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Reducing Hospital Variability Costs

CareLuminate Case Study: Reducing Healthcare Costs and Improving Quality Part 2

November 2023

Emergency Medical Service

In PART 1 we described by hospital cost variability as a significant driver for higher employer healthcare costs. PART 2 outlines how CareLuminate helps employers reduce these high variable costs.

The Opportunity Size for Optimized Care

Continuing our example from Part 1 for an employer on the United Healthcare Choice Plus Plan, we can estimate the possible savings from even minor changes in employee hospital decisions. As we saw in PART 1, our preliminary estimate was that North Kansas City Hospital is a good hospital that is very low cost, while the HCA hospitals are higher cost and lower quality.

Let’s assume that our firm is self-insured with 2,220 employees on the Choice Plus network. Our firm spends roughly $26.6M each year on healthcare, with roughly $10.7M going towards hospital care.

We will assume that employees frequent the KS hospitals proportional to the hospital sizes. If there is a way to make even small adjustments on hospital decisions, the results would drive significant yearly savings:

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Research and Communication That Changes Employee Decisions

Educated consumers are the missing link to most of healthcare’s current challenges. If all consumers, both employers and patients, started to make value-based decisions in selecting care like they do with other consumer goods or services, incentives would shift quickly for hospitals, doctors’ offices, and other care organizations to deliver higher value.

CareLuminate started as a hospital quality-measurement firm. Where nearly every hospital quality-measurement firm measures quality through the same CMS data that hospitals are forced to report publicly, CareLuminate does something much simpler: We interview nurses working in the hospital to understand if they would refer their loved ones to their own hospital for care.

Feedback from nurses is incredibly revealing. Across the 42 hospitals in 6 regions that CareLuminate has measured, feedback from nurses is statistically very differentiating.

Alarmingly, hundreds of nurses in multiple regions of the country are reporting the same concerns: Care quality is falling after the pandemic as care teams are stretched and hospitals look to save costs by cutting back. Dozens on nurses in every region of America have shared with CareLuminate the concerning comment: “Now is not a good time to be sick in America.”​

It should be noted that these findings mirror other quality measures in important ways. Consider the following statistically significant correlations between this simple measurement and other complex measurements of care:

While it is possible to make highly complex correlations to quality measurements, the power of the CareLuminate Nurse Recommendation measurement is in its simplicity! Where other quality measurements require complex acuity adjustment, the CareLuminate measurement is the equivalent of getting a reference on a restaurant by asking a friend of yours who is the cook at the restaurant—yes your friend is probably biased in thinking the restaurant is great, but you know if your friend says to not eat there, it must be really bad. Similarly, nurses willing to recommend against their own hospital are a warning beacon for all consumers.

Coming back to Kansas City, CareLuminate works with multiple employer sponsors to complete this impactful measurement of quality. For hospitals within the United Choice Plus network, here is what CareLuminate has found:

These findings mirror what we saw in other quality measurements, finding that North Kansas City Hospital is an excellent hospital for care and that the HCA hospitals of Kansas City have concerning staffing issues.

Similar to the power of the comments in Amazon customer reviews, the power of the stories between hospitals are impactful. Consider these two different nurse interviews CareLuminate conducted. Patients will make different decisions when they learn more than a rating—for instance learning that care at Kansas City HCA hospitals is poor because of high staff turnover and inexperienced nurses that are prone to making mistakes.

CareLuminate conducts this important research so that it can tell the stories behind the statistics. Healthcare is so important, and before any of us are in a hospital gown, vulnerable and reliant on the care of the hospital staff, we deserve to hear these different stories, not just statistics.

Because CareLuminate communicates in stories, the power of this data far more simple to communicate. CareLuminate works with each company to build a simple and powerful communicate campaign. Here would be an example for our firm in Kansas City wanting to warn employees about care at HCA and encourage employees to consider North Kansas City Hospital.

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Start Today

In the end, sponsoring a CareLuminate study is even more about improving care quality than it is about reigning in cost. The opportunity that most businesses have to do both is exciting.


Sponsoring a CareLuminate study is an investment in your local community’s healthcare. To find out more about a CareLuminate study in your local community, reach out to us at

CareLuminate Sponsorship Costs (Includes cost mapping, communication plan and full study results)

  • 1-500 local employees: $6,000

  • 501-1,000 local employees: $12,000

  • 1,001-3,000 local employees: $24,000

  • 3,001+ local employees: 45,000+

Meet With the CareLuminate Team Today to
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