WHA Improvement Forum For November    “Building the Business Case for Quality”  

1. WHA Improvement Forum • For November    • “Building the Business Case for Quality” •   • Tom Kaster • Courtesy Reminders: • Please place your phones on MUTE unless you are speaking (or use *6 on your keypad) • Please do not take calls and place the phone on HOLD during the presentation.

3. The Value Equation Increase Quality = Increase Value Decrease Cost = Increase Value Increase Quality and Decrease Cost = Accelerated Increase in Value

4. Institute of Medicine (IOM): Cost of Poor-Quality of Care in Lives and Dollars The scope of poor quality of care (3 forms) • Overuse: Provide unneeded care • Underuse: Fail to provide needed care • Misuse: Make a mistake and cause harm

5. IOM: Overuse Overuse occurs when a drug or treatment is given without medical justification. • Examples includes: • Treating people with antibiotics for simple infections • Failing to follow effective options that cost less or cause fewer side effects • Avoiding overuse can decrease cost

6. Overuse Examples Both examples can have a negative impact to the patients and to costs: • Prescription overuse • Prescribing antibiotics for a viral illness • Using brand name when generics are available • MRI overuse • When use appropriate MRI’s are valuable • Often MRI’s do not change the treatments prescribed or a patients outcome.

7. IOM: Underuse Underuse is when doctors or hospitals neglect to give patients medically necessary care or to follow proven health care practices • Examples include: • Failure to give beta-blocking drugs to people having heart attacks • People receiving necessary preventative care like mammograms or vaccinations • Avoiding underuse improves quality

8. Consequences of Underuse • As many as 91,000 Americans die each year because they do not receive evidence-based care for chronics conditions like HBP, diabetes and heart disease • Billions of dollars a year are spent reacting to the consequences of underuse

9. IOM: Misuse Misuse occurs when a patient does not fully benefit from a treatment because of a preventable problem, or when a patient is harmed by a treatment. • Some examples include: • Prescribing a drug that a patient is allergic to • The appropriate care protocol is not given resulting in patient harm • Avoiding misuse improves quality

10. Consequences of Misuse • Billions of dollars a year are spent on helping patients recover from health care harm • Conservatively between 44,000 and 98,000 people die annually from preventable errors

11. Building the Business Case

12. Obstacles to Building a Business Case for Quality • The complexity of healthcare • The fragmentation of payer types • Lack of reliable performance indicators that correlate QI to cost savings • The perception that waste elimination will negatively effect patient care • The perception that increased efficiencies may reduce FTE’s

13. Preparing Yourself to Talk the Talk • Learn and Understand Healthcare Financial Terms and Payer Dynamics • Develop methodologies to measure the financial impact of improvement (ROI etc…) • Understand the importance of connecting financial impacts to gain management support

14. Dark Green vs. Light Green Money

15. Examples of Light Green • Organize equipment and supplies room to reduce hunting and searching time • Streamline workflow to increase efficiencies • Enable care givers more time at the bedside to meet patient needs • Reduces patient harm from falls, pressure ulcers • Make work more enjoyable and experience less attrition • Improves patient experience • Improves HCAHPS scores

16. Light Green to Dark Green May 2, 2012 (San Francisco, California)— • Blood-product management plan put together by the Virginia Cardiac Surgery Quality Initiative (VCSQI) helped optimize the process and lowered the overall use of transfusions, cutting related mortality by half. • Savings of $50 million statewide over two years http://www.medscape.com/viewarticle/763272

17. Light Green to Dark Green A house-wide hourly rounding initiative… …Requires the improvement of overall efficiencies: • Nurses spend their time in more value added activities at the bedside … Which is shown to improve patient and family satisfaction on HCAHPS scores … Which will positively effect Value Based Purchasing factors • Reduce Harm by lessoning Falls and Pressure Ulcers ... Which will reduce average length of stay for our Medicare patients • Decrease overall medication doses per stay … Which in turn will improve profit margins for fixed payment patients

