Data as the Catalyst for Cost Reduction and New Care Models Health Care Insight Paper

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1 Data as the Catalyst for Cost Reduction and New Care Models Health Care Insight Paper Why the Urgency? A recent Forbes article estimated the spend for U.S. health care in 2013 hit $3.8 trillion. In a national effort to tackle these costs, legislative mandates such as the Affordable Care Act (ACA) and the Health Information Technology for Economic and Clinical The term data is used 532 times in the ACA and technology is used 82 times. Health (HITECH) Act are requiring the health care industry to adopt significant clinical and business model changes. Health care is responding in hopes it will offset associated declines in reimbursement. The legislative mandates are also bringing information technology into sharp focus. In no other industry has technology - particularly data - been called upon to play such a significant role in today s transformation of health care. Community Hospitals Shifting Strategies These dramatic changes are forcing health care providers to transform how they operate. Forty percent of community hospitals plan to employ more than half of their referring primary care physicians over the next two years, according to research conducted by management consultancy Kurt Salmon and the Community Hospital 100 Leadership & Strategy Conference. The researchers found that hospitals pursue physician alignment for different reasons that break down by size: small, rural hospitals use it as a referral growth strategy, while large urban hospitals treat it as part of their risk-based payments preparation and population health management strategies. Focus is on Integrated, Coordinated Care On the patient care side of the equation, these industry changes are creating the need for greater clinical integration, and health care organizations of all sizes and types are rapidly adopting this strategy and for good reasons. Clinical integration has been shown to improve the quality of patient care and reduce per capita costs, all while providing better care coordination. Clinical integration offers both hospitals and physicians the opportunity to coordinate patient interventions, manage quality across the continuum of care, move toward population health management and pursue true value-based contracting. You could argue Mercy's best investment was the finest electronic health record we could implement, and setting an aggressive timeline for training and utilization. But I believe the most important investment we made was the clinical integration of our physicians. Without them being on the Mercy team, our other efforts wouldn't make much of a difference. Lynn Britton, CEO, Mercy

2 While the path to clinical integration remains complex, one necessary component is to build a platform for hospital-physician collaboration that is flexible enough to support a broad range of possible futures. This includes focusing strategies on a data platform and investing in information technologies that support coordination of care. Sources: Centers for Disease Control and Prevention. Chronic Disease Overview: Costs of Chronic Disease. Centers for Disease Control and Prevention Web site. Available at Accessed July 24, Partnership for Solutions. Chronic Conditions: Making the Case for Ongoing Care, September 2004 Update. Partnership for Solutions Web site. Available at Accessed July 24, 2007.http://www.justfacts.com/healthcare.asp#spending-age. 2

3 Clinical Integration Centers on a Patient Data Platform Gaps in patient information mean gaps in patient care. Coordinated care requires coordinated data to manage costly chronic illnesses. In order to manage the health of their populations and meet ACO model guidelines, hospitals, health care systems and physician groups must adapt to a new world in which providers are rewarded for meeting quality objectives for their entire patient population not just those patients actively seeking health care. Serving these chronically ill patient populations and managing their illnesses requires comprehensive data. The electronic health record (EHR) is not merely an application, but a powerful data platform from which future care models get their legs. Recognizing this, providers are moving away from multiple EHRs that cater to individual service lines (i.e. inpatient, ambulatory, oncology, pharmacy, lab, etc.). Instead, providers are adopting a single, consolidated patient record system across all service lines and throughout the health system, connecting all care providers with the same information. For a patient with a chronic illness who receives care from multiple providers, this coordination becomes critical in addressing any gaps in care. Aside from clinical integration, a common patient data platform can also serve as a gateway for Health Information Exchange (HIE). An HIE can increase data sharing capabilities between disparate EHR systems, extending the interoperability of your EHR software, so providers have relevant patient information when they need it. When organizations share information, patients can access care faster and benefit from greater data coordination. For clinical data to be of optimal use, the EHR must be fully adopted and providers need to use it to its fullest extent. Often this goes hand in hand with system optimization and the usability and performance of the provider s EHR software. To reap the long-term value and benefits from the A 2014 HIMSS Analytics study reveals that hospitals with advanced EHR capabilities demonstrated significantly improved actual mortality rates, most notably for heart attack, respiratory failure, and small intestine surgery. 3

