Measuring the ROI in Patient Safety

Reporting

Measuring the ROI in Patient Safety

Reporting

Donna Scott, RN, BSN, MBA, CPHQ, LHRMDonna Scott, RN, BSN, MBA, CPHQ, LHRM

What is a Medical Error?What is a Medical Error?

• Adverse or Sentinel Event• Near Miss or Close Call• Adverse or Sentinel Event• Near Miss or Close Call

What Do We Know about Medical Errors?

What Do We Know about Medical Errors?

• A leading cause of death• More common than we thought• Preventable• More surgical than medication-based • A system problem• Costly• A greater awareness by the public

• A leading cause of death• More common than we thought• Preventable• More surgical than medication-based • A system problem• Costly• A greater awareness by the public

• 44,000 to 98,000 deaths per year• $37.6B in costs per year*• Preventable mistakes cost $17 to $29 billion per year*• Medical errors consume 10-15% of a hospital’s annual

operating budget

• 44,000 to 98,000 deaths per year• $37.6B in costs per year*• Preventable mistakes cost $17 to $29 billion per year*• Medical errors consume 10-15% of a hospital’s annual

operating budget

70% of Medical Errors are Preventable

Potentially Preventable

Unpreventable

70%

24%

6%

70%

24%

6%

PreventablePreventable0

100000

200000

300000

400000

500000

600000

700000

800000

Ann

ual D

eath

s

Heart Disease

Cancer

Stroke

Lung Disease

Medical Erro

rs

Diabetes

Pneumonia

Alzhemer'

s

Kidney Disease

Medical Errors are a Leading Cause of

Death

*IOM Report 1999

The Patient Safety CrisisThe Patient Safety Crisis

$0

$10,000

$20,000$30,000

$40,000

$50,000

$60,000

BloodInfection

Hospitalacquiredinfection

FailedIncision

Pneumonia ADE

Event Cost of Common Preventable Errors

*Brigham and Woman's Hospital** The Pennsylvania Health Care Cost Containment Council, 2005***1.6 Million Admission Analysis, MedMined, Inc. September 2006

•• Preventable Medication Errors Preventable Medication Errors –– Occur in 2% of admissions*Occur in 2% of admissions*–– Increase hospital cost by $4,700 per admission Increase hospital cost by $4,700 per admission –– Cost providers $2 billion annuallyCost providers $2 billion annually

•• Preventable Hospital Acquired Infections **Preventable Hospital Acquired Infections **–– 7.5 per 1000 admissions7.5 per 1000 admissions–– 15.4% or 1,793 of these patients die15.4% or 1,793 of these patients die–– Additional 205,000 days of careAdditional 205,000 days of care–– $2 billion in additional charges to payers$2 billion in additional charges to payers

The Patient Safety CrisisThe Patient Safety Crisis***1 in every 20 hospitalized patients acquire infections

Greater than 50% of the $17 - $29 billion national cost associated with medical errors is preventable.

Source: Thomas EJ, Studdert DM, Newhouse JP et al. 1999. Costs of medical injuries in Utah

and Colorado. Inquiry. 36:255-64.

Greater than 50% of the $17 - $29 billion national cost associated with medical errors is preventable.

Source: Thomas EJ, Studdert DM, Newhouse JP et al. 1999. Costs of medical injuries in Utah

and Colorado. Inquiry. 36:255-64.

Major OpportunityMajor Opportunity

When is Good Performance Good Enough?

When is Good Performance Good Enough?

• If we were 99.99% accurate, we would still experience: – 2 unsafe plane landings per day at O’Hare

Airport – 500 incorrect surgical operations each week– 50 newborns dropped at birth by doctors

daily – 32,000 missed heartbeats per person, per

year – 200,000 documents lost by the IRS this year

• If we were 99.99% accurate, we would still experience: – 2 unsafe plane landings per day at O’Hare

Airport– 500 incorrect surgical operations each week– 50 newborns dropped at birth by doctors

daily– 32,000 missed heartbeats per person, per

year– 200,000 documents lost by the IRS this year

1 Significant29 Minor/Major

300 Near Miss/No Harm**Heinrich Ratio

• 1:28:30 – Prior to implementation• 1:26:100 – Year 2• 1:29:150 – Year 3• 1:30:500 – Year 5• 1:30:1500 – Year 8

• 1:28:30 – Prior to implementation• 1:26:100 – Year 2• 1:29:150 – Year 3• 1:30:500 – Year 5• 1:30:1500 – Year 8

