Introduction & EHR Benefits Realization
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  • Last line is a negative – change to positive orientation
  • BR is political in nature; also, expectations can vary widely; finely, it may not be a natural exercise for the participants – a VERY structured and systematic methodology is required.

Introduction & EHR Benefits Realization Introduction & EHR Benefits Realization Presentation Transcript

  • Introduction & EHR Benefits Realization David Shiple Practice Leader, Advisory Services Prepared for:November 27, 2012 © 2012 Divurgent. All rights reserved. 1
  • Company at a Glance• Offices: Virginia Beach, Virginia / Dallas, Texas• Clients include: – Integrated Delivery Networks – Critical Access Hospitals – Physician Offices – Community Hospitals – Group Purchasing Organizations – Healthcare Vendors• Industry leading advisory board• 100% Referenceable• Clinical Resources (RN, PT, RPh, MD, NP)• Operational Roles (CFO, COO, CMIO, CIO, CNO)• Proven Methodology – Vendor Selection – Project Management – Meaningful Use Gap Analysis – Clinical Transformation – Change Management – Systems Implementation• Practices: Advisory, Project Management, Activation Management, Revenue Cycle, Clinical Transformation 2 © 2012 Divurgent. All rights reserved.
  • Advisory BoardDivurgent leverages an industry leading advisory board who provides consulting services andguidance on projectsMember Title OrganizationBert Reese Sr. Vice President and Chief Information Officer Sentara HealthCareRobert Blades Independent Consultant IndependentAnn Chinnis, MD Chief Executive Officer Matrix Executive CoachingEugene D’Amore Vice President and Chief Information Officer Shriner’s Hospital for ChildrenCynthia Davis Technology Adoption Strategist IndependentAndy Downing Chief Executive Officer Pinpoint IT ServicesTravis Gathright Chief Information Officer Magee Rehabilitation HospitalJohn Gomez Chief Executive Officer JGo LabsRichard Howe, PhD Independent Consultant IndependentBeth Lindsay-Wood Sr. Vice President and Chief Information Officer Tampa General HospitalBraxton McKee Attorney Kaufman & CanolesStephanie Reel Chief Information Officer Johns Hopkins Health SystemAlbert Sinisi Principal Sinisi Consulting ServicesRick Skinner Vice President and Chief Information Officer Cancer Care OntarioBill Spooner Chief Information Officer Sharp HealthCareLaishy Williams-Carlson Chief Information Officer Bon Secours Health SystemEric Yablonka Vice President and Chief Information Officer University of Chicago Medical Center 3 © 2011 DIVURGENT. All rights reserved.
  • Advisory Team• Our Advisory Services team is comprised of seasoned HIT consultants with a proud history of being trusted advisors to CIOs• Includes former CIOs, career consultants, subject-matter experts, researchers, and clinicians• Experts in IT strategy, Meaningful Use, Benefits Realization, Infrastructure Optimization, and other challenges/ opportunities facing the CIO• Practice credentials include Lean Sigma, Baldrige, Studer, ITIL, and advanced degrees (MHA, MBA, MEd, etc.) 4 © 2012 DIVURGENT. All rights reserved.
  • Service OfferingsDivurgent’s Advisory Services practice provides a broad range of strategicservices to health system executives across the U.S. and Canada. Eachservice domain is backed by a proven methodology and best practicesresearch. • IT Strategy • Interim Leadership • Benefits Realization • Vendor Selection • IT Assessments • Benchmarking/ Best Practices • Meaningful Use Studies – Gap Analysis/ Planning • Total Cost of Ownership – Program Management • Shared Services • Clinical Integration • mHealth – Virtual Integration • Retail Strategy – HIE Planning/ Design • Consumerism • Analytics/ Business Intelligence 5 © 2011 DIVURGENT. All rights reserved.
  • Benefits Realization 6 © 2011 DIVURGENT. All rights reserved.
