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Ronald Ma, Austin Health - From Margins to Mainstream: Clinical Costing for Clinical Improvements

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Ronald Ma, Clinical Costing Analyst, Austin Health delivered the presentation at the 2014 Hospital Patient Costing Conference. …

Ronald Ma, Clinical Costing Analyst, Austin Health delivered the presentation at the 2014 Hospital Patient Costing Conference.

The Hospital Patient Costing Conference 2014 examines the development and implementation of patient costing methodologies to reflect Activity Based Funding allocations.

For more information about the event, please visit: http://www.healthcareconferences.com.au/patientcostingconference

Published in: Health & Medicine

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  • 1. From  margins  to  mainstream   Clinical  Cos0ng  =  Clinical  Improvement   Ronald  Ma  
  • 2. Experts  say…1   •  Not  only  for  compliance  and  top-­‐up  funding   •  Obliga0on  to  engage  clinicians  and  use  it     •  Get  out  of  your  basement     •  Don’t  produce  reports,  but  show  what  cos0ng   info  can  really  do   •  Help  the  pa0ent   •  Find  clinical  champions   •  Meaningless  if  not  used  for  pa0ents   2  
  • 3. Experts  say…2   •  Clinically  validated  cost  results   •  Comparability  of  the  cost  results   •  Cri0cal  cost  informa0on  to  improve  processes   and  outcomes  of  pa0ent  care   •  Cost  Outputs  =  Actual  resource  use  =  Price   •  Intra-­‐organisa0on  planning   •  Be  part  of  clinical  reviews  and  pathways  since  the   cos0ng  system  is  the  eRecord  of  the  journey   3  
  • 4. Experts  say…  3   •  Empower  clinicians     •  Promote  the  ownership  of  the  cos0ng  info   1.  Coverage  =  all  services  and  models  (e.g.  ICU)   2.  Accuracy  =  clinical  documenta0on  +  cost   alloca0on   3.  Consistency  =  comparability  and  inform  price   4.  Use  =  benchmark,  review,  plan,  improvement   4  
  • 5. ICU   @Aus0n   A0702   Intensive   Care  Unit   Clerical A0703  ICU   Consumables A5655   Intensive   Care  Unit  -­‐   Nursing A5656   Intensive   Care  Unit  -­‐   Ancillary A5659   Intensive   Care  HMO A5660   Intensive   Care  Unit  -­‐   Senior  Me A5690   Intensive   Care  Unit  -­‐   Registrar ICU Acute  Services HMO  Services MappingRule Med  Admiss-­‐ICUD% Med  Days-­‐ICUD% Nrs  Wards-­‐A5655% Thtr  Time-­‐A5660% Indirect  Fixed C*C Direct  Fixed Q*C Transfer Med  Adm/Days Nursing  Service Nrs  Wards Theatre Out-­‐of-­‐ICU  work HDU  =  2  recovery  beds  (Dr) 2,400  MET  calls 200  Cardiac  Arrest  calls 1,500  Liaison  Nurse  visits 5  
  • 6. Experts  say…4   •  Cos0ng  +  Clinical  =  Same  team  as  “one”   •  Disprove  the  “blame”   •  Only  compliance  =  unsustainable   •  Demonstrate  the  value  =  the  system  will   invest   •  Cos0ng  info  +  your  role  =  the  success  of  ABF  +   the  sustainability  of  the  health  system   6  
  • 7. Don’t  produce  reports   Drive  and  support  improvement   7  
  • 8. Epidemiology  of  the  cos0ng  system   •  Core  business:  compliance   •  Cos0ng  reports:  not  very  user-­‐friendly     •  Missing  components  (e.g.  Variable  Cost,  P&L,   Contribu0on  Margin,  MC  by  DRG,  Cost/WIES)   •  Input  side:  (+/-­‐)  FINANCE  input   •  Output  side:  triangula0on,  validity,  credibility,   comparability,  generalisability??   8  
  • 9. Must  be  more  highly  valued   9   Coding Costing Clinical Finance Research Organisation Public  Health Epidemiology Costing   Analyst Process   Improvement TIMWOODS Rapid   Improvement Quality  &   Safety Costing   System
  • 10. Be  a  clinical  person   •  Morning  mee0ngs   •  Literature  review   •  24/7  con0nuity  of  care   •  Holis0c   •  First  do  no  harm   •  Ethical   •  Living  with  the   phenomenon  (Trochim,   2000)(Heron,  1996)   10   Be   accountable!  
