iHT2          The Health IT Summit in Beverly HillsIntercontinental Los Angeles Hotel, Beverly Hills, California     Wedne...
Disclosures Neither I, Brent C. James, nor any family members, have any relevant financial relationships to be discussed, ...
Quality, Utilization, & Efficiency (QUE) Six clinical areas studied over 2 years: - transurethral prostatectomy (TURP) - o...
IHC TURP QUE Study                                            Median Surgery Minutes vs Median Grams Tissue               ...
IHC TURP QUE Study                                        Average Hospital Cost            2500                           ...
The opportunity (care falls short of its theoretic potential)1. Well-documented,           massive, variation in  practice...
50+% of all resource expenditures in             hospitals is    quality-associated waste:      recovering from preventabl...
Total U.S. fiscal exposures By layering on future obligations, the total net prevent value (PV) of debt risesto over $60 t...
The Fiscal Gap (unfunded federal obligations - 2009)Unfunded obligations        Medicare    $38.1 trillion                ...
Health care payments will be cut
We have found proven solutions   Dr. Alan Morris, LDS Hospital, 1991:NIH-funded randomized controlled trialassessing an "a...
Challenges building guidelinesLack of evidence for best practice- Level 1, 2, or 3 evidence available only about 15-20% of...
Dr. Alan Morris, LDS Hospital, 1991Results:survival (for ECMO entry criteria patients) improved from 9.5% to 44%costs fell...
Sepsis bundle compliance                        ER bundle   ICU bundle   All components               100                 ...
Sepsis mortality - ER-ICU transfers                  0.5                                                                  ...
Lesson 1   We count our successes in lives ...
Lesson 2              Very often,    better care is cheaper care ...
Aligning financial incentivesNeonates > 33 weeks gestational age who develop respiratory distress syndromeTreat at birth h...
Current payment mechanismsActively incent overutilization: do more, get paidmore - even when there is no health benefitI a...
% Gross Domestic Product                                                                       15                         ...
Capitation makes a comeback1. ACOs, AMHs, bundled payment, shared savings,   pay for value: sophisticated forms of capitat...
Our answer:   A Shared Accountability Organization:      Physicians,      hospitals,      payers, and      patientswith al...
Some key elements:Pay first dollar, not last dollar  (defined contribution, not defined benefit; reference payment)Whoever...
Process management is the keyhigher quality drives lower costsunder capitation, all of the savings come back to clinical p...
Process management means health IT1.   Identify a high-priority clinical process (key process analysis)2.   Build an evide...
Better has no limit ...             an old Yiddish proverb
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iHT² Health IT Summit in Beverly Hills 2012 - Brent James, M.D. M. Stat. Executive Director, Institute for Healthcare Delivery Research Intermountain Healthcare, Keynote Presentation "Health IT: The Critical Tool for Managing Clinical Care"

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Brent James, M.D., M. Stat. Executive Director, Institute for Health Care Delivery Research Intermountain Healthcare Keynote Presentation. Six clinical areas studied over 2 years:
- transurethral prostatectomy (TURP)
- open cholecystectomy
- total hip arthroplasty
- coronary artery bypass graft surgery (CABG)
- permanent pacemaker implantation
- community-acquired pneumonia
pulled all patients treated over a defined time period
across all Intermountain inpatient facilities - typically 1 year
identified and staged (relative to changes in expected utilization)
- severity of presenting primary condition
- all comorbidities on admission
- every complication
- measures of long term outcomes
compared physicians with meaningful # of cases
(low volume physicians included in parallel analysis, as a group)

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iHT² Health IT Summit in Beverly Hills 2012 - Brent James, M.D. M. Stat. Executive Director, Institute for Healthcare Delivery Research Intermountain Healthcare, Keynote Presentation "Health IT: The Critical Tool for Managing Clinical Care"

  1. 1. iHT2 The Health IT Summit in Beverly HillsIntercontinental Los Angeles Hotel, Beverly Hills, California Wednesday, 7 November 2012 -- 11:25a - 12:10p Health IT: The Critical Tool for Managing Clinical Care Brent C. James, M.D., M.Stat. Executive Director, Institute for Health Care Delivery Research Intermountain Healthcare Salt Lake City, Utah, USA
  2. 2. Disclosures Neither I, Brent C. James, nor any family members, have any relevant financial relationships to be discussed, directly or indirectly, referred to or illustrated with or without recognition within the presentation. I have no financial relationships beyond my employment at Intermountain Healthcare.