Harm Ratio Evolution in Study Site Harm Ratio Evolution in Study Site

0

10

20

30

40

50

60

Event Report Rate Per 1,000 Adjusted Admissions

Event Report Rate Per 1,000 Adjusted Admissions

Measurement ApproachMeasurement Approach

• “The more information you flush out, the more you learn about the vulnerabilities in your system”

• Martin J. Hatlie, JD, founding Executive Director, National Patient Safety Foundation

• “The more information you flush out, the more you learn about the vulnerabilities in your system”

• Martin J. Hatlie, JD, founding Executive Director, National Patient Safety Foundation

ROI Initial Study MethodsROI Initial Study Methods• Total cost of care for (DRG, severity adjusted)

patients with error/event less total costs care for all patients in same DRGs.

• May under estimate reductions since reference group includes all patients --- those with and without a medical error/event.

• Algorithm built within a reporting software system

• Total cost of care for (DRG, severity adjusted) patients with error/event less total costs care for all patients in same DRGs.

• May under estimate reductions since reference group includes all patients --- those with and without a medical error/event.

• Algorithm built within a reporting software system

Improvement AreaImprovement AreaNumber of Number of Reported Reported

EventsEvents

Average Average Additional Additional

LOSLOSAdditional Additional Cost/EventCost/Event

Annual Annual Additional Additional

CostCost

Medication Errors 865/ year 1.8 days $1,022 $510,824

Patient Falls 610 / year 2.2 days $889 $484,816

Pressure Ulcers (Stages I – IV) 399 / year 4.63 days $2,644 $628,962

Hospital-Acquired Infections 381/ year 4.06 days $2,723 $936,671

Total Identified Cost Savings OpportunityTotal Identified Cost Savings Opportunity $2,561,273$2,561,273

*450 Bed Community Hospital

ROI Analysis FindingsROI Analysis Findings3 Year Study3 Year Study

ROI Initial Study ResultsROI Initial Study ResultsStudy Results for Year 3Study Results for Year 3 All Payer Cost AvoidanceAll Payer Cost Avoidance Medicare Cost SavingsMedicare Cost Savings

$$ Additional Additional DaysDays

$$ Additional Additional DaysDays

Medication Events $155,435 373 $53,667 75

Total Falls $196,006 470 $108,518 213

Total Skin Events $268,652 367 $131,350 42

Nosocomial Infections $591,968 905 $252,404 339

TOTAL inpatient cost TOTAL inpatient cost avoidance from 4 avoidance from 4 areasareas

$1,212,061$1,212,061 2,1152,115 $545,940$545,940 669669

Additional Cost of Care

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

0 5 10 15 20 25 30Over 30 Months

Additional Days of Stay

0200400600800

10001200

0 5 10 15 20 25 30

Over 30 Months

Additional Cost of Care Declined 2.2% per Month Additional Cost of Care

Declined 2.2% per Month

Total Claims by year

Trend in Medical Malpractice Claims

Trend in Medical Malpractice Claims

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

24 Month Date Range

Fall

Rate

per

100

0 Pt

Day

s

Patient Falls Rate per 1,000 Adjusted Patient Days

Patient Falls Rate per 1,000 Adjusted Patient Days

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

Medication Events Rate per 1,000 Adjusted Patient Days

Medication Events Rate per 1,000 Adjusted Patient Days

Follow Up StudyFollow Up Study

• Focus review of reimbursement for inpatient cases having a Medication Event in 2006 for Respiratory Diagnoses only

• 42 of 1710 inpatient respiratory diagnoses patients (2.4%) had reported Med Events during that period

• 26 of 42 (61%) were possibly preventable

• ROI Findings:– All Med Events that were reported as moderate to severe

showed more total cost than estimated reimbursement

• Focus review of reimbursement for inpatient cases having a Medication Event in 2006 for Respiratory Diagnoses only

• 42 of 1710 inpatient respiratory diagnoses patients (2.4%) had reported Med Events during that period

• 26 of 42 (61%) were possibly preventable

• ROI Findings:– All Med Events that were reported as moderate to severe

showed more total cost than estimated reimbursement

• “The number one cause of medical mistakes is not incompetence but confusion”

• Michael Milleson-author- Demanding Medical Excellence: Doctors and Accountability in the Information Age

• “The number one cause of medical mistakes is not incompetence but confusion”

• Michael Milleson-author- Demanding Medical Excellence: Doctors and Accountability in the Information Age