list is too large to pick out your highest-risk patients by hand, you’re taking care of too many patients.  And whether you spend your money on data analytics of questionable value or merely overspend because you’re too busy—a panel that is too large will generate less net revenue with more effort than a panel size that’s “just right.”


Right size, get home on time—and win



The 80/20 rule applies to your meds as well.


  • 20% of your meds generate 80% of your costs.
  • Identify those meds and the patients who take them.
  • Make sure they are really helping and that the side effects are worth it.



20% of your SNF episodes generate 80% of your SNF costs.

  • Learn to sniff out those potential stays as early as you can and manage them intensely. Don’t rely on your case manager, get involved yourself. Often, your personal presence is all that is needed to move things along.



20% of your hospitalizations generate 80% of your inpatient costs.

  • If you have to use a hospitalist, identify those outliers as soon as you can and visit them every day. Your hospitalists will love love love having you there by their side. And you may optimize some care while cutting hospital days as well.



Direct your energies thoughtfully and both you and your patients will benefit.


It’s your relationship with your patient that generates value.


Use it.







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