session 70x an evidence-based approach for sustainable ... · pdf filesustainable...

Prepared for the Foundation of the American College of Healthcare Executives

Session 70X An Evidence-Based Approach for

Sustainable Physician-Hospital Engagement, Alignment, and

Integration

Presented by: Richard J. Priore, ScD, FACHE John P. Harding, FACHE Robert E. Kelly Jr., MD

1

An Evidence-Based Approach for Sustainable Physician-Hospital Engagement, Alignment, andIntegration (70X)

Tuesday, March 28, 2017

4:15 – 5:45 pm

Disclosure of RelevantFinancial RelationshipsThe following faculty of this continuing education activity have no relevant financial relationships with commercial interests to disclose

RICHARD J. PRIORE | ScD, MHA, FACHE

JOHN P. HARDING | MBA, FACHE

The following faculty of this continuing education activity has financial relationships with commercial interests to disclose

ROBERT E. KELLY, JR. | MD, FACS, FAAPZimmer Biomet – Product Development Consultant

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Faculty

RICHARD J. PRIOREScD, MHA, FACHE

President,Excelsior HealthCare Group

Associate Professor andSenior Research FellowUniversity of Minnesota

ROBERT E. KELLY, JR.MD, FACS, FAAP

Surgeon-in-Chief and Vice President for Surgical Affairs

Professor of Clinical Surgery and Pediatrics and

Chief, Division of Pediatric Surgery

JOHN P. HARDINGMBA, FACHE

Chief Operating Officer

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Agenda

The changing world and need for tighter physician-hospital alignment

1

What is physician-hospital alignment?

2

Evidence-based approach (case study)

3

Q&A

4

4

3

Learning Objectives

Discuss the need for and key approaches to tighter physician-hospital alignment

Apply an evidence-based best practice model to close the gap in creating sustainable physician-hospital relations

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Physician-Hospital ImperativeSymbiotic Relationship

…we must all hang together or we shallmost assuredly all hang separately.

Benjamin Franklin

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4

Top Issues Confronting HospitalsAnnual Survey (2014-2016)

Link between finance, safety, quality, patient satisfaction and physician-hospital relations

Issue 2016 2015 2014

Financial challenges 2.7 3.2 2.5

Governmental mandates 4.2 4.5 4.6

Patient safety and quality 4.6 4.2 4.7

Personal shortages 4.8 5.1 7.4

Patient satisfaction 5.5 5.3 5.9

Access to care 5.8 6.2 …

Physician-hospital relations 5.9 5.7 5.9

Population health management 6.6 6.3 7.8

Technology 7.1 7.3 7.3

Reorganization (e.g., mergers, acquisitions, restructuring, partnerships)

7.8 7.4 …

Note: The average rank given to each issue was used to place the issue in order of how pressing they are to hospital CEOs, with the lowestnumbers indicating the highest concerns.

Source: American College of Healthcare Executives. (2017, Jan.31). Survey: Healthcare Finance, Safety and Quality Cited by CEOs as Top Issues Confronting Hospitals in 2016.

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Rising Cost of U.S. Health CareAfter Several Years of Slowed Growth

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500

1000

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3500

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2015

$3.2 trillion

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Rising Cost of U.S. Health CarePrimary Underlying Causes

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2

3

4

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Increasing prevalence of chronic diseases

Costly medical technology

Increasing per capita incomes

Poorly aligned physician and hospital reimbursement structures and financial incentives

Unwarranted practice variation

Sources: Wennberg, Barnes, & Zubkoff (1982); Mark, Evans, Schur, & Guterman (1998); Goldsmith (2006); Thompson & Bishop (2007);Trybou, Gemmel, & Annemans (2011)

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1

2

3

4

5




Poorly aligned physician and hospital reimbursement structures and financial incentives


Sources: Wennberg, Barnes, & Zubkoff (1982); Mark, Evans, Schur, & Guterman (1998); Goldsmith (2006); Thompson & Bishop (2007);Trybou, Gemmel, & Annemans (2011)

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6

Practice variation is oneof the greatest problems we face in controlling costs, but we believe thatit is something we can do something about.