  • Executive Summary• Hard dollar ROI on EHRs is very real, however, takes planning and diligence to evidence the savings• Health systems engage in benefits realization exercise for many reasons – it is very imperative to understand the true intent of your health system• The number of EHR benefits are almost limitless – focus on a manageable number that are of high value and easy to evidence• There are several types of benefits that should be documented: Hard ROI, Soft ROI, Intangible Benefits, and Strategic Benefits• Benefits realization exercises can become overly political, complex, and time-consuming – using a systematic approach is required• Operational accountability is absolutely necessary to realizing and sharing benefits• Expected benefits can be hardwired to organizational operations and should be leveraged into overall organizational strategic plan © 2012 Divurgent. All rights reserved. 7
  • EHR Benefits are Real • 91 minute wait time reduction in the ED • 50% improvement in ED to inpatient bed arrival • $4.9 million savings due to adverse drug event reduction • $7 million/ year reduction in unreimbursed cost for MRIs and other imaging • Saved 296 hours per month by replacing manual pre-approval phone calls • Transcription costs have decreased $170,000 or 34% since go-live • Avg. nursing premium pay has decreased by 38% • Measured $42.6 million in benefit in first two years after going live • Estimated “break even” in 4-5 years • Improved staff efficiency and reduced variation in practice • Reduction of 65 FTEs • Nearly $1 million in savings related to reduced length of stay in 6 months • Now preventing 200+ infections/ year, saving $5.1 million annually • Reduction of 47 FTEs ($2.5M) • Administrative expense Reductions ($.6M) • Pharmacy medication waste reductions ($2.0M)Examples of EHR benefits – when totaled for a given health system, can add up to real money © 2011 DIVURGENT. All rights reserved. 8 © 2012 Divurgent. All rights reserved.
  • The Sentara Story• Senior management commitment from day one• Long-time tradition of being focused on financial outcomes• Process owners engaged as soon as software purchased• Initial metric signup based on industry best practices• Bonuses built into realizing benefits• Redesigned 18 major processes covering entire continuum of care using lean six sigma Sentara seems to have “cracked the code” of EHR ROI• Bi-weekly meetings to – carefully orchestrating a well-known ROI realization ensure benefits were story achieved © 2012 Divurgent. All rights reserved. 9
  • Ask, and You Shall Receive• Asking operational owners for capturing benefits is important for several reasons – An culture of ownership begins with owning enterprise investments – and extracting the value of those investments – Some benefits may be difficult to attain, but if not called expected by senior management, benefits are guaranteed not to materialize – Will be difficult to ask operational owners for support (e.g. nursing time) if they have not truly bought into value proposition• A benefits realization exercise forces operational leaders to ask – Why are we making this investment? – What benefits do we expect to achieve? How will we measure them? – How can we be good stewards of our health system’s investment?• If the answer to the question “what is going to change with a new EHR?” is “don’t know” – or “ask IT, they’re driving it” – There’s a bigger problem at hand – Points to a need to shift to a culture of “IT ownership” An EHR is only a tool, albeit an expensive one – however, implemented correctly the payoff of the tool reserved. be substantial © 2011 DIVURGENT. All rights should 10 © 2012 Divurgent. All rights reserved.
  • Drivers of Benefits Realization• Prior to EHR implementation a rigorous plan is required – including process redesign – to get full benefits realization• Evidence hard ROI offsets to the costs of the EHR• Establish ownership and accountability necessary to realize value from the EHR• Demonstrate to stakeholders they achieved benefit from investing in the EHR• Demonstrate the broader value of the EHR (e.g. the EHR positioning the organization for healthcare reform)• Make the business case to a wavering stakeholder group evidencing that a new EHR is the right thing to do It’s important to be clear on the intent of a Benefits Realization endeavor – the drivers (or combination of drivers) are many © 2012 Divurgent. All rights reserved. 11
  • Typical Areas of Benefit Source: HFMImproved clinical outcomes Decreased cost of record storage Improved patient flowReduced process variation Reduced costs of data collection Reduced drug use and costsReduced order turnaround time Reduced redundant testing Reduced use of other resourcesIncreased use of preventative care Reduced payment denials Reduced lengths of stayImproved documentation quality Improved quality of coding Nursing staff time savingsIncreased direct patient care time Improved charge capture HIM workload, staff reductionsImproved Information availability Increased net revenues Pharmacist time savingsIncreased patient safety Increased reimbursement Decreased cost of paper formsReduced ADE incidence Increased performance payments Decreased transcription costsReduced med error incidence Improved regulatory compliance Increased patient satisfactionReduced complications of care Increased patient volumes Improved physician satisfactionIncrease patient chart legibility Increased efficiency Improved staff satisfaction Areas of potential EHR benefit are almost limitless – the “art” is selecting the 2011 DIVURGENT. All rights reserved.measure © right metrics to 12 © 2012 Divurgent. All rights reserved.