  3. 3. Quality, Utilization, & Efficiency (QUE) Six clinical areas studied over 2 years: - transurethral prostatectomy (TURP) - open cholecystectomy - total hip arthroplasty - coronary artery bypass graft surgery (CABG) - permanent pacemaker implantation - community-acquired pneumonia pulled all patients treated over a defined time period across all Intermountain inpatient facilities - typically 1 year identified and staged (relative to changes in expected utilization) - severity of presenting primary condition - all comorbidities on admission - every complication - measures of long term outcomes compared physicians with meaningful # of cases (low volume physicians included in parallel analysis, as a group)
  4. 4. IHC TURP QUE Study Median Surgery Minutes vs Median Grams Tissue 100 100 Grams tissue / Surgery minutes 80 80 60 60 40 40 20 20 0 0 M L K J P B C O N A I D H E G F Attending Physician Median surgical time Median grams tissue removed
  5. 5. IHC TURP QUE Study Average Hospital Cost 2500 2500 2233 2140 2156 2000 1913 2000 1697 1662 1618 1598 1568 1552 1556 1500 1549 1543 1500 1500 Dollars 1269 1164 1000 1000 500 500 0 0 A B C D E F G H I J K L M N O P Attending Physician
  6. 6. The opportunity (care falls short of its theoretic potential)1. Well-documented, massive, variation in practices (beyond the level where it is even remotely possible that all patients are receiving good care)2. High rates of inappropriate care3. Unacceptablerates of preventable care- associated patient injury and death4. A striking inability to "do what we know works"5. Huge amounts of waste leading to spiraling prices that limit access (46.6 million uninsured Americans)
  7. 7. 50+% of all resource expenditures in hospitals is quality-associated waste: recovering from preventable foul-ups building unusable products providing unnecessary treatments simple inefficiency Andersen, C. 1991 James BC et al., 2006
  8. 8. Total U.S. fiscal exposures By layering on future obligations, the total net prevent value (PV) of debt risesto over $60 trillion -- about $195,000 for every man, woman and child in the U.S. More than two-thirds of the shortfall arises from health care delivery.) 60,001.8 60 PV of Medicare Part D shortfall ($7,172.0 B) 50 PV of Medicare Part B shortfall ($17,165.0 B) 40 Trillion $ 30 PV of Medicare Part A shortfall ($13,770.0 B) 20 Other explicit PV of Social Security shortfall ($7,677.0 B) liabilities ($1,257.4 B) 10 Federal employee and veteran benefits ($5,283.7 B) Federal debt securities ($7,582.7 B) 0 2009 Source: GAO. Financial Reports of the United States Government for the Years Ended September 30, 2009 and 2008.
  9. 9. The Fiscal Gap (unfunded federal obligations - 2009)Unfunded obligations Medicare $38.1 trillion National Total Stimulus Defense TARP National Debt $862 $714 $700 Social Security $14.1 trillion billion billion billion $7.7 trillion
  10. 10. Health care payments will be cut
  11. 11. We have found proven solutions Dr. Alan Morris, LDS Hospital, 1991:NIH-funded randomized controlled trialassessing an "artifical lung" vs. standard ventilator managementfor acute respiratory distress syndrome (ARDS)discovered large variations in ventilator settingsacross and within expert pulmonologistscreated a protocol for ventilator settings in the control arm ofthe trialImplemented the protocol using Lean principles (Womack et al., 1990 - The Machine That Changed the World)- built into clinical workflows - automatic unless modified- clinicians encouraged to vary based on patient need- variances and patient outcomes fed back in a learning loop
  12. 12. Challenges building guidelinesLack of evidence for best practice- Level 1, 2, or 3 evidence available only about 15-20% of the timeExpert consensus is unreliable- experts cant accurately estimate rates using subjective recall (produce guesses that range from 0 to 100%, with no discernable pattern of response)- what you get depends on whom you invite (specialty level, individual level)Guidelines dont guide practice- systems that rely on human memory execute correctly ~50% of the time (McGlynn: 55% for adults, 46% for children)
  13. 13. Dr. Alan Morris, LDS Hospital, 1991Results:survival (for ECMO entry criteria patients) improved from 9.5% to 44%costs fell by ~25% (from $160k to $120k)physician time fell by ~50%we generalized the concept: Shared Baselineprotocols ("bundles") to standardize care whileencouraging clinicians to vary based on individual patient needs;then feeding back variation and patient outcome data in a"learning system"
  14. 14. Sepsis bundle compliance ER bundle ICU bundle All components 100 100 80 80% compliance 60 60 40 40 20 20 0 0 n n n n p p p l l l 08 ov 09 ov 10 ov ay ay ay ar ar ar ar Ju Ju Ju Ja Ja Ja Ja Se Se Se M M M M M M M N N N 07 Month
  15. 15. Sepsis mortality - ER-ICU transfers 0.5 0.5 32 37 42 23 29 33 53 50 39 30 24 41 28 22 27 32 36 52 70 60 57 50 51 77 77 71 48 59 63 68 70 90 81 79 78 70 84 n= 28 44 45 42 34 41 45 38 47 31 34 40 35 27 28 24 44 39 51 65 47 52 61 43 73 65 69 52 46 68 63 94 75 69 81 82 74 91 0.4 0.4 Mortality rate 0.3 0.3 20.2% 0.2 0.2 0.1 0.1 8.0% 0 0 n n n n n n n 05 p 06 p 07 p 08 p 09 p 10 p ay ay ay ay ay ay Ja Ja Ja Ja Ja Ja Ja Se Se Se Se Se Se M M M M M M 04125+ fewer inpatient deaths per year Month
  16. 16. Lesson 1 We count our successes in lives ...