4 EHR data platform, provider leaders should take a structured approach that includes governance, user input and prioritization for their EHR optimization and workflow enhancements. Standardizing, Automating and Accelerating Long-term Strategies The most successful organizations are those that have used their EHR as a foundation, first for unifying patient information, then for longer-term strategies of implementing process change and complementary technologies such as business analytics and clinical decision support to achieve improved outcomes and reduce costs. Process change in the form of care pathways built into the EHR are one mechanism for reducing unnecessary variations and delivering quality care with a higher degree of standardization and productivity across an organization. These care pathways should be rooted in the best and most current clinical evidence with the intent to automate any normative clinical processes, thereby reducing variation and providing predictable outcomes and costs, especially as they relate to common and costly chronic illness. Integrated Patient Data Bridging the Divide for Coordinated Care While the EHR has become the cornerstone to better coordinated patient care, it can no longer suffice as the single source of patient data. With more and more patients getting their health care needs met in a variety of settings, patient data is much more scattered and segregated. Industry experts expect the declining inpatient volume trend to continue through the rest of 2014 and beyond, according to Health Finance News One reason for the continued decline is the shift of care to outpatient settings like retail clinics. For example, a patient presents at a hospital to get his blood sugar tested; then goes to a health screening and gets an ultrasound; later he drops in at Walgreens for a flu shot and subsequently goes to the VA for a lab test, before returning to his physician s office. All of these care events create a disparate patient record. Coordinating that information is becoming more critical, especially when caring for patients with chronic conditions. ACOs center largely on coordination of care across settings and population management for patients with chronic conditions. For the greatest level of coordinated care, a data strategy is required that addresses the need for EHR data and external sources of patient data, including claims data and other relevant patient information. 4

5 For that data strategy to be comprehensive, it must include the ability to clean up and validate patient data and ensure quality for decision making confidence. With a strong governance structure representing clinical and technology, rules and requirements need to be defined to determine how the data is to be formatted and delivered, and analytics and algorithms performed so it can be translated into action. Big data could help the U.S. save as much as $450 billion in health care costs, but fundamental change is necessary to meeting such goals, according to a new analysis by consulting firm McKinsey & Company. Clinical Analytics at the Point of Care Analytics have the greatest impact when they are intuitive, actionable and at a provider s fingertips when they need it. More often than not, however, providers have to go to a separate reporting or analytics tool to get additional patient insight. Or worse, providers have to request a report that may take days or weeks to receive. With real-time analytics embedded in the clinical workflow, not only does it boost productivity; it is a game-changer for informed clinical decisions, quality and ACO reporting and population-focused health care. Cost Reduction and Performance Acceleration through Analytics Health care reform has created an environment in which health care providers must begin to understand what is happening within their organization. Improving performance and reducing costs require that providers have insight into their operations and a clear understanding of their expense and performance data to make impactful change. To address performance and reduce waste, providers will need analytics that look at clinical and financial data together to fully understand costs and outcomes. That means combining EHR data with data from enterprise resource planning (ERP) software and other internal and external sources. 5

6 Once the diverse source data is collected, the challenge becomes organizing the data so that it is uncluttered and can answer specific questions about a particular service line, making it meaningful to the audience consuming it. Using service line data marts is one way to organize large amounts of data in an organization for a structured view into health care operations. Business Intelligence at the Speed of Thought Designing business intelligence tools begins with the audience in mind and exploration as the ultimate goal. Too often, users are waiting on a report that lacks intuitiveness and is without the dynamic ability to be explored in-depth when there are multiple questions related to the data. With a governance approach to business intelligence, the service line leader(s) define the data points to be displayed - from summary level to detail including data points that require additional discovery, and the information is accessed via custom dashboards that are integrated in the workflow. Using this method, anyone in a provider organization can approach the data with a question and get the answer as the question arises, making analysis immediate, intuitive, explorative and based in evidence. With these kinds of analytics at-the-fingertips, providers can quickly identify factors such as cost, utilization and outcomes, and get the comparative detail to help identify and reduce waste, eliminate variance, improve quality and lower costs. Growing Transparency on Performance Data as the Enabler to Compete Data may not only help providers improve care and controls costs, it may help them survive in the brave new world where consumers have more options and decision power when choosing health care services and providers. Consumers will be paying more attention to objective data on costs and outcomes, in addition to the traditional friend and family recommendations. Data on provider pricing, procedure costs and outcomes will become more available to consumers on the internet and from their payers. Providers must increasingly have access to their own performance data on costs and outcomes, given how this data may affect potential patients behavior. For more information, please visit mercytechnology.net About the Authors: Gil Hoffman, chief information officer, Mercy Jim Best, vice president of Integration Management, Mercy Curtis Dudley, vice president of Performance Solutions, Mercy Mercy is the fifth largest Catholic health care system in the U.S. and serves millions of people annually. Mercy includes 33 acute care hospitals, four heart hospitals, two children s hospitals, three rehab hospitals and one orthopedic hospital, nearly 700 clinic and outpatient facilities, 40,000 co-workers and more than 2,000 Mercy Clinic physicians in Arkansas, Kansas, Missouri and Oklahoma. Mercy also has outreach ministries in Louisiana, Mississippi and Texas. For more about Mercy, visit and for specific information about Mercy s technology services, visit 6

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