This presentation shows how to remove unnecessary Healthcare Costs using Quality, Safety, and High Reliability Tools.

1. Strategies for …
Removing Millions in
Unnecessary Costs
John Byrnes, MD
Clinical Associate Professor
MSU, College of Human Medicine
Founder & Sr. Partner
Byrnes Healthcare Group

2. What’s Going On in Our Hospitals?

3. Findings supported by Classen and Leape. PAE: Preventable Adverse Events
440,000 Deaths per Year “PAEs account for “roughly
one-sixth of all deaths that
occur in the U.S. each year.”
Sources:))James,)J,)“New,)Evidence6Based)Estimate)
of)Patient)Harms)Associated)with)Hospital)Care,”)
Journal(of(Patient(Safety,)September)2013.H
H

4. “Medical Errors May Be the Country’s Third
Leading Cause of Death”
–The Advisory Board Company, Sept. 24, 2013

5. Answer:
High Reliability Organizations
A Culture of SAFETY

6. Safety Culture Transformation + HRD
Used with permission, HDVCH, Spectrum Health
76%
reduction
at
2
years
Errors Resulting in Patient Harm
Over
90%
reduction
at
4
years
High

7. Safety Culture
Ignites Hospital
Turnaround
Before – mired in controversy and almost
closed by the community
No harm events in over 835 days
Top 100 Hospital last three years in a row

8. “Quality and Safety (and their related process
improvements) is the next frontier of cost
management.”
–Joseph J. Fifer, FHFMA, CPA
President & CEO, HFMA

9. PROCESS IMPROVEMENT
Lean, Toyota, Six Sigma

10. Lean QI Initiative - CV Service Line
Cardiac Cath Lab
Savings = $6.7 million
On time starts
Throughput & room turnover
Open and unused supplies ($3M)
Preference card variation
Non indicated add-on procedures
Number of stents
Appropriateness

11. Medication Administration Process
125 Process Steps Before < 25 Steps After

12. Disclaimer, AKA The Fine Print
All calculations performed by the Director of Decision Support, assorted financial analysts, and
verified by a Chief Financial Officer.
No calculations performed by this doctor person.

13. $68,000,000
Clinical QI Can Remove $MILLIONS in Unnecessary Costs

14. IMPACT at One Hospital
Revenue
$32 Million
Savings
$36 Million
Total = $68 Million
Hospital Margin
$74 Million
Study on select conditions through November, 2008; Pediatrics, ICUs, Trauma not included.

15. $32 Million Revenue Impact
❖ ABC Health P4P Plan $ 4,274,211
❖ XYZ P4P Plan 19,663,131
❖ CMS Market Basket Update* 8,107,477
❖ TOTAL $ 32,044,819
*Now VBP + >50% upside

16. Eliminating
Complications
Saved $36 M
Study on select conditions through November, 2008; Pediatrics, ICUs, Trauma not included.

17. Average Costs of Common Complications
❖ Decubitus Ulcer $28,272
❖ Post-op Deep Wound Infection $27,814
❖ Clostridium Difficile Colitis $25,401
❖ Sepsis $23,451
❖ Reopen Surgical Site $19,442
❖ Venous Thrombosis $15,976
❖ Pulmonary Embolism $16,331
❖ UTI $ 9,637
Richard Fuller, Elizabeth McCullough, Mona Bao, Richard Averill, Estimating the Costs of
Potentially Preventable Hospital Acquired Complications, Health Care Finance Review,
Summer, 2009, 30:17-­‐‑32

18. PCI Cost Opportunity Report
Over 50
Templates

19. The Role Finance Can Play in Saving $$$ on Reporting Systems
How you can help
your clinical partners
❖ Use internal cost accounting system
❖ Internal analysts build clinical profiles
❖ Design model to quantitate savings
❖ Perform cost opportunity analysis
❖ Co-present results with CMO/CQO
❖ Do it yourself with existing internal
resources
Strengthen your clinical reporting program by tossing your clinical reporting vendor

