Reducing Waste in Healthcare Delivery

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Join Dr. Burton, a nationally renowned physician executive, in an advanced analysis of healthcare waste. With nearly three decades practicing medicine and architecting clinical processes as an executive at Intermountain Healthcare, Dr. Burton has spent the greater part of his career focused on developing a systematic process and tools to eliminate waste from US Healthcare.

Attend and learn:

1. How to dissect waste into coherent “chunks”
2. What data and tools are needed to quantify the different forms of waste and implement improvement initiatives to reduce waste
3. How to organize clinical teams to use the data and tools to reduce waste

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Reducing Waste in Healthcare Delivery

  1. 1. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.comProprietary and Confidential January 16, 2014 – David A. Burton, MD Advanced Efforts to Identify and Reduce Waste in Healthcare Delivery
  2. 2. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.com 1. Constructs for understanding healthcare waste
  3. 3. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Clinical Integration Construct Clinical Programs – ordering of care Primary Care Care Process Families e.g., Diabetes CV Care Process Families e.g., Heart Failure W&C Care Process Families e.g., Pregnancy GI Care Process Families e.g., Lower GI Disorders Resp- iratory Care Process Families e.g., Obstructive Lung Disorders Neuro Sciences Care Process Families e.g., Spine Disorders Musculo- skeletal Care Process Families e.g., Joint Replace- ment Surgery Care Process Families e.g., Urologic Disorders General Med Care Process Families e.g., Infectious Disease Oncology Care Process Families e.g., Breast Cancer Peds Spec Care Process Families e.g., Peds CV Surg Mental Health Care Process Families e.g., Depression
  4. 4. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Clinical Integration Construct Clinical Support Services – workflow and defects Primary Care Care Process Families e.g., Diabetes CV Care Process Families e.g., Heart Failure W&C Care Process Families e.g., Pregnancy GI Care Process Families e.g., Lower GI Disorders Resp- iratory Care Process Families e.g., Obstructive Lung Disorders Neuro Sciences Care Process Families e.g., Spine Disorders Musculo- skeletal Care Process Families e.g., Joint Replace- ment Surgery Care Process Families e.g., Urologic Disorders General Med Care Process Families e.g., Infectious Disease Oncology Care Process Families e.g., Breast Cancer Peds Spec Care Process Families e.g., Peds CV Surg Mental Health Care Process Families e.g., Depression ClinicalSupportServices(DeliveryofCare) Diagnostic Clinical Support Service (work flow models) (e.g., Pathology and Laboratory Medicine, Diagnostic Radiology) Ambulatory Clinic Clinical Support Service (work flow models) (e.g., Primary Care Clinics, Chronic Disease Specialty Clinics, Sub-specialty Clinics)) Acute Medical Clinical Support Service (work flow models) (e.g., Emergency Care, ICU/CCU/NICU/PICU, General Med-Surg) Invasive Clinical Support Service (work flow models) (Interventional Medical [e.g., cath lab, interventional radiology, GI lab, L&D, rad onc] and Surgical [e.g., amb, IP]) Therapeutic Clinical Support Service (work flow models) (e.g., Pharmacy, Transfusion Medicine, Respiratory Therapy, Physical, Occupational, Speech Therapy)
  5. 5. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Organization of teams Clinical and technical Provides steady state domain governance and oversight GUIDANCE TEAM Refines Work Group output and leads implementation CLINICAL IMPLEMENTATION TEAM Provides l forum to develop and/or refine clinical content and analytics feedback WORK GROUP Supports development of clinical content and analytics feedback Leads data governance CONTENT AND ANALYTICS TEAM Provides overall governance and prioritization of initiativesSENIOR EXECUTIVE LEADERSHIP TEAM Chief Knowledge Officer
  6. 6. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Technical support personnel
  7. 7. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential = Organization of clinical teams Women & Newborn’s Clinical Program Guidance Team Pregnancy SAM Pregnancy MD Lead RN SME Knowledge Manager Data Architect Application Administrator RN, Clinical Ops Director Guidance Team MD lead (e.g., Pregnancy MD Lead) = Subject Matter Expert = Data Capture = Data Provisioning & Visualization = Data Analysis Normal Newborn SAM NL Newborn MD Lead RN SME Gynecology SAM Gyn MD Lead RN SME • Permanent teams • Integrated clinical and technical members • Technical personnel support multiple packets AbNL NB 3-A SAM AbNL NB MD Lead RN SME