  • A Systematic ApproachOne possible approach is to focus on theBenefits that can be most readily evidencedin Peer Reviewed Literature [1] Thompson DI, Classen DC, Haug PJ EMRs in the Fourth Stage: The Future of Electronic Medical Records Based on the Experience at Intermountain Health Care, JHIM, Summer 2007. © 2012 Divurgent. All rights reserved. 13
  • Follow the MoneyDivurgent often recommends focusing on the high returns (and mostreadily evidenced) first:• Reducing Average Length of Stay• Reducing Transcription Costs• Better Documentation – Better Reimbursement• FTE Reduction• Reducing Readmissions © 2012 Divurgent. All rights reserved. 14
  • Types of Benefits Type Example ImplicationHard ROI Decrease in transcription Direct cost off-set to EHR costs; can be tied cost directly to budgets; usually endorsed by CFOSoft ROI Most time available for Measurable, but does directly affect bottom line nursing at the bedsideIntangible Chart available to Very important, but can be elusive to measure –Benefits everyone, anywhere, observe closely and benefits can be articulated; anytime also includes benefits not even yet understood during EHR 1.0 rolloutStrategic Ability to manage Possibly the most important – enabling the nextBenefits patients across generation business model (ACOs, “Systemness”, continuum of care vertical integration, etc.) and other health system strategic goalsA good Benefits Realization story after an EHR implementation includes hard and soft ROI, and intangible and strategic benefits © 2012 Divurgent. All rights reserved. 15
  • Linkage to HC ReformEHR’s have a direct, measurable effect on a health system’s ability to react toHC reform and the relentless drive for higher quality/ lower costs • Ability to manage patients/populations longitudinally (enabling ACO’s, risk-based arrangement, bundled payments, etc.) • Ability to reduce readmissions • Enabler for increasing VBP and HEDIS quality scores • Enabler decrease hospital acquired conditions • Driver to decrease utilization costs thru ordersets and supply chain management The linkage to the Healthcare Reform/ reimbursement challenges and EHR Benefits Realization cannot be underestimated © 2012 Divurgent. All rights reserved. 16
  • Benefits Realization Continuum True cost offset realized - Benefits built into validated by CFO operational bonuses Benefits defined w. process transformation requiredReward High-level benefits defined Presentation: Our hard and - w. ownership soft ROI calculations Presentation: We are positioned for the future (intangibles) Rigorous baselining Presentation: We were successfulEHR’s are simply the Challengecost of doing business Health systems are approaching benefits realization of EHR investments in a variety of ways © 2012 Divurgent. All rights reserved. 17
  • EHR BR Methodology Realism -Setting Benefit Goals Benefits Realized Senior Mgt Commitment Clinical Education / Lessons LearnedPoint in EHR Journey End-game Intent Financial Commitment Day Operational Model Starter-set Metrics Realization Rules/ Financial Bonuses Analytics Alignment to Existing Capabilities Accountability Scorecards Process Redesign Needs HC Reform Enablers Hard Soft © 2012 Divurgent. All rights reserved. 18
  • EHR BR Methodology • Senior management sets the cultural tone - how are EHRs viewed? • A necessary evil? Realism -Setting • Just Benefit Goals a tool with no inherent value? Benefits Realized • An investment which should have benefits and ROI? • Does senior management have a vision for the organization with an EHR? Senior Mgt • Has senior management articulated what is expected from the EHR and Clinical Commitment Education / Lessons Learned how the organization will change with it’s EHR? • Have bonuses been tied to EHR benefits realization?Point in EHR Journey End-game Intent Financial • Has accountability for ROI been established? Commitment Day Operational Model Starter-set Metrics Realization Rules/ Financial Bonuses Analytics Alignment to Existing Capabilities Accountability Scorecards Process • Redesignis your health system in this HC Reform Enablers Where Needs EHR journey? • Contract just signed • Design build underway Hard Soft • Rollout begun • EHR is live • EHR 1.0 is live; EHR 2.0 being planned • Point in EHR journey has major affect on your EHR strategy © 2012 Divurgent. All rights reserved. 19
  • EHR BR Methodology • What is the “end-game” of your benefits realization endeavor? Is it to… • Evidence hard ROI offsets to the costs of the EHR? Realism -Setting Benefit Goals Benefits Realized • Establish ownership and accountability necessary to realize value from the EHR? • Demonstrate to stakeholders they achieved benefit from EHR Senior Mgt (post-live)? Commitment Clinical • Demonstrate the broader value of the EHR (e.g. the EHR role in Education / Lessons Learned healthcare reform)?Point in EHR Journey End-game Intent • Make the business case to a stakeholders group evidencing that a Financial Commitment Day Operational thing to do? new EHR is the right Model Starter-set Metrics Realization Rules/ Financial Bonuses Analytics • Is there a starter set ofExistingthat can be used? e.g. Alignment to metrics Capabilities Accountability • Benefits documented from similar implementations Scorecards • Benefits documented from the vendors or user group Process • Metrics already used in monthly performance scorecards Redesign Needs HC Reform Enablers • Metrics documented in original business case • Success metrics used by vendor (e.g. Epic KPI workbook) Hard Soft • Metrics from other facility go-lives • Literature references © 2012 Divurgent. All rights reserved. 20
