advanced efforts to identify and reduce waste in healthcare delivery

© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential


January 16, 2014 – David A. Burton, MD

Advanced Efforts to Identify and Reduce Waste in Healthcare Delivery


Proprietary and Confidential © 2013 Health Catalystwww.healthcatalyst.com

1. Constructs for understanding healthcare waste


Clinical Integration ConstructClinical Programs – ordering of care

Primary Care

CareProcessFamilies

e.g.,Diabetes

CV

CareProcessFamilies

e.g.,Heart

Failure

W&C

CareProcessFamilies

e.g., Pregnancy

GI

CareProcessFamilies

e.g., Lower GIDisorders

Resp-iratory

CareProcessFamilies

e.g., Obstructive Lung

Disorders

Neuro Sciences

CareProcessFamilies

e.g.,Spine

Disorders

Musculo-skeletal

CareProcessFamilies

e.g., Joint

Replace-ment

Surgery

CareProcessFamilies

e.g.,Urologic

Disorders

GeneralMed

CareProcessFamilies

e.g.,Infectious Disease

Oncology

CareProcessFamilies

e.g., BreastCancer

Peds Spec

CareProcessFamilies

e.g.,Peds

CV Surg

Mental Health

CareProcessFamilies

e.g., Depressio

n


Clinical Integration ConstructClinical Support Services – workflow and defects

Primary Care

CareProcessFamilies

e.g.,Diabetes

CV

CareProcessFamilies

e.g.,Heart

Failure

W&C

CareProcessFamilies

e.g., Pregnancy

GI

CareProcessFamilies


Resp-iratory

CareProcessFamilies


Disorders

Neuro Sciences

CareProcessFamilies

e.g.,Spine

Disorders

Musculo-skeletal

CareProcessFamilies

e.g., Joint

Replace-ment

Surgery

CareProcessFamilies

e.g.,Urologic

Disorders

GeneralMed

CareProcessFamilies


Oncology

CareProcessFamilies

e.g., BreastCancer

Peds Spec

CareProcessFamilies

e.g.,Peds

CV Surg

Mental Health

CareProcessFamilies

e.g., Depressio

n

Clin

ical

Sup

port

Ser

vice

s (D

eliv

ery

of C

are)

Diagnostic Clinical Support Service (work flow models)(e.g., Pathology and Laboratory Medicine, Diagnostic Radiology)

Ambulatory Clinic Clinical Support Service (work flow models)(e.g., Primary Care Clinics, Chronic Disease Specialty Clinics, Sub-specialty Clinics))

Acute Medical Clinical Support Service (work flow models)(e.g., Emergency Care, ICU/CCU/NICU/PICU, General Med-Surg)

Invasive Clinical Support Service (work flow models)(Interventional Medical [e.g., cath lab, interventional radiology, GI lab, L&D, rad onc] and Surgical [e.g., amb, IP])

Therapeutic Clinical Support Service (work flow models)(e.g., Pharmacy, Transfusion Medicine, Respiratory Therapy, Physical, Occupational, Speech

Therapy)


Organization of teamsClinical and technical

Provides steady state domain governance and oversight

GUIDANCE TEAM

Refines Work Group output and leads implementation

CLINICALIMPLEMENTATIO

NTEAM

Provides l forum to develop and/or refine clinical content and analytics feedback

WORKGROUP

Supports developmentof clinical content and

analytics feedback

CONTENT AND

ANALYTICSTEAM

Provides overall governance and prioritization of initiatives

SENIOR EXECUTIVE

LEADERSHIP TEAM

Chief Knowledge Officer


Technical support personnel


=

Organization of clinical teams

Women & Newborn’s Clinical Program Guidance Team

Pregnancy SAM

PregnancyMD LeadRN SME

Knowledge Manager

DataArchitect

Application Administrator

RN, Clinical Ops Director

Guidance Team MD lead(e.g., Pregnancy MD Lead)

