© 2013 health catalyst proprietary and confidential © 2013 health catalyst proprietary and...

© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential


December 17, 2013

How to Drive ROI in Your Health Care Improvement Projects


PresentersBobbi Brown, Vice President of Financial Engagement, Health Catalyst. Ms. Brown started her healthcare career with software sales and service at McKesson in the Technology Solutions Group. She worked at Intermountain Healthcare before moving to Sutter Health and, later, Kaiser Permanente, where she served as Vice President of Financial Planning and Performance. At Intermountain Health Care, she partnered with clinical teams to analyze and measure financial impact of the clinical programs. She holds an MBA from the Thunderbird School of Global Management as well as a BA in Spanish and Education from Misericordia University.

Leslie Hough Falk, RN, MBA, PMP, Health Catalyst. Prior to joining Health Catalyst, Leslie held positions as a Nurse Informaticist, Director of Biomedical Engineering, Clinical Engineer for Kaiser Permanente-Northern Region and Pediatric ICU RN. Ms. Falk also worked with Hewlett-Packard in several clinical, marketing, sales and support leadership roles. She holds a Master of Science degree in Community Counseling from Seattle Pacific University as well as an MBA and Bachelor of Science in Engineering from the University of Nevada, Las Vegas. She is also a certified Project Management Professional (PMP), Lean Green Belt and Information Privacy Professional (CIPP/CIPP IT).

© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 3

Agenda

• Why IT ROI is increasingly important in Health Care improvement projects

• ROI in Health Care versus other industries

• Health Catalyst 4- step approach for driving ROI


Poll Question #1

What is your primary area of focus? Physician/Provider

Nursing

Finance

Information System

Other



The Increasing Importance of ROI in Health Care Improvement Projects

5


Stagnating Margins

6

Source: Medpac report March 2013

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-20%

-15%

-10%

-5%

0%

5%

10%

15% Medicare Margins for Hospitals

IP

OP

Overall


Competing Trends

Accountable Care Organizations

Shared savings for groups of doctors and hospitals, and

other providers who deliver quality care and spend wisely.

Bundled Payments Payment arrangements that include financial andperformance accountability for episodes of care.

Health Care Organizations

Improve Quality Reduce Costs

Increase Value

Value Based Purchasing Links payment more directly to the quality of care.

Population Health Balancing the

need for individuals and populations while caring for a larger number of patients.

Reduced Readmissions Becoming more

efficient at preventing services that once contributed to the bottom line.

Eliminate Waste Improving

quality and reducing costs while meetingexpanded regulatory data collection and surveillance requirements.



IT ROI in Health Care versus Other Industries

8


ROI Measurements and Complexity of Environment

Source: Journal of Healthcare Information Management — Vol. 17, No. 4

Phase 1Investments with Direct Cost

Savings or Revenue Increases (e.g. financial systems)

Phase 2 Investments to improve

Productivity and Reporting (e.g. department systems)

Phase 3Investments to improve Quality of

Product or Service (e.g. clinical systems)

More

Hard

Complexity of the Environment into which IT Investment is Made

Easy

Measurement of Return on Investment

Less


Unique Health Care Governance and Payment Model

Source: Journal of Healthcare Information Management — Vol. 17, No. 4

Physicians

Patient

Other Caregivers

Facility

Payer

PaysPays Enrolls

Provides care to


HIMSS Health Value STEPS Model

Source: HIMSS Resource Center. http://www.himss.org/valuesuite


Use Case Example

Scenario: Clinical Improvement project

Project Goals: Shift clinical resources from surveillance to interventions, and reduce Catheter-Associated Urinary Tract Infections by XX %

Team: Providers, nursing, patient safety and quality, information systems

Missing results: Financial impact of reduced CAUTIs such as length of stay and improved productivity related to decreased surveillance activities

Team feedback: “Yes, we should consider LOS and productivity gains. However, we don’t track that. I’m sure someone else in the hospital does but we are clinicians.”


Poll Question #2

Do you currently measure ROI in your Health Care IT improvement projects?

Always

Sometimes

Not usually

No

Unsure



The Health Catalyst 4-step ROI Approach

14


Step 4: Evaluate Costs,Revenue & Direct Benefits

Step 3: Recruit, Train,Plan and Implement

Step 2: Begin to Quantify ROI

Four Step Approach

Step 1: Define the Projectand Business Need

• State proposal• Justify business need


Project Proposal: Heart Failure Readmission Analytics

Proposal

Expand capabilities of the enterprise data warehouse and purchase an advanced heart failure application with a total cost of $400,000. Focus will be readmission rate.

Business Need

Cardiovascular clinical program is our largest program. Heart failure readmit rate has been climbing over the past three years and is now above the national average at 26%. Due to the readmit rate in 2014, Sample Medical Center received a penalty of 0.4% from CMS.