  8. 8. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Repeatable system for deployment Kickoff AIM Statement Implementation Design Launch Approval Results Review • Mission • Cohort Discover • Data Analysis and Review • BMJ Best Practices • Building Multiple Potential AIM statements • Supplement BMJ content • Refine Cohort • Refine Metrics • Develop Draft Visualizations • Develop Recommended AIM statement #1 • Cluster Reps Obtain Front Line Input • Finalize Cohort • Develop Additional metrics based on feedback • Develop Additional Visualizations to support • PDSA cycle • Cluster Reps Obtain Front Line Input • Improvement Plan • Implementation Plan • Develop cluster rep assignments, and deliverables • Collect cluster rep feedback • Prepare Initial Results from AIM statement #1 • Summarized report for historical review • Refine, recommend AIM statement #2 Monthly Tasks and Checkpoints 7 Steps (Work Streams) 1. Gather knowledge assets 2. Define cohort 3. Select Aim Statement 4. Select, build & refine metrics 5. Develop implementation plan 6. Implement plan 7. Measure progress Select Initial Metric Build and Refine Build and Refine Build and Refine
  9. 9. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.comProprietary and Confidential Population Health Management construct
  10. 10. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Population Health Management Medicare fee-for-service payments by venue - 2011 OutpatientClinic Care Inpatient SNF Home Health Hospice $ 31.7 Billion 11.8% 77.6 Billion 28.8% 90.6 Billion 33.7% $ 29.7 Billion 11.0% $ 18.4 Billion 6.8% $ 10.1 Billion 3.7% Clinic Care Outpatient Inpatient SNF LTCH/IRF Home Health Hospice $ 11.1 Billion 4.1% LTCH/IRF
  11. 11. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential11 Home (Patient Portal) * To Invasive Care Processes Clinic Care Non-recurrent Clinic Care Chronic Acute Medical IP Med-Surg Acute Medical IP ICU Invasive Medical Invasive Surgical Diagnostic Work-up Bedside care Triage to Treatment Venue Substance Preparation Invasive* Subspecialist Chronic Disease Subspecialist Screening & Preventive Symptoms Procedure Indications for Intervention Diagnostic algorithms Indications for Referral Triage Criteria Preventive, Diagnostic, Triage and Clinic Care, Algorithms; Referral & Intervention Indications Population Utilization Knowledge Assets Treatment and Monitoring Algorithms Treatment and Monitoring Algorithms Health Maintenance and Preventive Guidelines Substance Selection Substance Selection Clinical Supply Chain Management Admission Order SetsAdmission Order Sets Supplementary Order Sets Pre-Procedure Order Sets Post- procedure Order Sets Discharge Bedside care practice guidelines, risk assessment and patient injury prevention protocols, bedside care procedures, transfer and discharge protocols Standardized Follow-up Post-acute care order sets IP (SNF, IRF) Home health Hospice Management of Acute Medical, Invasive & Post- Acute Care Modules Per Case Knowledge Assets Clinical ops procedure guidelines and patient injury prevention Post-procedure Care Population Health Management Anatomy of Healthcare Delivery
  12. 12. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.comProprietary and Confidential Waste construct
  13. 13. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential 13 Utilization management waste and prevention and treatment waste Utilization Management WastePer capita management (population focus) Per encounter and per case management (individual patient focus) Prevention and Treatment Waste Sample Metrics Admits/1000 members IP days/1000 members OP visits/1000 members Procedures/1000 members ED visits/1000 members Readmissions/1000 members Sample Metrics Cost/visit Cost/case OR minutes L&D hours LOS # of comorbidities Population Health Management Per Capita Waste Per Encounter or Per Case Waste
  14. 14. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Ordering Waste Workflow Waste Defect Waste Ordering tests, care, substances and supplies that do not add value Variation in efficiency of delivering tests, care and procedures ordered Patient injuries incurred in delivering tests, care and procedures ordered 14 Three forms of waste
  15. 15. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Ordering Waste Workflow Waste Defect Waste Ordering of tests that are neither diagnostic nor contributory Variation in efficiency of delivering tests, care and procedures ordered Patient injuries incurred in delivering tests, care and procedures ordered Ordering Waste Ordering tests, care, substances and supplies that do not add value 15 Ordering waste
  16. 16. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Clinical Integration Construct Clinical Programs – ordering of care Primary Care Care Process Families e.g., Diabetes CV Care Process Families e.g., Heart Failure W&C Care Process Families e.g., Pregnancy GI Care Process Families e.g., Lower GI Disorders Resp- iratory Care Process Families e.g., Obstructive Lung Disorders Neuro Sciences Care Process Families e.g., Spine Disorders Musculo- skeletal Care Process Families e.g., Joint Replace- ment Surgery Care Process Families e.g., Urologic Disorders General Med Care Process Families e.g., Infectious Disease Oncology Care Process Families e.g., Breast Cancer Peds Spec Care Process Families e.g., Peds CV Surg Mental Health Care Process Families e.g., Depression