= Subject Matter Expert

= Data Capture

= Data Provisioning & Visualization

= Data Analysis

Normal Newborn SAM

NL Newborn MD LeadRN SME

GynecologySAM

GynMD LeadRN SME

• Permanent teams

• Integrated clinical and technical members

• Technical personnel support multiple packets

AbNL NB 3-A SAM

AbNL NBMD LeadRN SME


Repeatable system for deploymentKickoff AIM Statement Implementation

Design Launch Approval Results Review

• Mission• Cohort Discover• Data Analysis and

Review• BMJ Best Practices• Building Multiple

Potential AIMstatements

• Supplement BMJ content

• Refine Cohort• Refine Metrics• Develop Draft

Visualizations• Develop

Recommended AIM statement #1

• Cluster Reps Obtain Front Line Input

• Finalize Cohort• Develop Additional

metrics based on feedback

• Develop Additional Visualizations to support

• PDSA cycle

• Cluster Reps Obtain Front Line Input

• Improvement Plan • Implementation Plan• Develop cluster rep

assignments, and deliverables

• Collect cluster rep feedback

• Prepare Initial Results from AIM statement #1

• Summarized report for historical review

• Refine, recommend AIM statement #2

MonthlyTasks and

Checkpoints

7 Steps(Work Streams)1. Gather knowledge assets

2. Define cohort

3. Select Aim Statement

4. Select, build & refine metrics

5. Develop implementation plan

6. Implement plan

7. Measure progress

Select Initial Metric Build and Refine Build and Refine Build and Refine



Population Health Management construct


Population Health ManagementMedicare fee-for-service payments by venue - 2011

OutpatientClinic Care Inpatient SNF Home Health Hospice

$ 31.7 Billion11.8%

77.6 Billion28.8%

90.6 Billion33.7%

$ 29.7 Billion11.0%

$ 18.4 Billion6.8%

$ 10.1 Billion3.7%

Clinic Care Outpatient Inpatient SNF LTCH/IRF Home Health Hospice

$ 11.1 Billion4.1%

LTCH/IRF

© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential11

Home(Patient Portal)

* To Invasive Care Processes

Clinic CareNon-recurrent

Clinic CareChronic Acute Medical

IP Med-SurgAcute Medical

IP ICU

Invasive Medical

Invasive Surgical

Diagnostic Work-up

Bedside care

Triage to Treatment Venue

Substance Preparation

Invasive* Subspecialist

Chronic Disease

Subspecialist

Screening & Preventive Symptoms

Population Health ManagementAnatomy of Healthcare Delivery

Diagnostic algorithms

Indications for Referral

Indications for Intervention

Triage Criteria

Diagnostic Algorithms, Triage Criteria, Referral & Intervention Indications

Utilization Management

Knowledge Assets

Substance Selection

Substance Selection

Clinical Supply Chain Management

ProcedureTreatment and

Monitoring Algorithms

Admission Order SetsAdmission Order Sets

Supplementary Order Sets

Pre-Procedure Order Sets

Post-procedure Order Sets

Discharge

Bedside care practice guidelines, risk assessment and patient injury prevention protocols, bedside care procedures, transfer and discharge protocols

Treatment and Monitoring Algorithms

Health Maintenance and Preventive Guidelines

Standardized Follow-up

Post-acute care order setsIP (SNF, IRF)Home healthHospice

Management of Preventive, Ambulatory, Acute Medical, Invasive & PAC Modules

Prevention and Treatment Knowledge

Assets

Clinical ops procedure guidelines and patient injury prevention

Post-procedure Care



Waste construct


13

Utilization management waste and prevention and treatment waste


WastePer capita management(population focus)

Per encounter and per case management

(individual patient focus)

Prevention and Treatment

Waste

Sample Metrics

Admits/1000 membersIP days/1000 membersOP visits/1000 membersProcedures/1000 membersED visits/1000 membersReadmissions/1000 members

