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iHT2
          The Health IT Summit in Beverly Hills
Intercontinental 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
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.
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)
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
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
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 care

3. Unacceptablerates of preventable care-
  associated patient injury and death

4. 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)
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
Total U.S. fiscal exposures
 By layering on future obligations, the total net prevent value (PV) of debt rises
to 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.
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
Health care payments will be cut
We have found proven solutions
   Dr. Alan Morris, LDS Hospital, 1991:
NIH-funded randomized controlled trial
assessing an "artifical lung" vs. standard ventilator management
for acute respiratory distress syndrome (ARDS)

discovered large variations in ventilator settings
across and within expert pulmonologists

created a protocol for ventilator settings in the control arm of
the trial

Implemented 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
Challenges building guidelines

Lack of evidence for best practice
- Level 1, 2, or 3 evidence available only about 15-20% of the time

Expert consensus is unreliable
- experts can't 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 don't guide practice
- systems that rely on human memory execute correctly
  ~50% of the time (McGlynn: 55% for adults, 46% for children)
Dr. Alan Morris, LDS Hospital, 1991
Results:
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 Baseline
protocols ("bundles") to standardize care while
encouraging clinicians to vary based on individual patient needs;
then feeding back variation and patient outcome data in a
"learning system"
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




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                 Ja




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                          Ja
                          Se




                          Se




                          Se
                 M




                          M




                          M




                          M
                 M




                          M




                          M
                          N




                          N




                          N
                07




                                      Month
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




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                        ay
                      Ja




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                      Se




                      Se




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                      Se
                      M




                      M




                      M




                      M




                      M




                      M
                   04




125+ fewer inpatient deaths per year                                        Month
Lesson 1




   We count our successes in lives ...
Lesson 2




              Very often,

    better care is cheaper care ...
Aligning financial incentives
Neonates > 33 weeks gestational age
 who develop respiratory distress syndrome
Treat at birth hospital with nasal CPAP (prevents
 alveolar collapse), oxygen, +/- surfactant

Transport 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   278,368
Other commerical payers           429,101     223,215   205,886
              Payer total       1,981,803   1,109,070   872,733
Current payment mechanisms

Actively incent overutilization: do more, get paid
more - even when there is no health benefit

I am paid to harm my patients (paid more for
complications)

Actively disincents innovation that reduces
costs through better quality (a key success factor for
the rest of the U.S. economy)

Very strong, deep, wide evidence showing
exactly this effect throughout U.S. healthcare
% Gross Domestic Product




                                                                       15
                                                                                           25




        0
                                     5
                                                     10
                                                                                      20
19
   60




        148
19
  65

19
   70




            357
19
  75

19
   80




            1,106
19
  85

19
   90



                     2,281
19
  95
                                                                                                Bending the cost curve




                             3,762




20
   00
                                     4,729




20
  05
                                             6,683




20
   10
                                                          9,173




20
  15
        0
                                         5
                                                                        12,357




                                                                  10
                                                                                 15
                                                                                           20




                    Total $ per US citizen (thousands)
Capitation makes a comeback

1. 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 adjustment


2. Represent "managed care at the bedside"
   - ask clinical teams at the bedside to manage the care, not distant
      and disengaged insurance companies


3. 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").
Our answer:

   A Shared Accountability Organization:
      Physicians,
      hospitals,
      payers, and
      patients
with aligned professional and financial incentives
                      to seek
              the best medical result
          at the lowest necessary cost
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 undertreat
Payments targeted at break-even, most efficient cost of operations;
 all upside $$ contained in shared savings
Hitting measured quality thresholds a prerequisite
  to participate in shared savings
Involve employed and affiliated physician groups
  via partner health plans
Process management is the key
higher quality drives lower costs
under capitation, all of the savings come
 back to clinical process managers
more 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 control
key difference: it takes a team
Process management means health IT
1.   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; don't
     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)
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"

  • 1. iHT2 The Health IT Summit in Beverly Hills Intercontinental 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. 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. 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. 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. 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. 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 care 3. Unacceptablerates of preventable care- associated patient injury and death 4. 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. 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. Total U.S. fiscal exposures By layering on future obligations, the total net prevent value (PV) of debt rises to 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. 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. Health care payments will be cut
  • 11. We have found proven solutions Dr. Alan Morris, LDS Hospital, 1991: NIH-funded randomized controlled trial assessing an "artifical lung" vs. standard ventilator management for acute respiratory distress syndrome (ARDS) discovered large variations in ventilator settings across and within expert pulmonologists created a protocol for ventilator settings in the control arm of the trial Implemented 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. Challenges building guidelines Lack of evidence for best practice - Level 1, 2, or 3 evidence available only about 15-20% of the time Expert consensus is unreliable - experts can't 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 don't guide practice - systems that rely on human memory execute correctly ~50% of the time (McGlynn: 55% for adults, 46% for children)
  • 13. Dr. Alan Morris, LDS Hospital, 1991 Results: 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 Baseline protocols ("bundles") to standardize care while encouraging clinicians to vary based on individual patient needs; then feeding back variation and patient outcome data in a "learning system"
  • 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. 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 04 125+ fewer inpatient deaths per year Month
  • 16. Lesson 1 We count our successes in lives ...
  • 17. Lesson 2 Very often, better care is cheaper care ...
  • 18. Aligning financial incentives Neonates > 33 weeks gestational age who develop respiratory distress syndrome Treat at birth hospital with nasal CPAP (prevents alveolar collapse), oxygen, +/- surfactant Transport 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 652,103 373,735 278,368 Other commerical payers 429,101 223,215 205,886 Payer total 1,981,803 1,109,070 872,733
  • 19. Current payment mechanisms Actively incent overutilization: do more, get paid more - even when there is no health benefit I am paid to harm my patients (paid more for complications) Actively disincents innovation that reduces costs through better quality (a key success factor for the rest of the U.S. economy) Very strong, deep, wide evidence showing exactly this effect throughout U.S. healthcare
  • 20. % Gross Domestic Product 15 25 0 5 10 20 19 60 148 19 65 19 70 357 19 75 19 80 1,106 19 85 19 90 2,281 19 95 Bending the cost curve 3,762 20 00 4,729 20 05 6,683 20 10 9,173 20 15 0 5 12,357 10 15 20 Total $ per US citizen (thousands)
  • 21. Capitation makes a comeback 1. 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 adjustment 2. Represent "managed care at the bedside" - ask clinical teams at the bedside to manage the care, not distant and disengaged insurance companies 3. 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. Our answer: A Shared Accountability Organization: Physicians, hospitals, payers, and patients with aligned professional and financial incentives to seek the best medical result at the lowest necessary cost
  • 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 undertreat Payments targeted at break-even, most efficient cost of operations; all upside $$ contained in shared savings Hitting measured quality thresholds a prerequisite to participate in shared savings Involve employed and affiliated physician groups via partner health plans
  • 24. Process management is the key higher quality drives lower costs under capitation, all of the savings come back to clinical process managers more 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 control key difference: it takes a team
  • 25. Process management means health IT 1. 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; don't 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. Better has no limit ... an old Yiddish proverb