  • 11. 11   One  and  only   system  =   activity  +  cost   +  revenue Clinical Non-­‐clinical Blue  Skies Translational Quality   improvement Patient  Safety 2b Internal External Costing   Submission Quality   improvement State National 150b International Benchmarking Special-­‐purpose 2045 Health  Spend  >  State  +  LG   revenue 23% Age  >65 2050 Population   Growth 26% Health  Costs 2050 Top-­‐up   Funding Top-­‐up   Funding Top-­‐up   Funding
  • 12. 12   experimental observational Cohort Cross-­‐sectionalCase-­‐control RetrospectiveProspective Observe  the   previous  exposure Enrol  cases   and  controls Observe  the   exposure  and  the   outcome   simultaneously Prevalence   studies Exposure*health  outcome Observe  the   outcome  (disease   rate) cases controls Observe  the   outcome  (disease   rate) Exposure  status   by  observing Based  on   disease  status Causation/ association Odds  Ratio 1/02/2014 1/03/2014 1/04/2014susceptibility subclinical clinical Recovery,  disability  or  death 14/02/2014 pathologic  changes 1/03/2014 onset  of  symptoms 7/03/2014 diagnosis 1/02/2014 exposure Infectivity Pathogenicity Virulence exposure  by   randomisation cases controls
  • 13. Case  1:  Theatre  Cost  India  2013   •  40%  of  clinical  care  costs  incurred  in  theatres   •  Major  cost  centres  =  Major  revenue  centres   •  Future  resource  alloca0on  planning   •  33%  Capital  +  67%  Opera0ng   •  AUD7.45/theatre  min  (AUD447/theatre  hour)   •  Siddharth,  V.,  Kumar,  S.,  Vij,  A.,  &  Gupta,  S.  (2013).  Cost  analysis  of   opera0on  theatre  services  at  an  Apex  Ter0ary  Care  Trauma  Centre  of   India.  Indian  Journal  of  Surgery,  1-­‐6.   13  
  • 14. 33.63 31.9 29.97 4.5 100 0 20 40 60 80 100 120 Manpower Capital Consumables Support  service Total 14  
  • 15. Case  2:  CHADx  1   •  University  of  Alberta  (Jackson,  Nghiem,   Rowell,  Jorm,  &  Wakefield,  2011)   •  Cos0ng  data  is  underused   •  Marginal  Cost   •  Incremental  cost   •  Episode  cost  <>  System  cost   15  
  • 16. CHADx  2   •  No  maper  the  cost  or  the  cost  of  reduc0on   efforts,  we  would  strive  to  reduce  pa0ent   safety  problems   •  Before/Arer  study:  Baseline  data   •  CHADx  coefficients  =  median  incremental   costs  of  the  impact  of  CHADx   •  Confounding  –  sicker  pa0ents  develop  HADx,   then  control  the  cost  of  uncomplicated  care   16  
  • 17. CHADx  3   •  HADs  add  3%  ($64M)  to  22%  ($505M)  to  a   hospital’s  budget   •  At  the  median  LOS,  an  addi0onal  28,500  casemix-­‐ adjusted  pa0ents  could  be  treated  using  exis0ng   beds  if  all  CHADx  were  avoided   •  Search  for:  Preventable  <>  Reducible  harm   •  What  info  is  ‘good’  enough  to  guide  ac0on  (if  you   are  going  to  fix  the  input  side  you  will  never   reach  this  point)   •  Costs  of  adverse  events  =  core  clinical  business     17  
  • 18. Case  3:  Asthma  example  (USA)   •  (Sullivan  et  al.,  2002)   •  Interven0on  =  social  worker-­‐based  educa0on   •  𝐼𝐶𝐸𝑅=​ 𝑀 𝑀𝐶𝑠  − 𝑀𝑀𝐶𝑐/𝑀𝑆𝐹𝐷𝑠  − 𝑀𝑆𝐹𝐷𝑐    •  ICER  =  Incremental  Cost-­‐Effec0veness  Ra0o   •  MMC  =  Mean  Medical  Cost   •  MSFD  =  Mean  Symptom  Free  Days   •  Result:  Addi0onal  cost  of  $9.20/SFD   18  
  • 19. 2-­‐year  trial  with  3%  discount  on  the  second  year  costs  and  benefits   19  
  • 20. 20  
  • 21. 21   Fenwick,  E.,  Marshall,  D.  A.,  Levy,  A.  R.,  &  Nichol,  G.  (2006).  Using  and  interpre0ng  cost-­‐effec0veness  acceptability  curves:  an   example  using  data  from  a  trial  of  management  strategies  for  atrial  fibrilla0on.  BMC  Health  Services  Research,  6(1),  52.  