Sample Metrics

Cost/visitCost/caseOR minutesL&D hoursLOS# of comorbidities

Population Health Management

Per Capita Waste

Per Encounter or Per Case

Waste


Ordering Waste Workflow Waste Defect Waste

Ordering tests, care, substances and

supplies that do not add value

Variation in efficiency of delivering tests, care

and procedures ordered

Patient injuries incurred in delivering tests, care and procedures ordered

14

Three forms of waste



Ordering of tests that are neither diagnostic nor

contributory




Ordering Waste



15

Ordering waste


Clinical Integration ConstructClinical Programs – ordering of care

Primary Care

CareProcessFamilies

e.g.,Diabetes

CV

CareProcessFamilies

e.g.,Heart

Failure

W&C

CareProcessFamilies

e.g., Pregnancy

GI

CareProcessFamilies


Resp-iratory

CareProcessFamilies


Disorders

Neuro Sciences

CareProcessFamilies

e.g.,Spine

Disorders

Musculo-skeletal

CareProcessFamilies

e.g., Joint

Replace-ment

Surgery

CareProcessFamilies

e.g.,Urologic

Disorders

GeneralMed

CareProcessFamilies


Oncology

CareProcessFamilies

e.g., BreastCancer

Peds Spec

CareProcessFamilies

e.g.,Peds

CV Surg

Mental Health

CareProcessFamilies

e.g., Depressio

n


Ordering of careImprovement initiative process

Mapping of admin codes to HC

clinical hierarchy

Basic cohorts –admin rules

Per Case Key Process Analyses

Advanced cohorts - admin

and clinical rules

Care Process Models for KPA

Care Process list

AIM statement starter sets

Prevention, treatment, & UM

starter sets

Process and outcome metrics & visualizations


18

Wasteful

Cardiac ventriculography to measure ejection fraction

Contributory

Two-view chest X-rayArterial blood gases

Diagnostic

Cardiac echo to measure ejection fraction

Brain natriuretic peptide (BNP)

Ordering waste example





Variation in OR room turnover (cycle time) or

Emergency Care wait time


Workflow Waste



19

Workflow waste


Primary Care

CareProcessFamilies

e.g.,Diabetes

CV

CareProcessFamilies

e.g.,Heart

Failure

W&C

CareProcessFamilies

e.g., Pregnancy

GI

CareProcessFamilies


Resp-iratory

CareProcessFamilies


Disorders

Neuro Sciences

CareProcessFamilies

e.g.,Spine

Disorders

Musculo-skeletal

CareProcessFamilies

e.g., Joint

Replace-ment

Surgery

CareProcessFamilies

e.g.,Urologic

Disorders

GeneralMed

CareProcessFamilies


Oncology

CareProcessFamilies

e.g., BreastCancer

Peds Spec

CareProcessFamilies

e.g.,Peds

CV Surg

Mental Health

CareProcessFamilies

e.g., Depressio

n

Clin

ical

Sup

port

Ser

vice

s (D

eliv

ery

of C

are)

Diagnostic Clinical Support Services (work flow models)(e.g., Pathology and Laboratory Medicine, Diagnostic Radiology)

Ambulatory Clinic Clinical Support Services (work flow models)(e.g., Primary Care Clinics, Chronic Disease Specialty Clinics, Sub-specialty Clinics))

Acute Medical Clinical Support Services (work flow models)(e.g., Emergency Care, ICU/CCU/NICU/PICU, General Med-Surg)

Invasive Clinical Support Services (work flow models)(Interventional Medical [e.g., cath lab, interventional radiology, GI lab, L&D, rad onc] and Surgical [e.g., amb, IP])

Therapeutic Clinical Support Services (work flow models)(e.g., Pharmacy, Transfusion Medicine, Respiratory Therapy, Physical, Occupational, Speech

Therapy)

Clinical Integration constructClinical Support Services – delivery of care


Mapping of client data to HC

clinical hierarchy

Triage of client data into care unit & ancillary depts

Clinical department value

stream maps

Intra- & inter- departmental

VSMs, A3s, & AIM statements

Pareto and opportunity

analyses

Workflow (delivery of care)Improvement initiative process

Process and outcome metrics & visualizations


Workflow waste – surgical services


Workflow waste – surgical services

reduce room turnover time







ADEs, transfusion reactions, pressure ulcers,

HAIs, VTE, falls, wrong surgery

Defect Waste


24

Defect waste (patient injury)


Primary Care

CareProcessFamilies

e.g.,Diabetes

CV

CareProcessFamilies

e.g.,Heart

Failure

W&C

CareProcessFamilies

e.g., Pregnancy

GI

CareProcessFamilies


Resp-iratory

CareProcessFamilies


Disorders

Neuro Sciences

CareProcessFamilies

e.g.,Spine

Disorders

Musculo-skeletal

CareProcessFamilies

e.g., Joint

Replace-ment

Surgery

CareProcessFamilies

e.g.,Urologic

Disorders

GeneralMed

CareProcessFamilies


Oncology

CareProcessFamilies

e.g., BreastCancer

Peds Spec

CareProcessFamilies

e.g.,Peds

CV Surg

Mental Health

CareProcessFamilies

e.g., Depressio

n

Clin

ical

Sup

port

Ser

vice

s (D

eliv

ery

of C

are)






Therapy)