  • EHR BR Methodology Realism -Setting Benefit Goals Benefits Realized Senior Mgt Commitment Clinical Education / Lessons LearnedPoint in EHR Journey End-game Intent Financial Commitment Day Operational Model Starter-set Metrics • Inventory current analytics capabilities: Realization Rules/ Financial • Legacy EHR reporting Bonuses Analytics • Future EHR reporting Alignment to Existing • Cost accounting Capabilities Accountability Scorecards • Custom data warehouses Process • Population data warehouses Redesign Needs • What is Reform Enablers analytics group? HC the strength of your • Where does current monthly operations objectives reporting come from? Hard Soft • Manually • Electronically • 3rd Parties © 2012 Divurgent. All rights reserved. 21
  • EHR BR Methodology • Can a process redesign régime (e.g. Lean Six Sigma) be employed to build benefits directly into software design? • Where will review/ redesign of key processes have the most impact? • Where has significant re-engineering already taken place? How are the Realism -Setting Benefit Goals benefits of the redesign been measured? Benefits Realized • Where do targeted processes align with vendor/ business case strengths? Senior Mgt • How do targeted processes align with business owners? Commitment Clinical • Arrival Management Education / Lessons Learned • MD ProcessesPoint in EHR Journey End-game Intent • Bed Management Financial Commitment Day Operational Model • Medical Records Starter-set • Case Management Metrics • Meds Management Realization Rules/ Financial • Charge Capture Bonuses Analytics • Monitoring/Recording Capabilities • Alignment to Existing Claims Processing Scorecards Accountability • Order Sets Process • Clinical Communications • HC Reform Enablers Patient Care Transformation Redesign Needs • Disease Management • Patient/Member Satisfaction Hard Soft • Emergency Department • Physician Practice • Home Health © 2012 Divurgent. All rights reserved. 22
  • EHR BR Methodology • Gets everyone on the same page on BR endeavor • Overview of methodology Realism -Setting Benefit Goals building – possibly invite a speaker from • Part momentum Benefits Realized an EHR ROI success story (e.g. Bert Reese, Sentara) • Case studies from other health systems – how they did it Senior Mgt • Intent of this health system Commitment Clinical • Definitions : hard, soft , intangible , future enabler Education / Lessons Learned • Lessons learnedPoint in EHR Journey End-game Intent • Focus on a small number of “big ticket” items Financial Commitment Day Operational • Focus on what can be measured Model Starter-set • Part “Art”, part “Science” • Many benefits do not translate directly into money Realization Rules/ Metrics Financial • Expect push back – “If we acknowledge benefits , you’ll Bonuses Analytics want to reduce our staff” • Splitting hairs between benefits of process changes and Alignment to Existing Capabilities Accountability Scorecards EHR benefits of Process Redesign Needs HC Reform Enablers Hard Soft © 2012 Divurgent. All rights reserved. 23
  • EHR BR Methodology • What is the expected change from a clinical standpoint? • What is the expected change • How will these changes be from an operational Realism -Setting measured/ baselined? Benefit Goals standpoint? Realized Benefits • How are they measured • How will these changes be currently? E.g., measured/ baselined? • Who Senior Mgt owns these metrics? • How are they measured • LessCommitment variation in care Clinical currently? E.g., Education / Lessons Learned • Fewer adverse drug events • Who owns these metrics?Point in EHR Journey • Improvement Intent End-game in quality Financial • Decrease length of stay Commitment Day Operational Model scores • Decrease in transcription • Fewer infections Starter-set costs • Increase in preventative Metrics Realization Rules/ • Decrease in readmission Financial care Bonuses rate • What Analytics is the expected change from a financial • Decrease in cycle times standpoint? Alignment to Existing • Decrease in nursing hours Capabilities Accountability Scorecards • How will these changes be measured/ baselined? • How Process are they measured currently? • Who owns these metrics? E.g.,Reform Enablers Redesign Needs HC • Reduced costs of data collection • Reduced redundant testingHard Soft • Reduced payment denials • Improved quality of coding • Improved charge capture • Increased net revenues • Increased reimbursement 24 © 2012 Divurgent. All rights reserved.
