how to remove millions in unnecessary healthcare costs with quality & safety tools
TRANSCRIPT
Strategies for …
Removing Millions in Unnecessary Costs
John Byrnes, MD
Clinical Associate Professor MSU, College of Human Medicine
Founder & Sr. PartnerByrnes Healthcare Group
What’s Going On in Our Hospitals?
Findings supported by Classen and Leape. PAE: Preventable Adverse Events
440,000 Deaths per Year“PAEs account for “roughly
one-sixth of all deaths that
occur in the U.S. each year.”
Sources:))James,)J,)“New,)Evidence6Based)Estimate)
of)Patient)Harms)Associated)with)Hospital)Care,”)
Journal(of(Patient(Safety,)September)2013.H
H
–The Advisory Board Company, Sept. 24, 2013
“Medical Errors May Be the Country’s Third Leading Cause of Death”
Answer: High Reliability Organizations
A Culture of SAFETY
Used with permission, HDVCH, Spectrum Health
Errors Resulting in Patient Harm
Safety Culture Transformation + HRD
76% reduction at 2 years
Over 90% reduction at
4 years
High
Safety Culture
Ignites Hospital TurnaroundBefore – mired in controversy and almost closed by the community
No harm events in over 835 days
Top 100 Hospital last three years in a row
–Joseph J. Fifer, FHFMA, CPA President & CEO, HFMA
“Quality and Safety (and their related process improvements) is the next frontier of cost
management.”
PROCESS IMPROVEMENTLean, Toyota, Six Sigma
Lean QI Initiative - CV Service Line
Cardiac Cath Lab
Savings = $6.7 million
On time startsThroughput & room turnoverOpen and unused supplies ($3M)Preference card variationNon indicated add-on proceduresNumber of stentsAppropriateness
Medication Administration Process
125 Process Steps Before < 25 Steps After
Disclaimer, AKA The Fine Print
All calculations performed by the Director of Decision Support, assorted financial analysts, and verified by a Chief Financial Officer.
No calculations performed by this doctor person.
$68,000,000
Clinical QI Can Remove $MILLIONS in Unnecessary Costs
IMPACT at One Hospital
Revenue$32 Million
Savings$36 Million
Total = $68 Million Hospital Margin $74 Million
Study on select conditions through November, 2008; Pediatrics, ICUs, Trauma not included.
$32 Million Revenue Impact
❖ ABC Health P4P Plan $ 4,274,211
❖ XYZ P4P Plan 19,663,131
❖ CMS Market Basket Update* 8,107,477
❖ TOTAL $ 32,044,819
*Now VBP + >50% upside
Eliminating ComplicationsSaved $36 M
Study on select conditions through November, 2008; Pediatrics, ICUs, Trauma not included.
Average Costs of Common Complications
❖ Decubitus Ulcer $28,272
❖ Post-op Deep Wound Infection $27,814
❖ Clostridium Difficile Colitis $25,401
❖ Sepsis $23,451
❖ Reopen Surgical Site $19,442
❖ Venous Thrombosis $15,976
❖ Pulmonary Embolism $16,331
❖ UTI $ 9,637Richard Fuller, Elizabeth McCullough, Mona Bao, Richard Averill, Estimating the Costs of
Potentially Preventable Hospital Acquired Complications, Health Care Finance Review, Summer, 2009, 30:17-‐‑32
PCI Cost Opportunity ReportOver 50
Templates
The Role Finance Can Play in Saving $$$ on Reporting Systems
How you can help your clinical partners
❖ Use internal cost accounting system❖ Internal analysts build clinical profiles❖ Design model to quantitate savings❖ Perform cost opportunity analysis❖ Co-present results with CMO/CQO❖ Do it yourself with existing internal
resources
Strengthen your clinical reporting program by tossing your clinical reporting vendor
DVT $180,000
ARF $820,000
Abcess $75,000
Int. Obstruction $545,000
Acc. Op. Laceration $203,000
Resp. Failure $971,000
Wound Infection $260,000
TOTAL $3,054,000
Physician Leaders Save Money
A Quarter Time Physician Leader• Episode of Care: Colon Surgery
• 7 Preventable Complications
A small group of physician leaders can remove $ Millions in unnecessary costs
Hospital Acquired Infection RatesAdult Critical Care - 2008 to 2009
MRSA, Acinetobacter, Pseud/Sten/Serratia, and C. diff Infections
0
5
10
15
20
Jan 08 - Dec 08 Jan 09 - Dec 09
Infection Rate per 1000 Pt. Days
42% Decrease 126 Fewer Patients
126 x $14,000 = $1.8 M
Hospital Acquired Infection Rates - 2008 to 2009 Children’s Hospital
HDVCH HA MRSA, VRE, ESBL/Amp C, C. diff, and RSV
0
0.5
1
1.5
2
Jan 08 - Dec 08 Jan 09 - Dec 09
Infection Rate per 1000 Pt. Days
46% Decrease 40 Fewer Patients
Combined Results166 x $14,000 = $2.3 M
The Intervention Was ___________________
Preventing Readmissions - Total Cost of Care
Hysterectomy 6.7% to 3.8% $ 42,000
Hysterectomy CA 4.5% to 10.6% $ 153,000
Lumbar fusion 5.4% to 4.2% $ 830,000
Peds Chemo 9.9% to 8.3% $ 685,000
AMI 12.7% to 8.3% $2,085,000
PCI 8.2% to 5.3% $ 618,000
EP Ablation 4.1% to 3.3% $ 56,000
Cholecystectomy 6.9% to 3.9% $ 50,000
TOTAL $4,519,000
Clinical QI Can Remove $MILLIONS in Unnecessary Costs
Prevent Readmissions
Majority of Readmissions:1. Didn’t fill prescriptions2. Didn’t get timely follow-up3. Care coordination
Opportunity Analysis - 10 Years LaterClinical QI Can Remove $MILLIONS in Unnecessary Costs
$45,000,000 Remaining Opportunity
Opportunity Analysis
How Much Potential Savings (Waste)?❖ Small Multi-Hospital System❖ Observed to Expected Complication Rate❖ >2,000 Complications❖ >$60,000,000
Clinical QI Can Remove $MILLIONS in Unnecessary Costs
3 High-Impact Tools
Save LivesSave $
SAFETY - High-Reliability
Clinical QI Performance Improvement
$68,000,000
$60,000,000
$45,000,000
$4,500,000
$66,800,000
$3,054,000
$2,300,000
$6,700,000
Summary of Savings:
$ MillionsOne hospital: cost + additional revenueSmall hospital system - complicationsOpportunity after 10 years - one hospitalReadmissions preventedMalpractice claim impact of HRO programColon Surgery - 7 ComplicationsHospital Acquired Infections - one hospitalCath LabTOTAL $256,354,000
Key Points
❖ Part time physician leader ROI is +
❖ Data - you already have everything you need
❖ Copy the finance process
❖ One program - Cost, Quality, Safety, Efficiency
❖ Take a leadership position
❖ Biggest returns - Variation, complications, errors
Ask Your CMO/CQO
❖ Which complications have your targeted ?
❖ Have a list of high-volume complications (and their associated cost impact) in your pocket to start the conversation …
Everyday, Remember Why You’re There …They Entrust Us With Their Lives, Let’s Not Let Them Down !
Improving Quality & Safety Together
Resource Page: www.johnbyrnesmd.org/hrtcfos
John Byrnes MDTrainer, Consultant & Keynote Speaker
Founder, Sr. PartnerByrnes Healthcare Group
Phone [email protected]