  • 22. Case  4:  Rehospitalisa0on  (ReH)   •  Mary  Naylor@Uni  of  Penn  Sch  of  Nrs  in  2004   •  Interven0on  =  Transi0onal  Care  Model  (TCM)   •  Measure  =  ReH  at  least  once  within  6  months   22   RCT  1 RCT  2 treatment $3,630 $7,636 control $6,661 $12,481 $3,630   $7,636   $6,661   $12,481    $-­‐  $2,000  $4,000  $6,000  $8,000  $10,000  $12,000  $14,000 ReH  costs  post-­‐TCM  2004 treatment control
  • 23. Case  5:  Hydrocephalus   •  3-­‐year  hospital-­‐based  cost  analysis  in   Children’s  Hospital  at  Westmead   •  Alan  Pham,  Chris0ne  Fan  and  AP  Brian  K   Owler   •  USA:  38,000  ped  adm  =  391,000  bed-­‐days  =   $1.4b  =  $3,580.56/bed-­‐day   •  Canada:  CAD3.5M     23  
  • 24. Purpose  of  hydrocephalus  cos0ng   •  Clinically  validated  and  interpreted  costs   •  Improve  the  process  and  outcome  of  care   (Donabedian)   •  Improve  comparability  of  results   •  Cost  reflects  actual  à  price  sexng   •  Support  planning  and  clinical  reviews   24  
  • 25. $22,959   $50,186    $-­‐  $10,000  $20,000  $30,000  $40,000  $50,000  $60,000 H  only  (n  =  158) H  +  other  (n  =  23) Cost/Adm Item TotalCost Cost/Adm #Adm H  only  (n  =  158) 3,627,499$       22,959$                 158 H  +  other  (n  =  23) 1,154,287$       50,186$                 23 Total 4,781,786$       73,145$                 181 Other  =  spina  bifida,  myelomeningocele  and  IVH  of  prematurity   25  
  • 26. $14,205   $29,077    $-­‐  $5,000  $10,000  $15,000  $20,000  $25,000  $30,000  $35,000 All  new  patients All  complications Hydrocephalus  AverageCost/Adm Hydrocephalus  costs TotalCost AverageCost/Adm All  new  patients 923,310$               14,205$                                                   New  shunt  (n  =  40) 570,100$               14,252$                                                   New  ETV  (n  =  25) 353,211$               14,128$                                                   All  complications 2,704,189$       29,077$                                                   Shunt  blockage/revision  (n  =  69) 780,254$               11,308$                                                   Shunt  infection  (n  =  24) 1,923,935$       80,164$                                                   26  
  • 27. 27  
  • 28. 28  
  • 29. Lessons  learned  from  Hydrocephalus   •  Costs  are  underes0mated   •  Treatment  of  hydrocephalus  =  cost  effec0ve   •  Complica0ons  =  expensive  ($  x  5.3)   •  â  complica0ons  =  á  clinical  +  economic  gains   •  Review  clinical  protocols   •  Research   29  
  • 30. Costs  excluded   •  Tumor-­‐  and  trauma-­‐related  hydrocephalus   •  Non-­‐surgical  +/-­‐  treatment   •  Surgeon  fees  for  private  pa0ents   •  Outpa0ent  visits   •  Inves0ga0ons   •  GP  or  Pediatrician  visits   •  Indirect  costs    loss  of  income,  loss  of  produc0vity,  0me-­‐off    long-­‐term  economic  costs  of  disability    non-­‐financial  costs   30  
  • 31. Case  6:  Whipple  –  1-­‐year  cost   •  1996  Washington,  USA  study   •  25-­‐month  prospec0ve  study  on  30   Pancreatoduodenectomy  (n  =  30)   •  Methodology  =  item-­‐by-­‐item  prospec0ve   micro-­‐cost  analysis   •  33%  developed  complica0ons  (n  =  10)   •  Post-­‐op  complica0ons  =  áward  cost  by  76%   •  Iden0fy  cost  driver  =  áquality  =  âcosts   31  
  • 32. Whipple  2   OR  costs disposable/non-­‐disposable  equipment OR  room OR  staff postanesthesia  care anesthesia Ward  costs hospital  room pharmacy radiology 32  
  • 33. 33  