  17. 17. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Ordering of care Improvement initiative process Mapping of admin codes to HC clinical hierarchy Basic cohorts – admin rules Per Case Key Process Analyses Advanced cohorts - admin and clinical rules Care Process Models for KPA Care Process list AIM statement starter sets Prevention, treatment, & UM starter sets Process and outcome metrics & visualizations
  18. 18. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential 18 Wasteful Cardiac ventriculography to measure ejection fraction Contributory Two-view chest X-ray Arterial blood gases Diagnostic Cardiac echo to measure ejection fraction Brain natriuretic peptide (BNP) Ordering waste example
  19. 19. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Ordering Waste Workflow Waste Defect Waste Ordering tests, care, substances and supplies that do not add value Variation in OR room turnover (cycle time) or Emergency Care wait time Patient injuries incurred in delivering tests, care and procedures ordered Workflow Waste Variation in efficiency of delivering tests, care and procedures ordered 19 Workflow waste
  20. 20. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Primary Care Care Process Families e.g., Diabetes CV Care Process Families e.g., Heart Failure W&C Care Process Families e.g., Pregnancy GI Care Process Families e.g., Lower GI Disorders Resp- iratory Care Process Families e.g., Obstructive Lung Disorders Neuro Sciences Care Process Families e.g., Spine Disorders Musculo- skeletal Care Process Families e.g., Joint Replace- ment Surgery Care Process Families e.g., Urologic Disorders General Med Care Process Families e.g., Infectious Disease Oncology Care Process Families e.g., Breast Cancer Peds Spec Care Process Families e.g., Peds CV Surg Mental Health Care Process Families e.g., Depression ClinicalSupportServices(DeliveryofCare) Diagnostic Clinical Support Services (work flow models) (e.g., Pathology and Laboratory Medicine, Diagnostic Radiology) Ambulatory Clinic Clinical Support Services (work flow models) (e.g., Primary Care Clinics, Chronic Disease Specialty Clinics, Sub-specialty Clinics)) Acute Medical Clinical Support Services (work flow models) (e.g., Emergency Care, ICU/CCU/NICU/PICU, General Med-Surg) Invasive Clinical Support Services (work flow models) (Interventional Medical [e.g., cath lab, interventional radiology, GI lab, L&D, rad onc] and Surgical [e.g., amb, IP]) Therapeutic Clinical Support Services (work flow models) (e.g., Pharmacy, Transfusion Medicine, Respiratory Therapy, Physical, Occupational, Speech Therapy) Clinical Integration construct Clinical Support Services – delivery of care
  21. 21. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Mapping of client data to HC clinical hierarchy Triage of client data into care unit & ancillary depts Clinical department value stream maps Intra- & inter- departmental VSMs, A3s, & AIM statements Pareto and opportunity analyses Workflow (delivery of care) Improvement initiative process Process and outcome metrics & visualizations
  22. 22. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Workflow waste – surgical services
  23. 23. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential23 Workflow waste – surgical services reduce room turnover time
  24. 24. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Ordering Waste Workflow Waste Defect Waste Ordering tests, care, substances and supplies that do not add value Variation in efficiency of delivering tests, care and procedures ordered ADEs, transfusion reactions, pressure ulcers, HAIs, VTE, falls, wrong surgery Defect Waste Patient injuries incurred in delivering tests, care and procedures ordered 24 Defect waste (patient injury)
  25. 25. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Primary Care Care Process Families e.g., Diabetes CV Care Process Families e.g., Heart Failure W&C Care Process Families e.g., Pregnancy GI Care Process Families e.g., Lower GI Disorders Resp- iratory Care Process Families e.g., Obstructive Lung Disorders Neuro Sciences Care Process Families e.g., Spine Disorders Musculo- skeletal Care Process Families e.g., Joint Replace- ment Surgery Care Process Families e.g., Urologic Disorders General Med Care Process Families e.g., Infectious Disease Oncology Care Process Families e.g., Breast Cancer Peds Spec Care Process Families e.g., Peds CV Surg Mental Health Care Process Families e.g., Depression ClinicalSupportServices(DeliveryofCare) Diagnostic