Dwayne Davis, MDMedical Director

xG Health SolutionsGeisinger Health Care

Unwarranted VariationCan It Be Reduced?

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It’s the Physician Culture…

“Solo practice mentality”

“Physician independence and autonomy”

“Not adhering to evidence-based guidelines”

“No fiscal accountability”

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…With a Costly CatchPhysician Influence on Total Cost of Care

U.S. Population: 320 million U.S. GDP: $18 trillion

Active Physicians: 900,000 0.3% Physician Influence: $2.5 trillion 14%

Healthcare GDP

Physicians Influence

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Physician Impact on Total CostThe Pen is the Most Expensive Piece of Medical Equipment

Clinical resource management

• Length of stay

• Diagnostic testing

• Specialty consults

Coding and documentation• Charting

• Op reports

Physician preference• Implants

• Supplies

• Capital equipment

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8

Unwarranted VariationPhysician Attribution and Internal Best Practice

Source: Sutter, R., Waterman, B & Udwin, M. (2013).

0

0

3.1

3.8

5.4

6.2

8.6

15.7

17

20

25.3

38.6

41.2

62

64.7

77.8

93.7

Cardiac Arrhythmia

Asthma

Rehablitation

Newborn

Pneumonia

COPD

Cellulitis

Gynecology Procedures

Seizures

Metabolic Disorders

Respiratory Failure

RBC Disorders

Sepsis

Infectious Disease

Appendectomy

Circulatory Disorders

Back & Neck Procedures

• Variation attributed to physician practice patterns

Variability in risk-adjusted LOS attributed to physicians

• Driving improvement through peer-driven internal ‘best practice’

Example: Diabetes risk-adjusted LOS variance

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1

2

3

4

5




Poorly aligned physician and hospital reimbursement structuresand financial incentives


Sources: Wennberg, Barnes, & Zubkoff (1982); Mark, Evans, Schur, & Guterman (1998); Goldsmith (2006); Thompson & Bishop (2007); Trybou, Gemmel, & Annemans (2011)

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9

Moving From Volume to ValueValue-Based Care: The ‘Second Curve’

• CMS moving quickly from fee-for-service volume-based reimbursement (fee for service) to value-based, linking quality and payment

• By 2018, CMS goals

‒ 90% of reimbursement tiedto quality

‒ 50% tied to alternative payment models(ACO, bundled payments)

Source: CMS (Jan. 26.2015).

Target percentage of Medicare FFS payments linked to quality and alternative payment

models in 2016 and 2018

85%

30%

90%

50%

All Medicare FFS

2016 2018

All Medicare FFS (Categories 1-4)

FFS linked to quality (Categories 2-4)

Alternative payment models (Categories 3-4)

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Bundled Payment InitiativesUncertainty with CMS…Gaining Ground With Commercial

• Total joint mandated April 2016 in 60 markets‒ Pre-op, post-acute, complications < 30

days pre-surgery, < 90 days post-surgery

• Reimbursement cut (up to 2%)

• Forced collaboration to reduce total cost of care

• Significant investment and effort

• 2/3 total joint hospitals losing money

• Uncertain future of CMS initiative

• Commercial carriers moving ahead

Source: HealthLeaders Media. (2016, Apr. 24).

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10

Moving Ahead with BundlesThe Way Forward

UnitedHealth Group to expand hip, knee, and spine bundled payments

Anthem Blue Cross pilots bundled payments on breast cancer treatment

Cigna’s latest creation caters to value-based providers, and plans

Aetna can’t escape fee-for-service medicine ‘fast’ enough; increasing appetite for value-based care contracts

Humana expands knee, hip, replacement bundled payment models

Value-based care here to stay, may invest in new growth

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Does Employment Equal Alignment?Potential Downside of Physician Employment

For Physicians

• Lack of job security

• Compensation changes

• Burdensome call

• Lack of business control

• Loss of clinical autonomy

• Tyranny of non-compete clauses

For Hospitals

• Economic losses‒ Productivity

‒ Referral leakage

‒ Increased capital needs

• Political‒ Disenfranchised independents

‒ ‘Have’ and ‘have nots’

‒ Different incentives

Source: Terry, K J. (2011).