  • 34. Case  7:  Post-­‐allogeneic  hematopoie0c   Stem  Cell  Transplanta0on   •  Swedish  study  2012  (5-­‐year  from  2003  –  2007)   •  Mean  1-­‐year$/pa0ent  =  AUD  204,031  (95%  CI  =  AUD   179,688  –  227,015)   •  âcosts  =  Non-­‐Myeloabla0ve  Condi0oning  (NMT)   •  $  of  Reduced  Intensity  Condi0oning  (RIC)  =   Myeloabla0ve  Condi0oning  (MAC)     •  ácosts  =  complica0ons  and  re-­‐transplanta0on   •  Mul0variate  analysis  à  76%á1-­‐year  costs  of   post-­‐transplant  complica0ons  and  re-­‐ transplanta0on  (costs  gone  up  to  AUD  358,889).       34  
  • 35. 35  
  • 36. ReTx  =  Re-­‐transplanta0on   36  
  • 37. Lessons  learned  from  SCT  study   •  HSCT  is  expensive   •  Unrelated  Donor  Transplant  $  >  HLA-­‐iden0cal   •  HLA  =  Human  Leukocyte  An0gen   •  Re-­‐transplanta0on  =  áá$   •  Grar  versus  Host  Disease  (GVHD),  rejec0on   and  Invasive  fungal  infec0on  (IFI)  =  á$   •  Beper  preven0on  and  Tx  of  complica0ons  =   cost-­‐effec0veness  of  HSCT   37  
  • 38. Case  8:  Unplanned  reopera0on  rate   •  Dartmouth-­‐Hitchcock  Medical  Center  USA  2001   •  Any  secondary  opera0on  required  for  a   complica0on  from  the  index  opera0on   •  48  –  66%  all  adverse  events  related  to  surgery     •  >  half  ‘preventable’   •  Colon  resec0on,  renal  transplant,  gastric  by-­‐pass   and  pancrea0c  resec0on   •  Reopera0on  =  higher  costs  +  higher  mortality   rate   •  85%  of  complica0ons  at  original  surgical  site   38  
  • 39. Birkmeyer,  J.  D.,  Hamby,  L.  S.,  Birkmeyer,  C.  M.,  Decker,  M.  V.,  Karon,  N.  M.,  &  Dow,  R.  W.   (2001).  Is  unplanned  return  to  the  opera0ng  room  a  useful  quality  indicator  in  general   surgery?  Archives  of  Surgery,  136(4),  405.   39  
  • 40. Lessons  learned  from  re-­‐op  rate   •  $  X  4  higher  +  mortality  x  3  +  sufferings   •  Charges  ≠  Costs     •  Limita0ons  –  relying  on  admin  data   •  To  be  precise  –  combined  with  clinical  data   •  May  hinder  0mely  interven0on  by  surgeons  if   used  as  Quality  KPI   •  Find  alterna0ve  methods  for  re-­‐op   40  
  • 41. Case  9:  Robo0c  cardiac  surgery     •  (Morgan  et  al.,  2005)  New  York   •  Q:  comparison  between  robo0c  and   sternotomy  costs  from  hospital  perspec0ves   •  Method:  Retrospec0ve  observa0onal  study   with  independent  sample  t-­‐test  and  X2   •  Sample:  atrial  septal  defect  (n  =  20)  and  mitral   valve  repair  (n  =  20)   •  Data:  Hospital  cost  data  with  amor0za0on     41  
  • 42. 42  
  • 43. Lessons  learned  -­‐  Robo0c   •  Retrospec0ve  observa0onal:  selec0on  bias   •  Inherent  limitaBons  in  the  cost  data   •  Small  sample  size   •  Absolute  cost  robo0c  >  conven0onal  surgery   •  But,  may  jus0fy  investment  in  this  tech   43  
  • 44. Inflamma0on     =  the  star0ng  point  of  healing   •  They  will  ‘blame’  the  cos0ng  data  =  improve  it   •  Work  with  the  local  clinical  champion   •  5Es  for  working  ‘with’,  (not  working  ‘on’)!   (Envisage,  Engage,  Empower,  Enable,   Encourage)  (your  homework)   •  Use  PAR  methodology   •  Ac0ve  and  full  par0cipa0on  =  from  planning  to   evalua0on  =  inclusive  =  ownership   44  
  • 45. Ul0mate  goal  =  clinical  improvement   •  Observe  =  analyse  the  process  and  info   •  Successes  à  celebrate   •  Failures  à  don’t  give  up  (it  is  too  easy  to  give   up)  but  learn   •  Ul0mate  goal  =  clinical  improvement  =   mainstream   45  
  • 46. Always  reflect   •  Reflect  =  cri0cal  knowledge  =  ConscienBzaBon   •  Refine  your  data  and  approach  or  CPR  your   cos0ng  system   •  Celebrate  with  your  team  (it  is  a  team  work!)   46  