Clinical Support Services (work flow models) (e.g., Pathology and Laboratory Medicine, Diagnostic Radiology) Ambulatory Clinic Clinical Support Services (work flow models) (e.g., Primary Care Clinics, Chronic Disease Specialty Clinics, Sub-specialty Clinics)) Acute Medical Clinical Support Services (work flow models) (e.g., Emergency Care, ICU/CCU/NICU/PICU, General Med-Surg) Invasive Clinical Support Services (work flow models) (Interventional Medical [e.g., cath lab, interventional radiology, GI lab, L&D, rad onc] and Surgical [e.g., amb, IP]) Therapeutic Clinical Support Services (work flow models) (e.g., Pharmacy, Transfusion Medicine, Respiratory Therapy, Physical, Occupational, Speech Therapy) Clinical Integration construct Clinical Support Services – delivery of care
  26. 26. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Hospital-Acquired Condition (HAC) cohorts Analysis of frequency, costs, potential savings Patient injury Improvement initiative process Define criteria for PIPP intervention Define care units to which PIPPs apply PIPP surveillance process, outcome metrics & visualizations AIM statement starter sets PIPP intervention protocol starter sets Patient Injury Prevention Process (PIPP) starter set maps
  27. 27. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Defect waste – CLABSI prevention
  28. 28. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.com 2. Prioritization – Sample healthcare industry analyses
  29. 29. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential 29 Utilization versus prevention and treatment waste Utilization Management WastePer capita management (population focus) Per encounter and per case management (individual patient focus) Prevention and Treatment Waste Sample Metrics Admits/1000 members IP days/1000 members OP visits/1000 members Procedures/1000 members ED visits/1000 members Readmissions/1000 members Sample Metrics Cost/visit Cost/case OR minutes L&D hours LOS # of comorbidities To be included in future waste analyses (at such time as claims data are available) Population Health Management Included in today’s analysis (a subset of the total waste in the healthcare system) Per Capita Waste Per Encounter or Per Case Waste
  30. 30. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.comProprietary and Confidential Clinical Programs Key Process Analysis (KPA)
  31. 31. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Inpatient per case KPA Primary Care Care Process Families e.g., Diabetes CV Care Process Families e.g., Heart Failure W&C Care Process Families e.g., Pregnancy GI Care Process Families e.g., Lower GI Disorders Resp- iratory Care Process Families e.g., Obstructive Lung Disorders Neuro Sciences Care Process Families e.g., Spine Disorders Musculo- skeletal Care Process Families e.g., Joint Replace- ment Surgery Care Process Families e.g., Urologic Disorders General Med Care Process Families e.g., Infectious Disease Oncology Care Process Families e.g., Breast Cancer Peds Spec Care Process Families e.g., Peds CV Surg Mental Health Care Process Families e.g., Depression
  32. 32. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Inpatient per case KPA Clinic Care Outpatient Inpatient SNF LTCH/IRF Home Health Hospice $ 31.7 Billion 11.8% 77.6 Billion 28.8% 90.6 Billion 33.7% $ 29.7 Billion 11.0% $ 18.4 Billion 6.8% $ 10.1 Billion 3.7% $ 11.1 Billion 4.1% OutpatientClinic Care Inpatient SNF Home Health HospiceLTCH/IRF
  33. 33. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Inpatient per case KPA
  34. 34. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Top 10 Care Process Families account for over 40% of the opportunity Top 32 Care Process Families account for 80% of the opportunity X-Axis = Care Process Families by resources consumed (High to Low) Cumulative Care Process Family % of total resources Individual Care Process Family % of total resources Y-Axis=Percentoftotalresourcesconsumed Inpatient per case KPA
  35. 35. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential 35 Y-Axis=InternalVariationinResourcesConsumed Bubble Size = Case Count Bubble Color = Clinical DomainX Axis = 2012-2013 Variable Direct Cost 1 2 3 4 Inpatient per case KPA PCI
  36. 36. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential ~ $20,000 difference in Average Direct Costs between “highest cost” provider and “lowest cost” provider for patients with identical intermediate level severity scores GroupedbyAPRDRG–SeverityScore Bubble Size = Case Count for provider Bubble Color = APRDRG - Severity Score X Axis = Average Variable Cost per Case for provider Inpatient per case KPA
  37. 37. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Dr. J. 15 Cases $60,000 Avg. Cost Per Case Mean Cost per Case = $20,000 $40,000 x 15 cases = $600,000 opportunity Total Opportunity = $600,000 Total Opportunity = $1,475,000 $35,000 x 25 cases = $875,000 opportunity Total Opportunity = $2,360,000 Total Opportunity = $3,960,000 Cost Per Case, Vascular Procedures Inpatient per case opportunity analysis