18. IHI: Examples of Dark Green Savings

19. IHI: Equations to Measure Quality in Dark Green Dollars • Total Wages per Admission • Total Medication Cost per Admission

20. IHI: Total Wages per Admission Equation Total wages per admission (Worked hours per patient day) (Average wage per hour) (Patient days per admission)

21. IHI: Total Wages per Admission Equation Average wage per hour: • Cost associated with recruiting and training new staff for vacant positions • Increased cost associated with contract labor to fill vacancies • Premium overtime pay

22. IHI: Total Wages per Admission Equation Worked hours per patient day: • Inappropriate ICU staff time due to discharge delays to other units • Excess budgeted hours due to uneven staffing needs due to poor scheduling of surgeries with disregards to workflow • Excess budgeted hours due to poor prediction of demand

23. IHI: Total Wages per Admission Equation Patient days per admission: • Excess patient day due to delays in discharge and poor coordination of the process • Excess patient days due to lack of setting and executing daily goals for the patient, family and care team • Excess patient days associated with and adverse event or complication

24. IHI: Total Medication Cost per Admission Equation Average cost per dose: • Excess cost of brand names when generic are available • Excess cost associated with failure to make a timely switch in Med Administration mode (IV to Oral) • Excess cost associated with overuse of expensive meds when less expensive alternatives are available

25. IHI: Total Medication Cost per Admission Equation Number of doses per admission: • Excess cost associated with failure to stop medications appropriately (continuing preventative antibiotic use longer than 24 hours after surgery) • The medication cost associated with treating an adverse events

26. IHI: Tying Equations to Dollars Reduction in overall SSI: • Patient days per admissions: Decreased • Number of doses per admission: Decreased • Average length of stay: Decreased

27. The Financial Impact of Quality • Medicare Fixed Payments (DRG’s) • Privately Insured • Uninsured • Regulatory

28. The Financial Impact of Quality Medicare Fixed Payments--Diagnosis Related Groups (DRG)

29. Consequences of Low Quality • Medicare Fixed Payments--Diagnosis Related Groups (DRG) • Falls / PUP / CAUTI / Falls • Efficiencies / Increase Length of Stay / Increase of Rx Cost • Increased financial deficit • Increased harm to patient

30. The Financial Impact of Quality: Privately Insured

31. Consequences of Low Quality • Privately Insured • Falls / PUP / CAUTI / Falls • Efficiencies / Increase Length of Stay / Increase of Rx Cost • Increased financial revenues • Eventual lower negotiated reimbursements • Eventual pressures to adjust or change payment models • Increased harm to patient

32. The Financial Impact of Quality: Uninsured

33. Consequences of Low Quality • Uninsured • Falls / PUP / CAUTI / Falls • Efficiencies / Increase Length of Stay / Increase of Rx Cost • Increase financial burden on patients • Increased likelihood of unpaid claims • Increase charitable care • Increased physical and or financial harm to patient

34. Federal Pressures to Improve Quality(do not pertain to CAH’s) • Hospital-specific historical quality performance compared to national performance standards • Dynamic programs that change each year • Measures and domains (additions/deletions) • Performance standards (moving target) • Increased financial exposure each year (max exposure shown below) Slide provided by the Hospital Association of New York State

35. Takeaways • Improving quality and / or reducing cost increases value to the patient • Financial and Quality leaders can drive huge improvement and cost reductions by teaming up and learning each other’s world • As data becomes more available, so will the ability to tie ROI to quality • No matter what the industry, improving value and reducing cost equates to long term sustainability • Even if a quality improvement project does not impact the bottom line it may still be the right thing to do

36. Next Month

37. Resources • Institute for health improvement– Increasing Efficiency and Enhancing Value in Health Care • Institute of Medicine: Overuse, Underuse and Misuse of Medical Care • Blood Use Article: www.medscape.com/viewarticle/763272 • Hospital Association of New York State - Regulatory Pressures to Improve Quality

38. Thank You! Questions Please complete 3 question survey when closing webinar window.