Clinical Integration constructClinical Support Services – delivery of care


Hospital-Acquired Condition (HAC)

cohorts

Analysis of frequency, costs, potential savings

Patient injury Improvement initiative process

Define criteria for PIPP intervention

Define care units to which PIPPs

apply

PIPP surveillance process,

outcome metrics & visualizations

AIM statement starter sets

PIPP intervention protocol starter

sets

Patient Injury Prevention

Process (PIPP) starter set maps


Defect waste – CLABSI prevention


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2. Prioritization – Sample healthcare industry analyses


29

Utilization versus prevention and treatment waste


WastePer capita management(population focus)

Per encounter and per case management

(individual patient focus)

Prevention and Treatment

Waste

Sample Metrics

Admits/1000 membersIP days/1000 membersOP visits/1000 membersProcedures/1000 membersED visits/1000 membersReadmissions/1000 members

Sample Metrics

Cost/visitCost/caseOR minutesL&D hoursLOS# of comorbidities

To be included in future waste analyses

(at such time as claims data are available)

Population Health Management

Included in today’s analysis(a subset of the total waste in the healthcare system)

Per Capita Waste

Per Encounter or Per Case

Waste



Clinical ProgramsKey Process Analysis (KPA)


Inpatient per case KPA

Primary Care

CareProcessFamilies

e.g.,Diabetes

CV

CareProcessFamilies

e.g.,Heart

Failure

W&C

CareProcessFamilies

e.g., Pregnancy

GI

CareProcessFamilies


Resp-iratory

CareProcessFamilies


Disorders

Neuro Sciences

CareProcessFamilies

e.g.,Spine

Disorders

Musculo-skeletal

CareProcessFamilies

e.g., Joint

Replace-ment

Surgery

CareProcessFamilies

e.g.,Urologic

Disorders

GeneralMed

CareProcessFamilies


Oncology

CareProcessFamilies

e.g., BreastCancer

Peds Spec

CareProcessFamilies

e.g.,Peds

CV Surg

Mental Health

CareProcessFamilies

e.g., Depressio

n



Clinic Care Outpatient Inpatient SNF LTCH/IRF Home Health Hospice

$ 31.7 Billion11.8%

77.6 Billion28.8%

90.6 Billion33.7%

$ 29.7 Billion11.0%

$ 18.4 Billion6.8%

$ 10.1 Billion3.7%

$ 11.1 Billion4.1%

OutpatientClinic Care Inpatient SNF Home Health HospiceLTCH/IRF


Top 10 Care Process Families account for

over 40% of the opportunity

Top 32 Care Process Families account for

80% of the opportunity

X-Axis = Care Process Families by resources consumed (High to Low)

Cumulative Care Process Family % of total resources

Individual Care Process Family % of total resources

Y-A

xis

= Pe

rcen

t of t

otal

reso

urce

s co

nsum

edInpatient per case KPA


35

Y- A

xis =

Inte

rnal

Var

iatio

n in

Res

ourc

es C

onsu

med

Bubble Size = Case Count Bubble Color = Clinical DomainX Axis = 2012-2013 Variable Direct Cost

1

2

3

4


PCI


~ $20,000 difference in Average Direct Costs between “highest cost” provider and “lowest cost” provider for patients with identical intermediate level severity scores

Gro

uped

by

AP

R D

RG

– S

ever

ity S

core

Bubble Size = Case Count for provider

Bubble Color = APRDRG - Severity Score

X Axis = Average Variable Cost per Casefor provider



Dr. J.15 Cases$60,000 Avg. Cost Per Case

Mean Cost per Case = $20,000

$40,000 x 15 cases = $600,000 opportunity Total Opportunity = $600,000

Total Opportunity = $1,475,000

$35,000 x 25 cases = $875,000 opportunity



Cost Per Case, Vascular Procedures

Inpatient per case opportunity analysis


Gro

uped

by

AP

R D

RG

– S

ever

ity S

core

Bubble Size = Case Count for provider

Bubble Color = APRDRG - Severity Score

X Axis = Average Variable Cost per Casefor provider

Inpatient per case opportunity

Waste reduction opportunity is calculated based on bringing the cases in each severity level of each APR-DRG down to the mean of the severity level


Inpatient per case opportunity*Physician variation perspective

* This $97 MM is based on the impact of variation in MD practice across all types of relevant inpatient care units



