Using Quality Metrics to Create and Distribute Savings in a Global Payments Environment
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1 Using Quality Metrics to Create and Distribute Savings in a Global Payments Environment Illinois HFMA August 20, 2012 A member of Verras Healthcare International
2 Clinical Case Management Four Focus Areas 1. Clinical and Operational Practice Pattern Variations Estimated cost savings opportunities Identify Clinical & Operational Variations 2. Identifying Documentation Integrity Issues Reducing: Clinical Variations Verras targets physicians documentation issues 3. Individual MD Clinical Practice Pattern Variations Individual MD and Group Best-Practices Create explicit monitors for Case Management Data-driven CPOE and Order Set optimization 4. Integrated Cost and Quality Performance Scoring Quarterly Cost Savings Reports Preparing for Global Payment Distributions 2
3 Verras Sherlock and Watson Creating Change Requires Data Deep Dives VERRAS SHERLOCK Identifying your internal Best Practices 3 years all patient data By hospital, MDC, DRG, Resources and Physician Understanding the magnitude and where Clinical Variation exists Evidence Based analytics Readiness for Performance Management Quality Resource Consumption Patient satisfaction Incentives Plans VERRAS WATSON One-on-one w/ Physicians Live Queries beginning week 1 Education on costs Parallels Best Practices with outliers Case Level deep dives Order Location Time Stamps and Sequencing Primary or Consult Order Set Variation Hospital Processes Case Management Review metrics Hospitalists collaboration and effectiveness Vendor management Policies and Protocols 3
4 Estimate Financial Opportunities Identifying Potential Savings by Service Lines From DRG to Service Line 4
5 FOCUS 1: Clinical and Operational Practice 3 Years of All Payer Data Pneumonia Patients: Age Gender Principle diagnosis Secondary diagnoses Procedures $64,337 $111,685 $30, TOTAL CHARGES $12,848 $18, LENGTH OF STAY % MORTALITY RATE 2.1% 2.1% 5.0% 12.6% ACUITY / SEVERITY INDEX 5
6 Verras Best Practice Analyzer Performance versus Severity Adjusted Norms $10 MD1. X DELTA CHARGES PER PATIENT (Thousands) $5 $0 -$5 Lesser Efficiencies Potential Morbidities Greater Efficiencies Fewer Morbidities -$10 MD1. Y DELTA LOS PER PATIENT 6
7 Heart Failure, Variance by AIM 3 Year Study Midwest Medical Center FFY HEART FAILURE & SHOCK 7
8 FOCUS 1: Clinical and Operational Practice 3 Year Trending Ideal Movement from Year 1 to Year 3 $10 $8 DELTA CHARGES PER PATIENT (Thousands) $6 $4 $2 $0 -$2 M1 M2 M3 -$4 -$ DELTA LOS PER PATIENT 8
9 Lg. & Small Bowel Surgery, Variance 3 Year Study Midwest Medical Center FFY o o 569 MAJOR SMALL & LARGE BOWEL PROCEDURES W CC W MAJOR GI DX 9
10 FOCUS 2: Identifying Document Integrity Issues Pneumonia DRGS 193,194, Variance by AIM Score Pneumonia DRGs Midwest Hospital FFY Acuity Comparison 5 Pneumonia with MCC Pneumonia with CC (Hypoxia) Pneumonia without (Cyanosis) 10
11 FOCUS 3: Individual MD Clinical Practice Comparing Doctor s Outliers to his/her own Internal Best Practices Sherlock is used to identify which cases will be analyzed Example for Radiology (show at right) is replicated for all major cost categories Typically 20 best practices and 20 LLQ These cases are entered into Watson s Chart Audit Tool Watson summarizes the variation 11
12 FOCUS 3: Individual MD Clinical Practices Pattern Variations Kidney/UTI using All Payor Data 2011 Detailed clinical feedback is a must to motivate change. - Bill Mohlenbrock, CMO, Verras 12
