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EPSi Kaleida Health Success Story
- 1. 800.334.8534 www.allscripts.com Kaleida Health BUFFALO, NEW YORK, U.S.A. Overview CLIENT PROFILE: • Multi-entity health system • 4 acute care hospitals • 2 long-term care facilities • Homecare services • 10,000+ employees • 59,000 annual discharges • 540,000 annual outpatient visits • $1.2 billion in net revenue SOLUTIONS: • Allscripts EPSi™ modules: ºº Budget Manager ºº Cost Manager ºº Product Line Analyst ºº Capital Budget Manager ºº Management Dashboard ºº Productivity Manager ºº Strategic Product Budgeting • Sunrise™ Patient Financial Manager Targeting utilization and length of stay to reduce cost of care Kaleida Health (Buffalo, New York, U.S.A.) employs Allscripts EPSi™ to find opportunities to improve operational efficiency and reduce the total cost of care. By setting specific utilization and length of stay targets by service line, Kaleida Health was able to save $20 million in one year and maintain high quality of care. Experience Kaleida Health is the largest healthcare provider in Western New York. More than one million patients choose a Kaleida Health facility annually, including Buffalo General Medical Center, DeGraff Memorial Hospital, Gates Vascular Institute, Millard Fillmore Suburban Hospital, Women & Children’s Hospital of Buffalo and numerous community healthcare centers. Kaleida Health also provides services through two long-term care facilities, behavioral health programs and the Visiting Nursing Association of WNY, Inc. Kaleida Health faces the same financial pressures as many other healthcare organizations. As more patients move to observation and outpatient care, inpatient admissions are falling. “Margins are declining,” Kaleida Health Senior Director of Decision Support, Budget and Reporting Christine Lanza said. “Providing care in observation costs us the same amount, but we will only get half of the reimbursement as income.” It’s imperative to cut costs, but Kaleida Health wanted to develop realistic targets for the operating budget. “Rather than assign arbitrary figures, we used EPSi to develop a more strategic approach to reducing our costs,” Lanza said. Solutions Lanza reports that Kaleida Health used several Allscripts EPSi modules to improve operational efficiencies and reduce expense across the organization. First, Kaleida Health used existing benchmarks to identify total cost opportunities in two specific areas, utilization and length of stay (LOS), for each service line. Next, the team sat down with physicians to gain buy-in for the budget process. USING BENCHMARKS TO IDENTIFY AREAS WITH THE MOST OPPORTUNITY Kaleida Health started with a set of external benchmarks already familiar to its clinical staff. Through its Physician Gain Sharing Program, Kaleida Health used reports with “best practice norms” from a third-party company. The reports pull together similar services, adjust for severity levels and give the best-practice expectations for cost and length of stay for each service. The team decided to only tackle direct costs, because it is easier to affect change in those areas. SUCCESS STORY
- 2. Using EPSi Product Line Analyst reporting, Kaleida Health compared these expected amounts with actual costs. The difference between the two became the total cost opportunity. “We knew it wasn’t realistic to recover every penny of these amounts,” Lanza said. “For example, one facility showed $127 million in opportunity, but we started with a reasonable goal of reducing costs by 10% the first year.” GAINING BUY-IN AND BUILDING THE BUDGET MODEL A data-driven approach to budgeting helped Kaleida Health achieve consensus with physicians on goals. Using EPSi Strategic Product Budgeting, Kaleida Health built a base budget model and applied targeted amounts for utilization and LOS. Custom Product Line Analyst reports helped quantify direct cost as a percentage of gross revenue. “Until we used benchmarks to reduce spend, we didn’t have buy-in,” Lanza said. “Now we have reasonable targets to drive costs out with operational efficiency.” Using dashboards in EPSi, Kaleida Health measure each product line every month against these targets. The team also included clinical quality metrics to make sure none of those dropped as a result of cost reduction. A separate physician-led work group meets weekly to review dashboards and make changes. OUTCOMES: • Reduced overtime and shifts equivalent to 307 FTEs in nine months, saving $15 million • Reduced Length of Stay (LOS) from 6.65 to 5.36 days in seven months, saving $7 million • Reduced supply costs by $4 million in one year • Reduced direct cost per case by 5% in one year Kaleida Health “Rather than assign arbitrary figures, we used EPSi to develop a more strategic approach to reducing our costs.” Christine Lanza Senior Director of Decision Support Kaleida Health $10200 $10300 $10400 $10500 $10600 $10700 $10800 $10900 $11000 Q2Q1Q4Q3Q2 Direct Cost per Case (by quarter) Q U A R T E R COST
- 3. Outcomes Through this strategic budgeting process, Kaleida Health has achieved several significant cost reductions. “Each services line has its own LOS and utilization and per patient cost targets,” Lanza said. “Breaking it into smaller pieces makes it more actionable.” For example, Kaleida Health identified an opportunity in its perioperative process. While Kaleida Health has its own pre-admission testing area, patients were not required to use it. Unfortunately patients would present for surgery without required tests, causing unnecessary delays, cancellations and unused Operating Rooms (ORs). Through this budget process, Kaleida Health required more patients to use its pre-admission testing and improved the number of first-case starts in the operating room. Lanza characterizes the overall reductions as “dramatic.” LOS rates between November 2013 and May 2014 decreased from 6.65 to 5.36 days. “Even when you take into consideration that short-term stays are disappearing, LOS is still dropping,” she said. The LOS reduction saved Kaleida Health an estimated $7 million. Another example is a more efficient use of staffing. The number of full-time equivalents (FTEs) dropped from 2,811 in September of 2013 to 2,504 in May of 2014. Lanza clarifies that most of these hours did not result in job loss, but were the result of overtime, open positions, excess staffing levels or unproductive grids. “Each services line has its own LOS and utilization and per patient cost targets…Breaking it into smaller pieces makes it more actionable.” Christine Lanza Senior Director of Decision Support Kaleida Health SUCCESS STORY 5.0 5.2 5.4 5.6 5.8 6.0 6.2 6.4 6.6 6.8 MAMFJDN Average LOS (by month) M O N T H DAYS
- 4. Copyright © 2015 Allscripts Healthcare Solutions, Inc. EPSi16_EPSi_KaleidaHealth_NY_01-12-15 “Patient satisfaction has gone up and quality measures have also improved as we’ve reduced costs.” Christine Lanza Senior Director of Decision Support Kaleida Health Kaleida Health SUCCESS STORY REDUCING THE COST, WHILE MAINTAINING THE QUALITY OF CARE Making changes to improve operational efficiency has not affected clinical outcomes. “Patient satisfaction has gone up and quality measures have also improved as we’ve reduced costs,” Lanza said. She reports that the organization plans to address the outpatient side of the business after finding a relevant benchmark. With the capabilities of Allscripts EPSi, Kaleida Health expects to continue to improve operational and cost efficiency. It enables the organization to better meet the challenging financial environment of healthcare today and to better prepare for the future.