Sample Proposal

• State the proposal succinctly in one to two sentences

• The business need is a justification for the proposal that ties into the overall organization strategy


Four Step Approach• Identify all costs

• Estimate benefits

• Identify direct benefits

• Identify indirect or intangible benefits and set improvement targets

• Identify all revenue opportunities

• Document assumptions

• Perform a sensitivity analysis

• Identify risks and alternatives






Step Two: Direct Benefit CategoriesGeneral categories –

I. Enhanced efficiency and productivity

• Examples: reductions in FTEs or less overtime; business process improvement; supply chain standardization allowing lower supply costs; increased departmental capacity; and reductions in capital expense


Customer ExampleEnhanced Efficiency and Productivity

“Our clinicians thought that the EHR would be a silver bullet to get the data they needed for quality improvement and operational reporting and they blamed IT when the information wasn’t forthcoming. …Implementing an EDW should really be an appendix to the implementation of an EHR because the surge of data is just unbelievable and the appetite for it is huge.”

– Myra Davis, M.E., VP of Information Services.

Objective

• Meet the increasing demands by clinicians and operations for EHR data and reports

• Reduce reporting costs and free IT resources to focus on analysis versus report writing

• Reduce turnaround time on remaining EHR report requests

Health Catalyst Solution

• Late-Binding™ Data Warehouse

• Foundational Applications

• Discovery Applications

• Advanced Applications

• Installation Services

• Improvement Services

Results to date

• 67% average savings on labor costs

• Average time to build reports declined from 97 hours to under 30 hours

• 1 EDW report = 10 EHR reports

• 25% faster turnaround on remaining EHR reports


Step Two: Direct Benefit CategoriesGeneral categories –

I. Enhanced efficiency and productivity

• Examples: reductions in FTEs or less overtime; business process improvement; supply chain standardization allowing lower supply costs; increased departmental capacity; and reductions in capital expense

II. Clinical improvement and waste reduction

• Examples: lowering LOS; reductions in uncompensated hospital readmissions; lower medication cost per case or per capita; fewer ICU days; and patient safety improvements leading to fewer complications or medical errors


Ordering Waste Workflow Waste Defect Waste

Ordering of tests that are neither diagnostic nor

contributory

Variation in OR room turnover (cycle time) or

Emergency Care wait time

ADEs, transfusion reactions, pressure ulcers, HAIs, VTE,

falls, wrong surgery

21

Types of Waste

Variation in OR room turnover (cycle time) or Emergency Care wait times

ADEs, transfusion reactions, pressure ulcers, HAIs, VTE, falls, wrong surgery


Customer ExampleClinical Improvement

22

Objective

• Define Heart Failure (HF) baseline measures for 30 and 90-day readmissions rates

• Implement evidence-based practice interventions to drive HF readmission rate reductions

• Establish balance metrics including ED visits, observation days and patient satisfaction

• Develop sustaining processes for evaluating readmission rates to ensure continuous process improvement


• Late-Binding TM data warehouse that enables faster time-to-value

• Integration of clinical, patient satisfaction and financial data to establish baseline, ongoing and balance measures

• Discovery, Foundational and Advanced HF applications including cohort finder, registry and evidence- based clinical content

• Healthcare analytic visualization including gauges and trend lines for at-a-glance view

Results to date

• Seasonally adjusted rate reduction of 21% in 30-day and 14% in 90-day HF readmissions

• 2X increase in the number of phone calls made to patients within 48 hours of discharge

• Average of 63 % increase in physician medication reconciliation within 48 hours of discharge

• Follow-up appointment intervention baseline and balance measures established


Customer ExampleOrdering Waste

“We knew we couldn’t completely create predictor models, as science isn’t that refined. But we have reduced the number of chest X-rays to a very respectable level. We have been able to minimize quite a bit of waste in other areas too, so overall, this approach in using the analytics has really helped us to manage our disease processes”.

Dr. Charles Macias, TCH Attending Physician and DirectorEvidence Based Outcome Center.

Objective

• Improve clinical outcome for asthma patients across the care continue

• Better manage populations in a new Valued Based Purchasing environment

• Measure and ensure sustained clinical quality improvements


• Late-Binding™ Data Warehouse

• Key Process Analysis (KPA) Application

• Population Analytics Advanced Application- Asthma Module

• Installation Services

• Clinical Improvement Services

Results to date

• Decreased average LOS by 11 hours

• Achieved and sustaineda 49% decrease in unnecessary ChestX-rays over 16 months

• 80% order set utilization …67% sustained increase over 8 months

• 90% usage of asthma action plan by providers


Step Two: Indirect Benefits and Revenue Opportunities• Can be more difficult to measure