IP per case ordering wasteOpportunity analysis


IP per case ordering waste

Primary Care

CareProcessFamilies

e.g.,Diabetes

CV

CareProcessFamilies

e.g.,Heart

Failure

W&C

CareProcessFamilies

e.g., Pregnancy

GI

CareProcessFamilies


Resp-iratory

CareProcessFamilies


Disorders

Neuro Sciences

CareProcessFamilies

e.g.,Spine

Disorders

Musculo-skeletal

CareProcessFamilies

e.g., Joint

Replace-ment

Surgery

CareProcessFamilies

e.g.,Urologic

Disorders

GeneralMed

CareProcessFamilies


Oncology

CareProcessFamilies

e.g., BreastCancer

Peds Spec

CareProcessFamilies

e.g.,Peds

CV Surg

Mental Health

CareProcessFamilies

e.g., Depressio

n


IP per case ordering wasteSources of ordering variation within a case

• Diagnostics• Laboratory tests• Diagnostic imaging studies

• Therapeutics • Therapies (e.g., respiratory, physical, et al) • Substances (e.g., antibiotics, blood products)

• Clinical supply chain (e.g., prosthetics, stents, synthetic bypass grafts, heart rhythm devices)


Home(Patient Portal)

* To Invasive Care Processes

Clinic CareNon-recurrent

Clinic CareChronic Acute Medical

IP Med-SurgAcute Medical

IP ICU

Invasive Medical

Invasive Surgical

Diagnostic Work-up

Bedside care

Triage to Treatment Venue

Substance Preparation

Invasive* Subspecialist

Chronic Disease

Subspecialist

Screening & Preventive Symptoms

Sources of per case ordering waste

Diagnostic algorithms



Triage Criteria

Diagnostic Algorithms, Triage Criteria, Referral & Intervention Indications


Knowledge Assets

Substance Selection

Substance Selection

Clinical Supply Chain Management

ProcedureTreatment and

Monitoring Algorithms

Admission Order SetsAdmission Order Sets

Supplementary Order Sets

Pre-Procedure Order Sets

Post-procedure Order Sets

Discharge

Bedside care practice guidelines, risk assessment and patient injury prevention protocols, bedside care procedures, transfer and discharge protocols

Treatment and Monitoring Algorithms

Health Maintenance and Preventive Guidelines

Standardized Follow-up

Post-acute care order setsIP (SNF, IRF)Home healthHospice

Management of Preventive, Ambulatory, Acute Medical, Invasive & PAC Modules

Prevention and Treatment Knowledge

Assets

Clinical ops procedure guidelines and patient injury prevention

Post-procedure Care


IP per case ordering waste opportunityCare Process Family Total Variable

CostTotal Variable Cost

Opportunity%

OpportunityArthritis $4,495,738 $1,262,468 28.08%Pregnancy $3,386,142 $964,935 28.50%Lower GI disorders $9,223,075 $2,887,678 31.31%Pulmonary disorders $13,301,079 $4,112,305 30.92%Ischemic heart disease $16,422,491 $3,830,609 23.33%Heart failure $10,521,631 $3,151,318 29.95%Spine disorders $3,667,804 $868,486 23.68%Abdominal transplant $5,646,849 $1,150,355 20.37%Sepsis $11,766,105 $4,302,385 36.57%Infectious disease $9,757,995 $3,359,184 34.42%Abnormal newborn - 3A $3,633,453 $1,078,333 29.68%Vascular disorders $10,090,688 $2,978,748 29.52%GU disorders $5,743,735 $1,790,536 31.17%Abnormal newborn - 3B $5,504,113 $2,170,518 39.43%Other gastrointestinal disorders $6,150,878 $2,109,424 34.29%Heart rhythm disorders $7,745,049 $1,629,037 21.03%Trauma $5,481,067 $1,784,045 32.55%Intracranial disorders $4,655,176 $1,479,753 31.79%Sports medicine disorders $2,212,528 $616,926 27.88%Upper GI disorders $4,144,179 $1,239,599 29.91%Bone marrow procedures $6,001,248 $1,662,039 27.69%Chest procedures $2,943,145 $987,669 33.56%Heart and lung transplants $2,367,759 $654,981 27.66%TIA, stroke and paralysis $3,917,114 $1,311,687 33.49%Normal newborn $934,586 $97,998 10.49%Renal disorders $3,578,289 $1,306,072 36.50%Cancer therapeutic procedures $4,966,106 $2,057,475 41.43%Hematology $4,435,866 $1,839,409 41.47%Obstructive lung disease $3,598,005 $956,058 26.57%Biliary tract disorders $3,005,292 $849,573 28.27%Other cardiovascular disorders $3,084,102 $920,290 29.84%Liver disorders $3,662,416 $1,256,790 34.32%Pareto Total $186,043,705 $56,666,685 30.46%