  • 47. What’s  your  team?   Research Business  Case Funding   Negotiation Process   Improvement Costing  Analyst   and  Team Benchmarking Academics CSU  Mgr Clinical   Directors Pricing   Authority Whole  Org Locally  and   globally 47  
  • 48. Share  your  knowledge   •  You  +  your  system  visible  in  the  community   •  Share  your  experience  and  knowledge   •  Publish  your  journey  of  ‘fm2ms’   •  Habermas,  1962:  Communica0ve  ac0on  and   the  public  sphere   48  
  • 49. What  clinicians  want  to  see   •  Sound  sta0s0cal  analyses   •  Referencing:  Reputable  journals   •  $  +  human  misery     •  Treatment  plan  cost*episode  cost  (<>FY  concept)   •  Focus  on  process  >  individual  errors     •  Just  an  awareness  (health  promo0on  approach)  =   improvement   •  #  in  wai0ng  *  $  =  loss  of  revenue  =  waste   49  
  • 50. You  are  expected  to  know…   •  QALY   •  DALY   •  CHADx   •  Risk  adjustment  (e.g.  the  Charlson   comorbidity  index  and  score)   •  Rate,  ra0o  and  propor0on   •  Period  Cos0ng   50  
  • 51. Plan Do Check Act Demming  Cycle Plan Act Observe Reflect Plan Act Observe Reflect PAR 51  
  • 52. Policy  implica0ons:  Demand  is  there   •  Health  promo0on  approach  is  needed:   empowering  the  cos0ng  sector   •  Severely  under-­‐resourced  and  under-­‐u0lised     •  Resourcefulness/resourcing   •  Joubert,  N.,  &  Raeburn,  J.  (1998)   •  Applica0on  of  the  cos0ng  data  >  polishing  the   cos0ng  input  process   52  
  • 53. 6  Cost  Analyses   1.  Cost  Consequences  (cost  and  outcome  as  is)   2.  Cost  Minimisa0on  (outcome  1  =  outcome  2)   3.  Cost  of  illness  (a  popula0on,  a  region)     4.  Cost  Effec0veness  (outcome  =  morbidity/ mortality)   5.  Cost  U0lity  (outcome  =  QALY)   6.  Cost  Benefit  (quan0fied  in  $)   53  
  • 54. •  Pa0ent  Safety  Add-­‐on  (DATRIX)  to  the  cos0ng   •  Harms  avoided  =  projected  savings   •  Pa0ent  Sa0sfac0on/Experience  à  Happiness   •  Quality  and  Safety  =  core  business   •  Pa0ent-­‐Centred  Healthcare  of  the  21st  Century   •  This  is  much  more  powerful  than  LOS  study…   •  Cos0ng  System  =  eRecord  of  the  journey   Further  research:  Healthcare  is   changing   54  
  • 55. Healthcare  needs  Cos0ng  System   •  Legi0mise  your  cos0ng  data  with  Finance  and   Clinical  teams  à  your  cos0ng  data  will  ‘fly’   •  Stay  sufficiently  with  the  phenomenon   •  Be  a  PAR  researcher  (crea0on  of  knowledge  +   ac0on)   •  Can’t  change  it  overnight  but  need  a  change   •  Success  KPI  à  prevalence  of  cos0ng  data  usage,   clinical  and  finance  acceptance,  and  involved  in   quality  and  clinical  improvement   •  Failure  à  nobody  uses  it   55  
  • 56. Formulate  own  benchmark,  KPIs  and  a   plan  for  the  next  cycle  of  clinical   improvement   56   SKILL  LEVEL   #STAFF   SUPPORT   3S  
  • 57. Structure-­‐process-­‐outcome  (Donabedian,  1980)   •  1919  -­‐  2000   •  Outcome-­‐based  funding   •  Outcome-­‐based  cos0ng  (holis0c  cost)   •  Outcome-­‐based  management   •  Outcome-­‐based  resource  alloca0ons   •  OBF  <>  ABF   •  Paradigm  shir:  Problem-­‐based  healthcare  à   outcome-­‐based  healthcare   57  
  • 58. Mobilising  the  masses   58   Timely  and  relevant Accurate Transparent Complete  data Value-­‐added   analyses Engage Finance Clinical Management Show  the  value  of  the   costing  info  for  clinical   improvement Seeing  and  believing  it They  will Invest  in  it Sustainable  for   the  costing   industry From   margins  to   mainstream Thank  you.