  38. 38. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential GroupedbyAPRDRG–SeverityScore Bubble Size = Case Count for provider Bubble Color = APRDRG - Severity Score X Axis = Average Variable Cost per Case for provider Inpatient per case opportunity Waste reduction opportunity is calculated based on bringing the cases in each severity level of each APR-DRG down to the mean of the severity level
  39. 39. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential 39 Inpatient per case opportunity* Physician variation perspective * This $97 MM is based on the impact of variation in MD practice across all types of relevant inpatient care units
  40. 40. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.comProprietary and Confidential IP per case ordering waste Opportunity analysis
  41. 41. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential IP per case ordering waste Primary Care Care Process Families e.g., Diabetes CV Care Process Families e.g., Heart Failure W&C Care Process Families e.g., Pregnancy GI Care Process Families e.g., Lower GI Disorders Resp- iratory Care Process Families e.g., Obstructive Lung Disorders Neuro Sciences Care Process Families e.g., Spine Disorders Musculo- skeletal Care Process Families e.g., Joint Replace- ment Surgery Care Process Families e.g., Urologic Disorders General Med Care Process Families e.g., Infectious Disease Oncology Care Process Families e.g., Breast Cancer Peds Spec Care Process Families e.g., Peds CV Surg Mental Health Care Process Families e.g., Depression
  42. 42. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential IP per case ordering waste Sources of ordering variation within a case • Diagnostics • Laboratory tests • Diagnostic imaging studies • Therapeutics • Therapies (e.g., respiratory, physical, et al) • Substances (e.g., antibiotics, blood products) • Clinical supply chain (e.g., prosthetics, stents, synthetic bypass grafts, heart rhythm devices)
  43. 43. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential43 Home (Patient Portal) * To Invasive Care Processes Clinic Care Non-recurrent Clinic Care Chronic Acute Medical IP Med-Surg Acute Medical IP ICU Invasive Medical Invasive Surgical Diagnostic Work-up Bedside care Triage to Treatment Venue Substance Preparation Invasive* Subspecialist Chronic Disease Subspecialist Screening & Preventive Symptoms Sources of per case ordering waste Diagnostic algorithms Indications for Referral Indications for Intervention Triage Criteria Diagnostic Algorithms, Triage Criteria, Referral & Intervention Indications Utilization Management Knowledge Assets Substance Selection Substance Selection Clinical Supply Chain Management Procedure Treatment and Monitoring Algorithms Admission Order SetsAdmission Order Sets Supplementary Order Sets Pre-Procedure Order Sets Post- procedure Order Sets Discharge Bedside care practice guidelines, risk assessment and patient injury prevention protocols, bedside care procedures, transfer and discharge protocols Treatment and Monitoring Algorithms Health Maintenance and Preventive Guidelines Standardized Follow-up Post-acute care order sets IP (SNF, IRF) Home health Hospice Management of Preventive, Ambulatory, Acute Medical, Invasive & PAC Modules Prevention and Treatment Knowledge Assets Clinical ops procedure guidelines and patient injury prevention Post-procedure Care
  44. 44. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential IP per case ordering waste opportunity Care Process Family Total Variable Cost Total Variable Cost Opportunity % Opportunity Arthritis $4,495,738 $1,262,468 28.08% Pregnancy $3,386,142 $964,935 28.50% Lower GI disorders $9,223,075 $2,887,678 31.31% Pulmonary disorders $13,301,079 $4,112,305 30.92% Ischemic heart disease $16,422,491 $3,830,609 23.33% Heart failure $10,521,631 $3,151,318 29.95% Spine disorders $3,667,804 $868,486 23.68% Abdominal transplant $5,646,849 $1,150,355 20.37% Sepsis $11,766,105 $4,302,385 36.57% Infectious disease $9,757,995 $3,359,184 34.42% Abnormal newborn - 3A $3,633,453 $1,078,333 29.68% Vascular disorders $10,090,688 $2,978,748 29.52% GU disorders $5,743,735 $1,790,536 31.17% Abnormal newborn - 3B $5,504,113 $2,170,518 39.43% Other gastrointestinal disorders $6,150,878 $2,109,424 34.29% Heart rhythm disorders $7,745,049 $1,629,037 21.03% Trauma $5,481,067 $1,784,045 32.55% Intracranial disorders $4,655,176 $1,479,753 31.79% Sports medicine disorders $2,212,528 $616,926 27.88% Upper GI disorders $4,144,179 $1,239,599 29.91% Bone marrow procedures $6,001,248 $1,662,039 27.69% Chest procedures $2,943,145 $987,669 33.56% Heart and lung transplants $2,367,759 $654,981 27.66% TIA, stroke and paralysis $3,917,114 $1,311,687 33.49% Normal newborn $934,586 $97,998 10.49% Renal disorders $3,578,289 $1,306,072 36.50% Cancer therapeutic procedures $4,966,106 $2,057,475 41.43% Hematology $4,435,866 $1,839,409 41.47% Obstructive lung disease $3,598,005 $956,058 26.57% Biliary tract disorders $3,005,292 $849,573 28.27% Other cardiovascular disorders $3,084,102 $920,290 29.84% Liver disorders $3,662,416 $1,256,790 34.32% Pareto Total $186,043,705 $56,666,685 30.46% Ordering Waste * The $57 MM is based on the impact of variation in ordering of tests and services from ancillary (non-patient- care) departments (e.g., lab, imaging, pharmacy, therapies, supply chain, central services) adjusted by APR-DRG severity level