Ordering Waste

* The $57 MM is based on the impact of variation in ordering of tests and services from ancillary (non-patient-care) departments (e.g., lab, imaging, pharmacy, therapies, supply chain, central services) adjusted by APR-DRG severity level


Reducing per case ordering waste

• Order sets. Evidence-based order sets for the Care Processes in the Pareto list to reduce variation in the ordering of simple diagnostic tests (lab, imaging)

• Indications. Evidence-based indications and cost information to standardize utilization

• Imaging tests (e.g., MRI, CT, US, nuclear scans)

• Substances (e.g., utilization criteria for blood, antibiotics, total parenteral nutrition)

• Major clinical supplies (e.g., joint prosthetics, cardiac and vascular stents, synthetic bypass grafts, heart rhythm devices, neurostimulators)


Reducing per case ordering waste• Health Catalyst advanced applications.

• High-level Care Process map laying out the scientific flow

• Aim Packet with 2-5 Aim statements

• Cohort definition to support the Aim Packet

• Common metrics plus additional outcome, process and balance metrics to support the Aim Packet

• Starter visualizations such as dashboards, scorecards, and/or interactive drill down reports



Workflow wasteOpportunity analysis


Primary Care

CareProcessFamilies

e.g.,Diabetes

CV

CareProcessFamilies

e.g.,Heart

Failure

W&C

CareProcessFamilies

e.g., Pregnancy

GI

CareProcessFamilies


Resp-iratory

CareProcessFamilies


Disorders

Neuro Sciences

CareProcessFamilies

e.g.,Spine

Disorders

Musculo-skeletal

CareProcessFamilies

e.g., Joint

Replace-ment

Surgery

CareProcessFamilies

e.g.,Urologic

Disorders

GeneralMed

CareProcessFamilies


Oncology

CareProcessFamilies

e.g., BreastCancer

Peds Spec

CareProcessFamilies

e.g.,Peds

CV Surg

Mental Health

CareProcessFamilies

e.g., Depressio

n

Clin

ical

Sup

port

Ser

vice

s (D

eliv

ery

of C

are)






Therapy)

Per case workflow waste opportunityClinical Support Services


Source: CA Office of State-wide Health Planning and Development (OSHPD)

Annual financial reports for 2011

351 hospitals

Exclusions:KaiserState hospitalsSmall psych H’s

Clinical Support Service Clinical DepartmentExpenses by Clinical Department

% of Total Cum %

Acute Medical Med-Surg Acute Care 8,661,146,370 19.2% 19.2%Therapeutic Substance Preparation 4,662,386,338 10.3% 29.6%Therapeutic Clinical Equipment, Supplies & Services* 4,477,744,993 9.9% 39.5%Acute Medical Med-Surg Intensive Care 3,995,060,038 8.9% 48.3%Invasive Inpatient Surgery 3,788,458,767 8.4% 56.8%Diagnostic Laboratory 2,808,517,363 6.2% 63.0%Diagnostic Diagnostic Imaging 2,730,552,915 6.1% 69.0%Acute Medical Emergency Care 2,559,406,510 5.7% 74.7%Ambulatory Clinic Care 2,247,089,922 5.0% 79.7%Invasive Interventional Medical 1,495,321,329 3.3% 83.0%Invasive Labor & Delivery 1,159,880,048 2.6% 85.6%Therapeutic Respiratory Services 1,150,072,297 2.6% 88.1%Acute Medical Med-Surg Subacute Care 986,656,683 2.2% 90.3%Therapeutic Rehabilitation Services 912,246,803 2.0% 92.4%Therapeutic Dietary 616,656,823 1.4% 93.7%Ambulatory Research 413,491,699 0.9% 94.6%Therapeutic Other Ancillary Services 410,550,042 0.9% 95.6%Ambulatory Home Health Care Services 388,565,601 0.9% 96.4%Therapeutic Renal Dialysis 316,846,172 0.7% 97.1%Acute Medical Cardiology Services 314,448,422 0.7% 97.8%Acute Medical Social Services 285,775,151 0.6% 98.4%Invasive Outpatient Surgery 296,517,893 0.7% 99.1%Acute Medical Nursery 252,110,537 0.6% 99.7%Acute Medical Medical Transport 58,853,840 0.1% 99.8%Acute Medical Neurology Services 55,618,598 0.1% 99.9%Ambulatory Other Ambulatory 36,537,764 0.1% 100.0%