  17. 17. Lesson 2 Very often, better care is cheaper care ...
  18. 18. Aligning financial incentivesNeonates > 33 weeks gestational age who develop respiratory distress syndromeTreat at birth hospital with nasal CPAP (prevents alveolar collapse), oxygen, +/- surfactantTransport to NICU declines from 78% to 18%.Financial impact (NOI; ~110 patients per year; raw $): Before After Net Birth hospital 84,244 553,479 469,235 Transport (staff only) 22,199 - 27,222 - 49,421 Tertiary (NICU) hospital 958,467 209,829 -748,638 Delivery system total 1,064,910 736,086 -328,824 Integrated health plan 900,599 512,120 388,479 Medicaid 652,103 373,735 278,368Other commerical payers 429,101 223,215 205,886 Payer total 1,981,803 1,109,070 872,733
  19. 19. Current payment mechanismsActively incent overutilization: do more, get paidmore - even when there is no health benefitI am paid to harm my patients (paid more forcomplications)Actively disincents innovation that reducescosts through better quality (a key success factor forthe rest of the U.S. economy)Very strong, deep, wide evidence showingexactly this effect throughout U.S. healthcare
  20. 20. % Gross Domestic Product 15 25 0 5 10 2019 60 14819 6519 70 35719 7519 80 1,10619 8519 90 2,28119 95 Bending the cost curve 3,76220 00 4,72920 05 6,68320 10 9,17320 15 0 5 12,357 10 15 20 Total $ per US citizen (thousands)
  21. 21. Capitation makes a comeback1. ACOs, AMHs, bundled payment, shared savings, pay for value: sophisticated forms of capitation - provider at (financial) risk ... but with far better data systems for (1) quality measurement and (2) risk adjustment2. Represent "managed care at the bedside" - ask clinical teams at the bedside to manage the care, not distant and disengaged insurance companies3. More than 80% of cost saving opportunities live on the clinical side; 70+% of clinical improvement activities reduce costs by freeing up care delivery capacity (technically, "fixed cost leverage").
  22. 22. Our answer: A Shared Accountability Organization: Physicians, hospitals, payers, and patientswith aligned professional and financial incentives to seek the best medical result at the lowest necessary cost
  23. 23. Some key elements:Pay first dollar, not last dollar (defined contribution, not defined benefit; reference payment)Whoever makes the consumption decision bears the (appropriate) financial consequences (patients and physicians have skin in the game)No incentive to risk-select patients (community-rated premiums, but risk-adjusted capitation payments)Levers: No incentives to overtreat or undertreatPayments targeted at break-even, most efficient cost of operations; all upside $$ contained in shared savingsHitting measured quality thresholds a prerequisite to participate in shared savingsInvolve employed and affiliated physician groups via partner health plans
  24. 24. Process management is the keyhigher quality drives lower costsunder capitation, all of the savings come back to clinical process managersmore than half of all cost savings will take the form of unused capacity (fixed costs: empty hospital beds, empty clinic patient appointments, and reduced procedure, imaging, and testing rates)balanced by increasing demand (Baby Boom; obesity; community growth; technological advances; may still require some capacity management / reduction)major financial model shift, from revenue enhancement to cost controlkey difference: it takes a team
  25. 25. Process management means health IT1. Identify a high-priority clinical process (key process analysis)2. Build an evidence-based best practice protocol (always imperfect: poor evidence, unreliable consensus)3. Blend it into clinical workflow (= clinical decision support; dont rely on human memory; make "best care" the lowest energy state, default choice that happens automatically unless someone must modify)4. Embed data systems to track (1) protocol variations and (2) short and long term patient results (intermediate and final clinical, cost, and satisfaction outcomes)5. Feed those data back (variations, outcomes) in a learning loop - constantly update and improve the protocol - provide true transparency to front-line clinicians - generate formal knowledge (peer-reviewed publications)
  26. 26. Better has no limit ... an old Yiddish proverb

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