  45. 45. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Reducing per case ordering waste • Order sets. Evidence-based order sets for the Care Processes in the Pareto list to reduce variation in the ordering of simple diagnostic tests (lab, imaging) • Indications. Evidence-based indications and cost information to standardize utilization • Imaging tests (e.g., MRI, CT, US, nuclear scans) • Substances (e.g., utilization criteria for blood, antibiotics, total parenteral nutrition) • Major clinical supplies (e.g., joint prosthetics, cardiac and vascular stents, synthetic bypass grafts, heart rhythm devices, neurostimulators)
  46. 46. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Reducing per case ordering waste • Health Catalyst advanced applications. • High-level Care Process map laying out the scientific flow • Aim Packet with 2-5 Aim statements • Cohort definition to support the Aim Packet • Common metrics plus additional outcome, process and balance metrics to support the Aim Packet • Starter visualizations such as dashboards, scorecards, and/or interactive drill down reports
  47. 47. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.comProprietary and Confidential Workflow waste Opportunity analysis
  48. 48. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Primary Care Care Process Families e.g., Diabetes CV Care Process Families e.g., Heart Failure W&C Care Process Families e.g., Pregnancy GI Care Process Families e.g., Lower GI Disorders Resp- iratory Care Process Families e.g., Obstructive Lung Disorders Neuro Sciences Care Process Families e.g., Spine Disorders Musculo- skeletal Care Process Families e.g., Joint Replace- ment Surgery Care Process Families e.g., Urologic Disorders General Med Care Process Families e.g., Infectious Disease Oncology Care Process Families e.g., Breast Cancer Peds Spec Care Process Families e.g., Peds CV Surg Mental Health Care Process Families e.g., Depression ClinicalSupportServices(DeliveryofCare) Diagnostic Clinical Support Services (work flow models) (e.g., Pathology and Laboratory Medicine, Diagnostic Radiology) Ambulatory Clinic Clinical Support Services (work flow models) (e.g., Primary Care Clinics, Chronic Disease Specialty Clinics, Sub-specialty Clinics)) Acute Medical Clinical Support Services (work flow models) (e.g., Emergency Care, ICU/CCU/NICU/PICU, General Med-Surg) Invasive Clinical Support Services (work flow models) (Interventional Medical [e.g., cath lab, interventional radiology, GI lab, L&D, rad onc] and Surgical [e.g., amb, IP]) Therapeutic Clinical Support Services (work flow models) (e.g., Pharmacy, Transfusion Medicine, Respiratory Therapy, Physical, Occupational, Speech Therapy) Per case workflow waste opportunity Clinical Support Services
  49. 49. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Source: CA Office of State- wide Health Planning and Development (OSHPD) Annual financial reports for 2011 351 hospitals Exclusions: Kaiser State hospitals Small psych H’s Clinical Support Service Clinical Department Expenses by Clinical Department % of Total Cum % Acute Medical Med-Surg Acute Care 8,661,146,370 19.2% 19.2% Therapeutic Substance Preparation 4,662,386,338 10.3% 29.6% Therapeutic Clinical Equipment, Supplies & Services* 4,477,744,993 9.9% 39.5% Acute Medical Med-Surg Intensive Care 3,995,060,038 8.9% 48.3% Invasive Inpatient Surgery 3,788,458,767 8.4% 56.8% Diagnostic Laboratory 2,808,517,363 6.2% 63.0% Diagnostic Diagnostic Imaging 2,730,552,915 6.1% 69.0% Acute Medical Emergency Care 2,559,406,510 5.7% 74.7% Ambulatory Clinic Care 2,247,089,922 5.0% 79.7% Invasive Interventional Medical 1,495,321,329 3.3% 83.0% Invasive Labor & Delivery 1,159,880,048 2.6% 85.6% Therapeutic Respiratory Services 1,150,072,297 2.6% 88.1% Acute Medical Med-Surg Subacute Care 986,656,683 2.2% 90.3% Therapeutic Rehabilitation Services 912,246,803 2.0% 92.4% Therapeutic Dietary 616,656,823 1.4% 93.7% Ambulatory Research 413,491,699 0.9% 94.6% Therapeutic Other Ancillary Services 410,550,042 0.9% 95.6% Ambulatory Home Health Care Services 388,565,601 0.9% 96.4% Therapeutic Renal Dialysis 316,846,172 0.7% 97.1% Acute Medical Cardiology Services 314,448,422 0.7% 97.8% Acute Medical Social Services 285,775,151 0.6% 98.4% Invasive Outpatient Surgery 296,517,893 0.7% 99.1% Acute Medical Nursery 252,110,537 0.6% 99.7% Acute Medical Medical Transport 58,853,840 0.1% 99.8% Acute Medical Neurology Services 55,618,598 0.1% 99.9% Ambulatory Other Ambulatory 36,537,764 0.1% 100.0% 45,080,512,918 100.0% * Med supplies sold to pts, DME, central services Per case workflow KPA - OSHPD