45,080,512,918 100.0%* Med supplies sold to pts, DME, central services

Per case workflow KPA - OSHPD


CA OSHPD Data

Per case workflow KPA - OSHPD


Per case workflow KPACare Process Family Total Variable

CostTotal Variable Cost

Opportunity%

OpportunityArthritis $34,257,013 $4,315,132 12.60%Pregnancy $34,604,134 $3,652,085 10.55%Lower GI disorders $26,006,611 $5,598,156 21.53%Pulmonary disorders $21,083,792 $4,592,859 21.78%Ischemic heart disease $16,680,163 $3,241,204 19.43%Heart failure $21,605,230 $4,914,260 22.75%Spine disorders $28,559,591 $5,332,532 18.67%Abdominal transplant $24,209,074 $1,835,063 7.58%Sepsis $16,822,816 $4,909,676 29.18%Infectious disease $17,688,735 $4,145,960 23.44%Abnormal newborn - 3A $22,057,913 $4,283,595 19.42%Vascular disorders $13,975,364 $3,505,618 25.08%GU disorders $17,328,064 $2,730,267 15.76%Abnormal newborn - 3B $14,361,738 $4,060,365 28.27%Other gastrointestinal disorders $12,900,700 $2,909,332 22.55%Heart rhythm disorders $10,963,720 $2,061,714 18.80%Trauma $12,895,138 $3,498,346 27.13%Intracranial disorders $13,429,232 $3,017,544 22.47%Sports medicine disorders $11,905,026 $2,764,691 23.22%Upper GI disorders $9,088,177 $1,808,059 19.89%Bone marrow procedures $6,160,908 $862,841 14.01%Chest procedures $7,842,200 $1,586,223 20.23%Heart and lung transplants $8,075,094 $1,083,284 13.42%TIA, stroke and paralysis $6,193,324 $1,373,756 22.18%Normal newborn $8,898,584 $1,125,381 12.65%Renal disorders $6,264,978 $1,685,801 26.91%Cancer therapeutic procedures $4,194,787 $1,187,025 28.30%Hematology $4,592,082 $1,021,023 22.23%Obstructive lung disease $5,228,844 $1,220,267 23.34%Biliary tract disorders $5,775,453 $947,907 16.41%Other cardiovascular disorders $5,368,812 $1,126,570 20.98%Liver disorders $4,517,543 $1,097,365 24.29%Pareto Total $453,534,839 $87,493,901 19.29%

Workflow Waste

* The $87 MM is based on variation in efficiency of care delivery for inpatient care units (e.g., ICU, general med-surg acute care, sub-acute care, observation) adjusted by APR-DRG severity level


Reducing per case workflow waste• Value Stream Maps (VSMs). VSMs for the clinical

departments in the Pareto list

• Improved capture of time stamps. • Today’s Lean/TPS improvement systems are highly

manual – automation is essential to ability to scale• Timely and complete capture of time stamps is key to

automation of workflow improvement systems• Success in wringing out workflow waste will depend on

improved focus on completeness and timeliness of time stamp capture in the EMR


Reducing per case workflow waste• Health Catalyst advanced applications.

• Value Stream Map laying out the workflow to be improved (Health Catalyst has about 70 starter set VSMs)


• Cohort definition to support the Aim Packet





Defect (patient injury) waste Opportunity analysis


HAC cohorts/registries

• Ventilator-associated pneumonia (VAP)

• Adverse drug events (ADEs)


