As U.S. healthcare spending surges—reaching $4.9 trillion in 2023, a 7.5% increase from the previous year—health systems are seeking innovative ways to curb unnecessary costs. One key area of focus? Clinical waste—avoidable medical services that drive up expenses without improving patient outcomes.

MultiCare Health System, a 13-hospital network based in Washington, has successfully tackled this challenge using AI-powered clinical decision support (CDS) tools. Partnering with health tech company IllumiCare, MultiCare has reduced unnecessary lab tests and medication orders, saving $2.5 million while maintaining care quality.

What is Clinical Waste?

Clinical waste refers to unnecessary medical services—such as redundant lab tests, excessive imaging, or inappropriate prescriptions—that inflate costs without benefiting patients. Studies show:

• Most hospitalized patients receive unnecessary tests on their first day.
• 28% of antibiotic prescriptions are unwarranted (CDC).

Dr. Arun T. Mathews, MultiCare’s Regional Chief Medical Officer, explains:

“A patient doesn’t always need a daily blood draw. The extra data may not help—and could even harm them.”

How MultiCare is Cutting Waste with AI

MultiCare deployed IllumiCare’s Smart Ribbon, an EHR-integrated CDS tool that:

• Uses machine learning to analyze patient history, treatment efficacy, and costs.
• Provides real-time recommendations when clinicians place orders in Epic EHR.
• Interrupts workflows only when a more cost-effective, equally effective alternative exists.

Key Features:

✔ Passive vs. Active Alerts – Clinicians receive contextual nudges (e.g., switching from IV to oral meds when appropriate).
✔ Automated Order Adjustments – If a doctor accepts a recommendation, the system updates the order automatically, reducing cognitive load.
✔ Shared Savings Incentives – Physicians earn performance bonuses for adopting cost-effective practices.

Overcoming Adoption Challenges

Initially, clinicians ignored alerts, seeing them as extra work. MultiCare’s solution?

1. Interviewed physicians to understand barriers.
2. Created a quality metric rewarding doctors for engaging with CDS suggestions.
3. Proved no negative impact on patient satisfaction or readmissions.

Result:

• 85–85–90 saved per physician per admission.
• $2.5M in total savings since rollout.

The Bigger Picture

While cost savings matter, patient care remains the priority. As Dr. Mathews notes:

“The real win? Fewer unnecessary needle sticks, faster IV-to-oral transitions, and a better patient experience.”

What’s Next?

MultiCare plans to expand the tool systemwide, proving that smart analytics + clinician engagement can reduce waste without sacrificing care quality.

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Advanced analytics in healthcare leverages data to identify and address inefficiencies, ultimately reducing clinical waste by optimizing resource allocation, streamlining operations, and improving patient care, leading to cost savings and better outcomes. 

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Key Takeaway:
By combining AI-driven insights with physician incentives, health systems can cut waste, lower costs, and keep patient care at the forefront.