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Engage, Align, Integrate or Disintegrate?Taxonomy of the Physician-Hospital Relationship

Physician-Hospital Relationship

Degree of emotional involvement in and commitment to the organization’s long-

term success

Conglomeration of previously disparate entities of a multi-

function production process (vertical or

horizontal) along the value chain

ENGAGEMENT INTEGRATIONALIGNMENT

Degree of unity of purpose and existence of mutually beneficial goals

between physicians and the hospital

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Alignment Survey and IndexIf You Can’t Measure It, You Can’t Improve It – Drucker

0102030405060708090

100

Rulemaking CommunicatingPerformance

Supported Change Governance andLeadership

Structural Model Risk and Reward Sociological-Cultural

Top Performer Median Performer

Physician-Hospital Alignment Index Survey

Physicians are involved in establishing evidence‐based clinical practice guidelines.

Physicians are provided with actionable data to improve clinical outcomes benchmarked against internal ‘best practices’.

The organization invests in ongoing training and education for physicians to address identified opportunities for improvement.

Physician and administrative leaders share decision‐making authority across all levels of the organization.

Collaborative structures equally engage members of the ‘mixed medical staff’ (e.g., employed and independent physicians) to support achieving organizational goals.

Total physician compensation is tied to achieving organizational goals.

There is a high degree of trust and collaboration between physicians and administrators.

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12

Alignment Survey and IndexBest Practices of Top-performing Organizations

EMREMR

Data and information

Data and information

EducationEducation

Board memberBoard

member

PHOPHO

Pay-for-performance

Pay-for-performance

TrustTrust

Standard order setStandard order set

Physician dashboardPhysician dashboard

TrainingTraining

Chief medical officer

Chief medical officer

MSOMSO

At-risk contractAt-risk

contract

Mutual respectMutual respect

Preference cards

Preference cards

One-on-one review

One-on-one review

CoachingCoaching

Medical directorMedical director

Co-management

Co-management

CollaborationCollaboration

FormularyFormulary

MentoringMentoring

Rulemaking

Communicating Performance

Supported Change

Governance and Leadership

Risk and Reward

Sociological-Cultural

StructuralModel

Advocate HealthData transparency

USF Health Business case for quality

Mayo Clinic Leadership dyad

Allina HealthAlignment partnership criteria

UVM Health NetworkValue-based incentive program

Examples Best Practices

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Structure Drives CultureTransforming the “Physician Culture”

• Find common ground for unity of purpose and mutually beneficial goals

• Share power and control

• Create ownership and accountability

• Enable transparency of accurate and actionable data

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Case Study

Children’s Hospital of The King’s Daughters

About CHKD

• Established in 1961, not-for-profit

• Virginia’s only free-standing pediatric hospital

• 206 staffed beds, 50% intensive care

• 17 primary care pediatric practices

• 30+ pediatric medical and surgical practices

• 7 ambulatory care centers

• 2 ambulatory surgery centers

• Teaching hospital – Eastern Virginia Medical School’s Department of Pediatrics

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Need for Improved Collaboration

An 8 is faster than a 4 because there are more people pulling at the oars

Effort and time are required to develop strength and to coordinate strokes

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Co-management Goals for CHKD

Improve quality, patient safety, patient experience, access, efficiency, and new programdevelopment by engaging and supporting providers as ‘co-managers’

Focus on sustainable resultsthrough continuous performance improvement

Improve transparency and accuracy of data for timely and effective decision-making

Offer fair market value compensationfor achieving pre-determined goals

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15

Governance Structure

Steering Committee provides for oversight by key stakeholder representatives

Participating physicians and staff are assigned to an Operations team focused on 2-3 performance indicators