California Data

Vascu

lar C

ath-A

ssoc

Infec

tion

Falls a

nd Trau

ma

Iatrog

enic

Pneum

othora

x *

Cath-A

ssoc

Urin

ary Trac

t Infec

tion

Pressu

re Ulce

rs Stag

es III

and I

V

Surgica

l Site

Infec

tion

VTE

Manife

stion

s of P

oor G

lycem

ic Con

trol

Foreign

Obje

ct Reta

ined A

fter S

urgery

Air Embo

lism

Blood I

ncom

patab

ility

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2,358

1,278 758 739

424 251 212 122 111 13 6

Hospital Acquired Conditions 2011 California Hospitals

All PayersTotal count 6,272

* Added in 2011

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

5,921

4,555 3,918

2,735

1,785

555 320 284 34 11

Hospital Acquired Conditions2010 Medicare US Hospitals

Total count 20,118

Medicare DataC

ount

Cou

nt


Condition Estimated cost% of Total Cum % Cases Cost/Case

Vascular Cath-Assoc Infection 405,299,703$ 51.9% 51.9% 2318 174,849$ Pressure Ulcers Stages III and IV 96,917,626$ 12.4% 64.3% 402 241,089$ Iatrogenic Pneumothorax 89,402,081$ 11.4% 75.8% 747 119,682$ Falls and Trauma 67,772,069$ 8.7% 84.4% 1134 59,764$ Cath-Assoc Urinary Tract Infection 59,991,394$ 7.7% 92.1% 720 83,321$ Surgical Site Infection 37,792,448$ 4.8% 97.0% 233 162,199$ Venous thromboembolism (VTE) 8,544,237$ 1.1% 98.1% 204 41,884$ Manifestions of Poor Glycemic Control 6,561,973$ 0.8% 98.9% 119 55,143$ Foreign Object Retained After Surgery 6,347,387$ 0.8% 99.7% 110 57,704$ Air Embolism 1,395,845$ 0.2% 99.9% 13 107,373$ Blood Incompatability 849,397$ 0.1% 100.0% 6 141,566$

780,874,160$ 6,006 130,016$

Cost estimated from gross charges based on cost to charge ratio = 0.254); Savings calculated from cost of DRG with HAC subtracted from average cost of DRG (for MS-DRGs and HAC with at least 5 cases). Estimated cost per case for all cases in California = $12,700 (3.7 million cases). Michael Dietzel analysis.

Estimated cost of defects2011 OSHPD data


Estimated potential savingsPatient injury (defect) waste

Analytic methodology

For each MS-DRG and Hospital Acquired Condition (HAC) with at least five cases:

• Define the average total cost for each case which includes a Hospital Acquired Condition (defect)

• Define the average cost of the base MS-DRG case (without complication or comorbidity)

• Estimated potential savings (if HAC patient injury were eliminated) = cost of HAC case minus cost of base case


-

100,000,000

200,000,000

300,000,000

400,000,000

Hospital Acquired Conditions Estimated Total Cost of Injury Cases2011 California Hospitals All Payers

Total count of patients6,006 without duplicates

*New HAC added in 2011

-

100,000,000

200,000,000

300,000,000

400,000,000

Hospital Acquired Conditions Estimated Savings of Injury Cases

2011 California Hospitals All Payers Total count of patients6,006 without duplicates

Patient injury waste opportunity


Focus on workflow/defect waste

CMS’s establishment of penalties weighted by measurement domain creates an incentive to choose CLABSI and CAUTI improvement initiatives (65% of total)


Reducing per case defect waste• Define for each type of defect a Patient Injury

Prevention Process (PIPP). • Screening cohort of patients who may be at risk

• Screening criteria/tool (e.g., Braden Scale) to define patients who are at risk

• Clinical operations protocol to be implemented with at-risk patients to prevent injury

• Tracking system to detect injuries and near misses

• Treat patient injury as a “process failure” to be subjected to root-cause analysis rather than an “incident” to be reported


Reducing per case defect waste

• Health Catalyst advanced applications. • Patient Injury Prevention Process map (combination of

workflow VSM and scientific flow; e.g., Health Catalyst maps for CLABSI, CAUTI, pressure ulcers)


• Cohort definitions to support the Aim Packet





Why focus on workflow and defect waste?

© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 64

IP per case waste reduction opportunityFacility perspective Per case ordering waste

Per case workflow waste

Per case defect waste

$144 MM~ 23%

Total IP per case waste

$57 MM*~ 9 %

(~ 40% of total of 23%)

$87 MM*~ 14 %

(~ 60% of total of 23%)

In Progress< 1* %

* Preliminary FindingsWork in Progress


Focus on workflow and defect waste

• Size of the opportunity (14%) and aura of safety

• Payment structure schizophrenia (see next slide)• Reduction in workflow waste benefits the system under all

forms of payment

• Reduction in defect waste benefits the system for all Medicare patients

• CMS penalties – helps system reduce or eliminate penalties under readmission reduction and HAC

• Clinical teams are clinical operations-centric rather than physician-centric (organizational readiness)


= Negative Impact = Positive or Negative = Positive Impact

Care Process Family Knowledge Asset

Discounted FFS Per Diem

Per Case Bundled Per CaseCondition Capitation

Full Capitation

CMS Commercial CMS Commercial

Workflow

Diagnostic Variation

Standing Orders

Medication Selection

Triage

Patient Safety

Ambulatory Treatment and Monitoring



Payment structure considerations


CMS penalty considerations


Thank you

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