• Longer-term benefits

• Example: an improved medical outcome such as a reduction in future hospitalizations associated with neonatal respiratory distress syndrome (RDS), which will require long-term analysis to reveal an impact on costs


Customer ExampleIndirect Benefits: Opportunity Cost

Objective

• Define CLABSI and CA-UTI baseline and on-going CLABSI and CA-UTI rate measures

• Implement evidence-based practice interventions to drive CLABSI and CA-UTI rate reductions

• Leverage National Healthcare Safety Network (NHSN) definitions and calculation algorithms

• Shift clinical resources from surveillance and chart abstraction to interventions


• Late-Binding TM data warehouse that enables faster time-to-value

• Discovery, Foundational and Advanced ID applications including cohort finder, registry and evidence- based clinical content

• IDEA platform that tracked intervention compliance within days versus months

• Visualization and Gantt charts for clinicians that provide data behind NHSN algorithm results in one consolidated view

Results to date

• Surveillance requirements reduced by 90%

• Increased clinical resources on the floor to drive interventions

• Opportunity costs savings exceeding an estimated $1M in year 1 and $100K annually as a result of not purchasing, maintaining and supporting a one-off measurement and tracking system

• 164% increase in CLABSI maintenance bundle compliance


Customer ExampleShared Savings

• 75 percent reduction in rate of elective deliveries occurring prior to 39 weeks of gestation in the first six months

• 6-figure bonus payment from payer for exceeding target reduction rate


Sensitivity and Risk AnalysisExamples

Sensitivity Analysis- modeling various assumptions

• What if we can lower the readmit rate by 20%?

• What if we make two follow-up calls?

• What if we use a nurse for all follow-up calls?

Risk Analysis- describing concerns and tactics

• Physician lead is new in position

• Finance will provide education

• Nurse manager respected in position and can assist in orientation

.


Health Catalyst Clinical Improvement Financial Tool

• Financial framework to help clinicians work with their finance team member(s) to estimate quantitative and qualitative costs and benefits

• Download the ROI Executive Brief and Tool at:www.healthcatalyst.com/driveroi


Four Step Approach

• Establish multi-disciplinary outcomes-improvement teams

• Agree on business objectives and an Aim statement

• Agree on ROI measures

• Provide timely executive updates






Accomplishments Next Steps Issues / Help needed

Cardiovascular: Heart Failure Date: [complete] Overall Status

Risks and Uncertainties

Recruit /Train Kickoff AIM Intervention Rollout plan Results

Month Year Month Year Month Year Month Year Month Year Month/Year

Leadership teamMission, charter, roles confirmed

Review draft cohort and data

Finalize cohort Define rollout plan Review initial results

Content and Analytics Leader

Review AIM optionsData quality issues identified

Identify intervention(s)

Guidance team validation

Implementation plan adjusted

Guidance teamBest practice gathering

Direct observation Direct observationSolicit front-line plan input

Review lessons learned

Workgroup teamProfile prelim. data and cohort

Prioritize, select AIM Solicit front line input Finalize rollout planCreate AIM statement #2

Training workshop 2-3 AIM candidatesAdditional cohort criteria

Analytics dev & testGuidance team validation

Repeat process



Project Progress

KeyNotstarted

Inprocess

Done well

Someconcerns

Strongconcerns

Sample Long Term AIM Goal

To achieve and sustain a 30% reduction in the 30-day and a 15% reduction in 90-day all cause readmission rates for patients with heart failure by November 2014, and sustained reduction in readmission rates through 2015.

Short Term Project Goal

Define and rollout 30-day and 90-day baseline measures and three process interventions: medication reconciliation; post discharge appointment; and, follow-up phone call by January 1, 2014 - track compliance toward long-term heart failures readmission rate reductions.

Lau

nch

/Ro

llo

ut

dat

e :

XX

Key Success and Financial Measures Target Actuals

Readmission rates: 30-day and 90-day %

Balance measures: ED visits and observation stays #

Intervention compliance rates %

Project costs (e.g., resources, travel, healthcare care analytic apps …) $

Opportunity costs (e.g., not purchasing a Point Solution, no reduction in Medicare reimbursements …) $

Direct benefits: productivity (e.g., previous manual data pulls…); waste reduction (e.g., length of stay….) $

Indirect benefits (e.g., patient satisfaction…) $

Long term project ROI %


Four Step Approach

• Identify all project costs

• Ensure nothing else has changed

• Perform Financial ROI calculations

• Review ROI calculations with the team

• Make adjustments

• Monitor and ensure sustained results






The Opportunity for ChangeTaking the next step…

• Download the Health Catalyst ROI Executive Brief

www.healthcatalyst.com/driveroi

• Contact us to learn more about our solutions, ROI modeling and communication tools

www.healthcatalyst.com/company/contact-us


Questions

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