13 Verras Watson Examining Detailed Areas of Clinical Variation Internal Best Practices: Inefficient Patients: Patients: All Severity level 4 Females ages Some CV History Ejection Fraction 40-45% Atrial Abnormality Treatment Patterns Admitted to Telemetry, not CCU BNP - 3 day protocols 40% use of hospitalists Consults on days 1-2 Serial Troponins 1X CT from ED only General daily Chem Panels Patients 80% Diabetic Renal failure Pneumonia/Respiratory Pacemaker Average LOS: 6 Treatment Patterns Admitted to and Discharged from CCU BNPs and Comp Metabolics - Daily 12% use of hospitalists Consults on day 7 or later Inactivity 4-5 days; all had Monday discharges 4-5 CTs, 38% redundant (consults) Non-related procedures on 55% cases Patients 75% Diabetic Renal failure* TIA, Anemia* Gastroenterology issues* Pacemaker Average LOS: 11.5 * Primary causes for LOS extension Data-driven CPOE and Order Set Optimization 13
14 FOCUS 4: Integrated Cost and Quality Performance Scoring Recent Successes Orthopaedics 22% reduction in implant costs by physician education and vendor watch 9% reduction of CT Scans through voluntary changes with order sets and acknowledgement of ER work ups Annual Savings $2 million Emergency Room New order sets incorporating physician and nursing protocols, allowing physicians to move from 2:1 to 3:1 patient ratios Quality improvements with triage aligning ESI and EM scoring, improving flow to mid-level practitioners and fast tracking Annual Savings $874,000 Cardiology Hospitalists 30% reduction in use of Telemetry for non-cardiac patients using Telemetry scorecards Assisted in customization of CPOE order sets, establishing new internal best practice patterns, resulting in an average 0.7 day reduction for DRG 127 Converted contracts to performance based payment plans Created a new structure to align Hospitalists and Case Manager functions and reduced clinical variation Annual Savings $612, 000 Annual Savings > $1 million Documentation Identified specific areas requiring documentation improvements, avoiding shot-gun approach to physician education Assisted physicians and hospitals to avoid risk of improper documentation with Sepsis and Pneumonia Annual Savings $387,000 14
15 Distributing Bundled Payments: (MSSP, ACO, ACE, Bundled Payments, CO-OPs) Hospitals and Physicians Share A Single Payment Hospital & Physicians Total Payment -Depends on Outcomes of Enterprise Hospital 40% & Physicians 60% Sliding Scale Determines Physicians Distribution Physicians 60% -Cardiology 16% -ORS 11% -Others 43% Each Service s Outcomes Determine Physicians Distributions 15
16 Index of Healthcare Value (IHV-7) Hospital F: 3 year Trends of Seven Performance Scores The Higher the Bar, the Greater the 3 Year Improvements NHQM Pat. S. Mort. Morb. RIV Res. C. ACO M. Total Hospital F 16
17 IHV Example: 8 Hospital ACO/CO-OP (Quality of Care Score) The Higher the Bar, the Greater the 3-Year Improvements 17
18 Example: 8 Hospital ACO/CO-OP Year 1: $10M Savings The Higher the Bar, the Greater the 3-Year Improvements 18
19 Financial Distributions: Year 1, Hospital H = $1.9M 19
20 Physician and Hospital Calculations $10.0M Net Savings Hospital H $1.9M Physician Portion: 50-80% Sliding Scale 20
21 Clinical and Operational Case Mgt. Benefits Benefits of MD Directed: 1:1 and Group physician practice pattern changes Improved Case Management effectiveness AND Without adding new projects Quantify hospital s estimated cost savings and guarantee our fees. Low cost proof of concept with 4 physicians Verras matches data with advisory coaching services We guarantee our operational and clinical case management results Our services are budget neutral We assist CMO with physicians efficiencies using one on one coaching We facilitate removing costs from the hospital s departments First year savings fund a full three years of QA, UM, physician coaching and practice optimization 21
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