Quality & Patient Safety

Efficiency & Effectiveness

Experience& Access

StrategicDevelopment

Steering Committee

OPERATIONS TEAM

Meets monthly to provide oversight and support, approve indicators, and monitor overall performance

Comprised of representatives from ‘mixed’ medical staff

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Performance Measures

• Established by Steering Committee and reviewed or confirmed by each Operations Team

• Baseline established through data collection and validation

• Re-calibrated based on validation

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Co-management StructureOperations (Work) Teams

• 2-3 physicians and 3-4 hospital staff

• Rotating membership

– Initially, each physician asked to participate on at least 1 team per year

• In second year, physician participation voluntary

• Meet as required to achieve performance measure goals

• Coaching support provided, as needed

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DAY 100

Structure of Four-Month Cycles

45-DayStructured

Review

Focus on making meaningful changes starting at kick-off

Monthly progressupdates through team leaders reporting at Steering Committee meeting

45-Day Formal Review at mid-point

CHANGES

Kick-off Summation and Kick-off

DAY 1

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17

Rapid Change MethodologyFour-Month Cycles

Developan idea

Test theidea (RCT)

Implement,sustain, andreplicate

Focus on implementation versus analysis

Leverage current information and knowledge

Execute multiple incremental changes vs. ‘silver bullet’

Rapid Cycle Test (RCT) changes

Overcome impediments to change and increase speed to implementation

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Pay-for PerformancePhysician Incentive Compensation Model1

(1) Compensation model subject to legal and regulatory limitations. Payment of any incentive compensation dependent upon meeting specific quality thresholds.

20-30% physician co-managers paid fixed

fair market hourly rate to perform

administrative duties

Steering Committee

Participation

Operations Team Meetings

Ad-hoc Performance Improvement

WorkPerformance Dashboard

Management

Day-to-Day OperationsOversight

70-80% distributed as performance bonus

based on achieving of pre-set indicators with

threshold targets, including stretch goals

Quality and Patient Safety

Efficiency and Effectiveness

Patient Experience and

AccessPhysician and

Staff Engagement

New Program Development

FIXED MANAGEMENT FEE

VARIABLE COMPENSATION

Separate hospital staff compensation incentive model based on composite score

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18

Performance Measures and Results Year 1 – Cycle 1

Team Performance Measure Results

Team 1Specialty: Adherence to SSI prevention bundle, spine 90%

General: Release time compliance 81%

Team 2Specialty: Adherence to SSI prevention bundle, VP shunts 81%

General: Patient satisfaction (Waiting time before surgery began?) 84.5

Team 3Specialty: Adherence to SSI prevention bundle, cardiac 88%

General: First case on time start percentage at Main OR 76%

Team 4

Specialty: Anesthesiologist education on IV infiltrates in perioperative patients(100% = All 25 providers trained)

100%

Pathology specimen handling (reduce mislabeling errors) 12

Team 5Wound class discrepancy (Appendectomy) 21.8%

Patient satisfaction (Degree to which your pain was controlled?) 94.7

Team 6Cost per procedure: Supply/labor cost of T&A procedures $316.39

Turnover Time (ENT, Ophthalmology & Plastics) 19.8

Team 7Cost per procedure: Supply/labor cost of Orchiopexy procedures $292.95

Block Utilization – Oyster Point ASC 59%

OVERALL RESULTSStaff Cumulative % of Target Score (All Measures) 93%

Physician Cumulative % of Target Score (General Measures) 69%

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Surgical Site Infection (SSI)Performance Improvement Example

0%

20%

40%

60%

80%

100%

0

0.5

1

1.5

2

2.5

3

Aug

-15

Sep

-15

Oct

-15

No

v-15

De

c-15

Jan-

16

Feb

-16

Ma

r-16

Apr

-16

Ma

y-16

Jun-

16

Jul-

16

SS

I Pro

cess

Re

liab

ility

(Ro

llin

g 1

2 M

on

th A

vera

ge

)