  50. 50. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential CA OSHPD Data Per case workflow KPA - OSHPD
  51. 51. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Per case workflow KPA Care Process Family Total Variable Cost Total Variable Cost Opportunity % Opportunity Arthritis $34,257,013 $4,315,132 12.60% Pregnancy $34,604,134 $3,652,085 10.55% Lower GI disorders $26,006,611 $5,598,156 21.53% Pulmonary disorders $21,083,792 $4,592,859 21.78% Ischemic heart disease $16,680,163 $3,241,204 19.43% Heart failure $21,605,230 $4,914,260 22.75% Spine disorders $28,559,591 $5,332,532 18.67% Abdominal transplant $24,209,074 $1,835,063 7.58% Sepsis $16,822,816 $4,909,676 29.18% Infectious disease $17,688,735 $4,145,960 23.44% Abnormal newborn - 3A $22,057,913 $4,283,595 19.42% Vascular disorders $13,975,364 $3,505,618 25.08% GU disorders $17,328,064 $2,730,267 15.76% Abnormal newborn - 3B $14,361,738 $4,060,365 28.27% Other gastrointestinal disorders $12,900,700 $2,909,332 22.55% Heart rhythm disorders $10,963,720 $2,061,714 18.80% Trauma $12,895,138 $3,498,346 27.13% Intracranial disorders $13,429,232 $3,017,544 22.47% Sports medicine disorders $11,905,026 $2,764,691 23.22% Upper GI disorders $9,088,177 $1,808,059 19.89% Bone marrow procedures $6,160,908 $862,841 14.01% Chest procedures $7,842,200 $1,586,223 20.23% Heart and lung transplants $8,075,094 $1,083,284 13.42% TIA, stroke and paralysis $6,193,324 $1,373,756 22.18% Normal newborn $8,898,584 $1,125,381 12.65% Renal disorders $6,264,978 $1,685,801 26.91% Cancer therapeutic procedures $4,194,787 $1,187,025 28.30% Hematology $4,592,082 $1,021,023 22.23% Obstructive lung disease $5,228,844 $1,220,267 23.34% Biliary tract disorders $5,775,453 $947,907 16.41% Other cardiovascular disorders $5,368,812 $1,126,570 20.98% Liver disorders $4,517,543 $1,097,365 24.29% Pareto Total $453,534,839 $87,493,901 19.29% Workflow Waste * The $87 MM is based on variation in efficiency of care delivery for inpatient care units (e.g., ICU, general med-surg acute care, sub-acute care, observation) adjusted by APR-DRG severity level
  52. 52. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Reducing per case workflow waste • Value Stream Maps (VSMs). VSMs for the clinical departments in the Pareto list • Improved capture of time stamps. • Today’s Lean/TPS improvement systems are highly manual – automation is essential to ability to scale • Timely and complete capture of time stamps is key to automation of workflow improvement systems • Success in wringing out workflow waste will depend on improved focus on completeness and timeliness of time stamp capture in the EMR
  53. 53. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Reducing per case workflow waste • Health Catalyst advanced applications. • Value Stream Map laying out the workflow to be improved (Health Catalyst has about 70 starter set VSMs) • Aim Packet with 2-5 Aim statements • Cohort definition to support the Aim Packet • Common metrics plus additional outcome, process and balance metrics to support the Aim Packet • Starter visualizations such as dashboards, scorecards, and/or interactive drill down reports
  54. 54. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.comProprietary and Confidential Defect (patient injury) waste Opportunity analysis
  55. 55. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential55 HAC cohorts/registries • Ventilator-associated pneumonia (VAP) • Adverse drug events (ADEs)
  56. 56. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential California Data 2,358 1,278 758 739 424 251 212 122 111 13 6 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Hospital Acquired Conditions 2011 California Hospitals All Payers Total count 6,272 * Added in 2011 5,921 4,555 3,918 2,735 1,785 555 320 284 34 11 - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Hospital Acquired Conditions 2010 Medicare US Hospitals Total count 20,118 Medicare Data Count Count