  • EHR BR Methodology Realism -Setting Benefit Goals Benefits Realized• Where can EHR success metrics Senior Mgt be aligned with existing scorecards: Clinical Commitment • How will the EHR enable Education / Lessons Learned • Strategic Goals healthcare reform and other • Baldrige Award CriteriaPoint in EHR Journey End-game Intent Financial long-term strategic goals of the • Departmental Objectives Commitment Day Operational organization? Model • Epic KPIs (or other Starter-set • Longitudinal vendor equivalent) Realization Rules/ management of patient • Monthly Operating Metrics Financial care Bonuses Reviews Analytics • Patient engagement • Meaningful Use/ VBP Alignment to Existing • HIE connectivity Capabilities quality measures Accountability Scorecards • Population health • HEDIS Scores • Ability to participate in • Etc. Process risk-sharing with payers Redesign Needs HC Reform Enablers Hard Soft © 2012 Divurgent. All rights reserved. 25
  • EHR BR Methodology • • • Opportunity short description Owner Classification: Cost reduction, revenue enhancer, etc. • Opportunity long description • Unit of measure Realism -Setting • Metric Benefit Goals calculation Benefits Realized • Current baseline • Post-live goal (% increase/ decrease) Senior Mgt • Dollar value in year one Commitment • Clinical Dollar value in year over life of EHR Education / Lessons Learned • Frequency of measurement •Point in EHR Journey End-game Intent Total expected return (hard and soft) Financial Operational Model Starter-set Commitment Day Metrics Realization Rules/ Financial Bonuses • Workshop setting to ensure everyone buys into Analytics Benefits Realization plan Alignment to Existing Capabilities everyone believe in the fundamental • Does Accountability Scorecards business case of the EHR? Process • Surface possible concerns about an operational HC Reform Enablers Redesign Needs ability/ control over BR metrics owner’s • Address concerns that some expenses/ metrics Hard will actually degrade in the short-term Soft • Are business leaders committed to being good stewards of EHR investment dollars and drive out as much benefit as possible? © 2012 Divurgent. All rights reserved. 26
  • EHR BR Methodology Realism -Setting Benefit Goals Benefits Realized Senior Mgt Commitment Clinical Education / Lessons LearnedPoint in EHR Journey End-game Intent Financial Commitment Day Operational Model • How Starter-set are operational improvements separated from EHR- Metrics related improvements? Realization Rules/ Financial • From some, if the benefits were incurred on the “the Bonuses Analytics watch” of the EHR go-live, it counts toward EHR ROI • How Alignment to Existing Capabilities are benefits being tied to bonuses? Accountability • How/ when are bonuses paid Scorecards out? Process Redesign Needs HC Reform Enablers • Bi-weekly meetings: goals, continued model refinements; measurement reporting Hard Soft • Coaching as necessary • Project sponsor drives meetings • BR Scorecards are published © 2012 Divurgent. All rights reserved. 27
  • Avoiding the Pitfalls• Being unclear on true intent of the Benefits Realization exercise• Waiting until after the EHR is deployed – Operational owners may claim their process initiatives were at core of savings – No baselining in place from before EHR deployed – harder to attribute saving to the EHR• Making metrics overly ambitious, e.g. – Metrics that require data difficult to evidence (e.g. true cost of a capitated patient) – Metrics that require multiple data points to calculate savings (e.g. an improvement in HEDIS scores)• Lack of clear senior management commitment, ownership, or incentives for realizing benefits• An “IT is just the cost of doing business” mentality• Operational owners worried that endorsing EHR benefits is an invitation to getting their FTEs reduced Practicing the “art of the possible” is the way to overcome common pitfalls of BR projects 28 © 2012 DIVURGENT. All rights reserved.
  • Other Lessons Learned• It is imperative to establish baseline and target metrics prior to EHR implementation recognizing that paper-based data may not be reliable.• It can be difficult to determine the precise benefits realization amounts. Today’s ROI efforts lack a common basis for comparison.• Avoid using fixed costs in financial savings analysis. Only variable costs would be saved, under most operational situations.• Claim staff time savings only if it results in fewer full-time equivalents per unit of service. In many situations, time savings do not result in a financial benefit.• Although the prevention of adverse events and unnecessary procedures may result in savings, the actual cost of a prevented event is difficult to estimate.• In some instances, the revenue reduction from reduced clinical utilization may be greater than the expected cost savings, depending on the hospital’s payer mix and contract terms. © 2012 Divurgent. All rights reserved. 29
  • Contact InformationDavid Shipledavid.shiple@divurgent.com617.947.1925Divurgent4445 Corporation Lane, Suite 228Virginia Beach, VA 23462877.254.9794 30 © 2012 Divurgent. All rights reserved.