SS

I Rol

ling

12 M

onth

s R

ate

SSI

SSI Rolling 12 Month SSI Process Reliability

Cycle 1

Network Avg.1.705

Cycle 2 Cycle 3

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19

Performance Measures and ResultsYear 1 – Cycle 2

Team Domain Performance Measure Results

Team 1Outcomesand NationalMeasures

Specialty: GI quality measure development 120%

General: Pathology specimen handling (reduce mislabeled) 3

Team 2Efficiency and Effectiveness

Specialty: Supply cost of cleft procedure 28.1%

General: Employee satisfaction 120%

Team 3Patient Access and Experience

General: Patient transport time from ED and floor to OR 51

General: Accessibility for add-on cases 65%

Team 4Program Development

Specialty: 1st two case on-time start: OMFS 87%

General: Ambulatory Surgery Center Development (Peninsula) 100%



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Performance Measures and Results Year 1 – Cycle 3

Team Domain Performance Measure Results

Team 1Outcomesand NationalMeasures

Specialty (Anesthesia): Reduce IV infiltrates

General: Unplanned Returns to the OR

Team 2Efficiency and Effectiveness

Specialty (Dental): Reduce rate of cancelled cases

General: Inventory and streamline surgical trays

Team 3Outcomes and National Measures

Specialty: Ophthalmology Patient Experience & Outcomesa. 120%b. 0%

General: Main OR Turnover Time Improvement

Team 4Patient Access and Experience

General: Implement Employee Engagement Plans

General: Patient Satisfaction (Wait/delays, Privacy)



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Calculating ROI

• Hard vs. soft savings

– Value analysis process

– Imputed cost of waste

– Patient safety misses

– Enhanced operating efficiency

• Top-line growth

– Increased throughput and capacity

– Reduced referring provider “leakage”

– Patient experience

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Annual Improvement PlanYear 2

CYCLE 1

Annual Improvement Plan

CYCLE 2 CYCLE 3

Structure Process Outcome0-4 months 4-8 months 8-12 months

1. Identify stakeholders’ roles and responsibilities

2. Gather stakeholder input to improvement opportunities

3. Collect and validate baseline data4. Define opportunity project scope5. Establish realistic goals6. Develop and implement project

Action Plan7. Measure, monitor, and manage

performance

1. Develop process maps2. Perform root cause analysis3. Verify proper metrics to gauge

success of improvements4. Develop and implement action

plans and conduct Rapid Cycle Test (RCT)

1. Monitor improvements (RCT)2. Hardwire improvements and

map to other areas

Time-Phased Four-month Cycle

Pre Kick-off Planning-30 to 0 Days

Develop Plans1-30 Days

Implement Plans31-60 Days

Monitor/Modify61-90 Days

Kick-Off (KO) 45-Day Review Summation/KO

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Successes

• Teams have made measurable improvements in patient experience, workforce engagement, quality/patient safety, and efficiency

• Physicians have more ownershipof operational issues and are heavily engaged in leading projects

• Most results sustained beyond the Four-month cycle in which they were addressed; if not sustained, the Steering Committee addresses

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Challenges

• Single four-month cycles have been too short to address some complex problems

• Some teams have year-long initiatives with results still measured each cycle

• Continue to work to synchronize the Surgery Co-management projects with broader organizational initiatives(including external collaborations)

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Summary

• Culture eats strategy…

– Unwarranted variation

– Poorly aligned reimbursement models and incentives

• Right structure drives culture

– Co-management promising alignment model

• Providing ‘skin in the game’

• Bias toward action and results

• Measurable and sustainable performance improvement

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Contact Information


[email protected]


[email protected]


[email protected]

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Dr. Richard Priore is a leading national expert on physician-hospital alignment and clinical integration and was a principal architect for the successful CMS Acute Care Episode (ACE) Demonstration project that led to the Shared Savings and Bundled Payment models. His leadership experience spans 20+ years with executive roles in integrated and academic health systems, physician-owned specialty hospitals, and large multispecialty group practices.