  57. 57. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Condition Estimated cost % of Total Cum % Cases Cost/Case Vascular Cath-Assoc Infection 405,299,703$ 51.9% 51.9% 2318 174,849$ Pressure Ulcers Stages III and IV 96,917,626$ 12.4% 64.3% 402 241,089$ Iatrogenic Pneumothorax 89,402,081$ 11.4% 75.8% 747 119,682$ Falls and Trauma 67,772,069$ 8.7% 84.4% 1134 59,764$ Cath-Assoc Urinary Tract Infection 59,991,394$ 7.7% 92.1% 720 83,321$ Surgical Site Infection 37,792,448$ 4.8% 97.0% 233 162,199$ Venous thromboembolism (VTE) 8,544,237$ 1.1% 98.1% 204 41,884$ Manifestions of Poor Glycemic Control 6,561,973$ 0.8% 98.9% 119 55,143$ Foreign Object Retained After Surgery 6,347,387$ 0.8% 99.7% 110 57,704$ Air Embolism 1,395,845$ 0.2% 99.9% 13 107,373$ Blood Incompatability 849,397$ 0.1% 100.0% 6 141,566$ 780,874,160$ 6,006 130,016$ Cost estimated from gross charges based on cost to charge ratio = 0.254); Savings calculated from cost of DRG with HAC subtracted from average cost of DRG (for MS-DRGs and HAC with at least 5 cases). Estimated cost per case for all cases in California = $12,700 (3.7 million cases). Michael Dietzel analysis. Estimated cost of defects 2011 OSHPD data
  58. 58. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Estimated potential savings Patient injury (defect) waste Analytic methodology For each MS-DRG and Hospital Acquired Condition (HAC) with at least five cases: • Define the average total cost for each case which includes a Hospital Acquired Condition (defect) • Define the average cost of the base MS-DRG case (without complication or comorbidity) • Estimated potential savings (if HAC patient injury were eliminated) = cost of HAC case minus cost of base case
  59. 59. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential - 100,000,000 200,000,000 300,000,000 400,000,000 Hospital Acquired Conditions Estimated Total Cost of Injury Cases 2011 California Hospitals All Payers Total count of patients 6,006 without duplicates *New HAC added in 2011 - 100,000,000 200,000,000 300,000,000 400,000,000 Hospital Acquired Conditions Estimated Savings of Injury Cases 2011 California Hospitals All Payers Total count of patients 6,006 without duplicates Patient injury waste opportunity
  60. 60. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Focus on workflow/defect waste CMS’s establishment of penalties weighted by measurement domain creates an incentive to choose CLABSI and CAUTI improvement initiatives (65% of total)
  61. 61. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Reducing per case defect waste • Define for each type of defect a Patient Injury Prevention Process (PIPP). • Screening cohort of patients who may be at risk • Screening criteria/tool (e.g., Braden Scale) to define patients who are at risk • Clinical operations protocol to be implemented with at-risk patients to prevent injury • Tracking system to detect injuries and near misses • Treat patient injury as a “process failure” to be subjected to root-cause analysis rather than an “incident” to be reported
  62. 62. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Reducing per case defect waste • Health Catalyst advanced applications. • Patient Injury Prevention Process map (combination of workflow VSM and scientific flow; e.g., Health Catalyst maps for CLABSI, CAUTI, pressure ulcers) • Aim Packet with 2-5 Aim statements • Cohort definitions to support the Aim Packet • Common metrics plus additional outcome, process and balance metrics to support the Aim Packet • Starter visualizations such as dashboards, scorecards, and/or interactive drill down reports
  63. 63. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential © 2013 Health Catalyst www.healthcatalyst.comProprietary and Confidential Why focus on workflow and defect waste?
  64. 64. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential IP per case waste reduction opportunity Facility perspective Per case ordering waste Per case workflow waste Per case defect waste 64 $144 MM ~ 23% Total IP per case waste $57 MM* ~ 9 % (~ 40% of total of 23%) $87 MM* ~ 14 % (~ 60% of total of 23%) In Progress < 1* % * Preliminary Findings Work in Progress
  65. 65. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Focus on workflow and defect waste • Size of the opportunity (14%) and aura of safety • Payment structure schizophrenia (see next slide) • Reduction in workflow waste benefits the system under all forms of payment • Reduction in defect waste benefits the system for all Medicare patients • CMS penalties – helps system reduce or eliminate penalties under readmission reduction and HAC • Clinical teams are clinical operations-centric rather than physician-centric (organizational readiness)
  66. 66. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential = Negative Impact = Positive or Negative = Positive Impact Care Process Family Knowledge Asset Discounted FFS Per Diem Per Case Bundled Per Case Condition Capitation Full Capitation CMS Commercial CMS Commercial Workflow Diagnostic Variation Standing Orders MedicationSelection Triage Patient Safety Ambulatory Treatment and Monitoring Indications for Referral Indications for Intervention Payment structure considerations
  67. 67. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential CMS penalty considerations
  68. 68. © 2013 Health Catalyst www.healthcatalyst.com Proprietary and Confidential Thank you

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