20. DVT $180,000
ARF $820,000
Abcess $75,000
Int. Obstruction $545,000
Acc. Op. Laceration $203,000
Resp. Failure $971,000
Wound Infection $260,000
TOTAL $3,054,000
Physician Leaders Save Money
A Quarter Time
Physician Leader
• Episode of Care: Colon Surgery
• 7 Preventable Complications
A small group of physician leaders can remove $ Millions in unnecessary costs

21. Hospital Acquired Infection Rates
Adult Critical Care - 2008 to 2009
MRSA, Acinetobacter, Pseud/Sten/
Serratia, and C. diff Infections
20
15
10
5
0
Jan 08 - Dec 08 Jan 09 - Dec 09
Infection Rate per 1000 Pt. Days
42% Decrease
126 Fewer Patients
126 x $14,000 = $1.8 M

22. Hospital Acquired Infection Rates - 2008 to 2009
Children’s Hospital
HDVCH HA MRSA, VRE, ESBL/
Amp C, C. diff, and RSV
2
1.5
1
0.5
0
Jan 08 - Dec 08 Jan 09 - Dec 09
The Intervention Was
___________________
Infection Rate per 1000 Pt. Days
46% Decrease
40 Fewer Patients
Combined Results
166 x $14,000 = $2.3 M

23. Preventing Readmissions - Total Cost of Care
Hysterectomy 6.7% to 3.8% $ 42,000
Hysterectomy CA 4.5% to 10.6% $ 153,000
Lumbar fusion 5.4% to 4.2% $ 830,000
Peds Chemo 9.9% to 8.3% $ 685,000
AMI 12.7% to 8.3% $2,085,000
PCI 8.2% to 5.3% $ 618,000
EP Ablation 4.1% to 3.3% $ 56,000
Cholecystectomy 6.9% to 3.9% $ 50,000
TOTAL $4,519,000
Clinical QI Can Remove $MILLIONS in Unnecessary Costs

24. Prevent
Readmissions
Majority of Readmissions:
1. Didn’t fill prescriptions
2. Didn’t get timely follow-up
3. Care coordination

25. Opportunity Analysis - 10 Years Later
Clinical QI Can Remove $MILLIONS in Unnecessary Costs
$45,000,000 Remaining Opportunity

26. Opportunity Analysis
How Much Potential
Savings (Waste)?
❖ Small Multi-Hospital System
❖ Observed to Expected Complication Rate
❖ >2,000 Complications
❖ >$60,000,000
Clinical QI Can Remove $MILLIONS in Unnecessary Costs

27. 3 High-Impact Tools
SAFETY - High-Reliability
Save Lives
Save $
Clinical QI
Performance
Improvement

28. $68,000,000
$60,000,000
$45,000,000
$4,500,000
$66,800,000
$3,054,000
$2,300,000
$6,700,000
Summary of Savings:
$ Millions
One hospital: cost + additional revenue
Small hospital system - complications
Opportunity after 10 years - one hospital
Readmissions prevented
Malpractice claim impact of HRO program
Colon Surgery - 7 Complications
Hospital Acquired Infections - one hospital
Cath Lab
TOTAL $256,354,000

29. Key Points
❖ Part time physician leader ROI is +
❖ Data - you already have everything you need
❖ Copy the finance process
❖ One program - Cost, Quality, Safety, Efficiency
❖ Take a leadership position
❖ Biggest returns - Variation, complications, errors

30. Ask Your CMO/CQO
❖ Which complications have your targeted ?
❖ Have a list of high-volume complications (and their
associated cost impact) in your pocket to start the
conversation …

31. Everyday, Remember Why You’re There …
They Entrust Us With Their Lives, Let’s Not Let Them Down !

32. Improving Quality & Safety Together
Resource Page:
www.johnbyrnesmd.org/hrtcfos
John Byrnes MD
Trainer, Consultant & Keynote Speaker
Founder, Sr. Partner
Byrnes Healthcare Group
Phone 616-240-9686
john@johnbyrnesmd.org
www.johnbyrnesmd.org