Rich is founder and President of Excelsior HealthCare Group focused on assessment, execution, and speed of measurable results in physician engagement, alignment, and integration. He is an Associate Professor for the University of Minnesota’s top-ranked graduate program in health administration and frequent national speaker, including the ACHE Cluster Seminar Physician Leadership Essentials. He earned a Doctorate in Health Systems Management from Tulane University and a Masters in Healthcare Administration from Baylor University.

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Dr. Robert E. Kelly, Jr. is Vice President for Surgical Affairs at Children’s Hospital of The King’s Daughters in Norfolk, Virginia, and Professor of Clinical Surgery at Eastern Virginia Medical School. Since 1994, he has introduced new surgical techniques with Dr. Donald Nuss, developer of the minimally invasive correction of chest wall deformity. He pioneered research collaborations, including development of a virtual reality simulator for teaching the Nuss procedure, leading to recognition as Adjunct Professor of Engineering at Old Dominion University. Dr. Kelly has been Program Director for CHKD’s annual pectus workshop. In 2016, as president of the Chest Wall International Group, he led that meeting in Norfolk, Virginia.

He received his medical degree from Johns Hopkins University, and trained in General Surgery Residency at Vanderbilt and Pediatric Surgery at SUNY/Buffalo. Dr. Kelly also completed a Surgical Research Fellowship at UCLA School of Medicine.

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Mr. John Harding is the Chief Operating Officer for the Children’s Health System in Norfolk, Virginia, which includes the Children’s Hospital of The King’s Daughters (CHKD), the Children’s Medical Group, the Children’s Surgical Specialty Group, and other related entities. As Chief Operating Officer, Mr. Harding oversees patient care services, ancillary services, physician practice management, human resources, and facilities and support services. Prior to joining CHKD, Mr. Harding was the Vice President of Operations at Johns Hopkins All Children's Hospital in St. Petersburg, Florida.

John received his Bachelor's degree in Psychology from Georgetown University and his Master's in Business Administration from Loyola University Maryland. He is a Fellow of the American College of Healthcare Executives. He was recently elected to serve as the Regent for Virginia-Central, and has served in various other ACHE volunteer leadership roles in the past.

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Bibliography/References

• American College of Healthcare Executives. (2017, Jan.31). Survey: Healthcare Finance, Safety and Quality Cited by CEOs as Top Issues Confronting Hospitals in 2016.

• CMS (Jan. 26.2015). Better Care. Smarter Spending. Healthier People: Paying Providers for Value, Not Volume. CMS Press Release.

• Goldsmith, J. (2006). Hospitals and physicians: Not a pretty picture. Health Affairs, 26(1), w72-w75 (published online December 5, 2006, 10.1377/hlthaff.26.1.w72).

• HealthLeaders Media. (2016, Apr. 24). Majority of hospitals eyes losses in CJR.

• Mark, T. L., Evans, W. N., Schur, C. L., & Guterman, S. (1998). Hospital-physician arrangements and hospital financial performance. Medical Care, 36(1), 67-78.

• Sutter, R., Waterman, B & Udwin, M. (2013). An analytical approach to improving physician performance. Physician Executive Journal, May/June: 26-36.

• Terry, K J. (2011). Six biggest gripes of employed doctors. Medscape Business of Medicine.

• Thompson, R. C. & Bishop, J. R. (2007). Controlling costs: Opportunities for physician-hospital collaboration and ventures. SPINE, 115, S27-S32.

• Trybou, J., Gemmell, P., & Annemans, L. (2011). The ties that bind: An integrative framework of physician-hospital alignment. BMC Health Services Research, 11(36), 1-5.

• Wennberg, J. E., Benjamin A. Barnes, B. A., & Zubkoff, M. (1982). Professional uncertainty and the problem of supplier-induced demand. Social Science & Medicine, 16(7), 811–824.

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