the concept of value in mental health services

1

The Concept of Valuein Mental Health Services

Discussion with the NJ Mental Health Planning CouncilTom Pyle, January 10, 2013www.psychodyssey.net

2

The Stakeholders

In 10 months…

3

Police encounters 5Arrests 1Calls to Crisis Center 3Hospitalizations 10Outpatient programs 3Court appearances 1Prescribing psychiatrists/APNs 14Diagnoses 3Meds changes over 10Outside Therapists 2Group sessions InnumerableInstitutional case managers 12Ambulance rides 6

4

Claim TypeStart

End

Provider

Code

Type

ChargedM

'care AppvdPaid

DeductibleM

ay be billed

Inpatient9/20/2011

9/23/2011Capital Health

Emergency

$24,203$24,203

$1,298

$0

Inpatient9/20/2011

9/23/2011Capital Health

Hospitalization

$1,132

$0

$0

$1,132

$1,132

Part B

9/20/2011

9/20/2011 Eleanor Vo

90801Psych Diag

$227

$130

$104

$26

Part B

9/20/2011

9/20/2011 PRN 1st Aid

A0429Am

bulance

$650

$372

$297

$74

Part B

9/20/2011

9/20/2011 PRN 1st Aid

A0425Am

bulance--Mileage

$170

$78

$62

$16

Part B

9/20/2011

9/20/2011 Edward Fahy PA

99283ER visit

$295

$55

$44

$11

Part B

9/21/2011

9/22/2011 Arnaldo Negro, MD

99223Initial Hosp Care

$291

$205

$164

$41

Part B

9/21/2011

9/22/2011 Arnaldo Negro, MD

99233Subs. Hosp Care

$187

$105

$84

$21

Part B

9/28/2011

9/28/2011 Kurt Stuebben, MD

90807Ind. Psychotherapy

$150

$79

$63

$16

Outpatient9/30/2011

10/1/2011PRN Healthcare

VariousEm

ergency

$5,512

$5,512

$5,422

$90

Part B

9/30/2011

9/30/2011 PRN 1st Aid

A0429Am

bulance--Emerg

$650

$372

$297

$74

Part B

9/30/2011

9/30/2011 PRN 1st Aid

A0425Am

bulance--Mileage

$30

$14

$11

$3

Part B

9/30/2011

9/30/2011 Cathleen Vossler, MD

99285ER visit

$410

$122

$98

$24

Part B

9/30/2011

9/30/2011 Cathleen Vossler, MD

93042ECG reading

$50

$8

$6

$2

Part B

9/30/2011

9/30/2011 Lisa Motavalli

93010ECG reading

$39

$9

$8

$2

Part B

10/1/2011

10/1/2011 Samer Al-Saadi


$85

$70

$56

$14

Part B

10/1/2011

10/1/2011 Monm

outh Hosp Svc Corp.A0428Am

bulance--Basic

$514

$232

$186

$46

Part B

10/1/2011

10/1/2011 Monm

outh Hosp Svc Corp.A0425Am

bulance--Mileage

$522

$224

$179

$45

Inpatient10/1/2011

10/20/2011 UHS of Hampton

124

Psych 2 Bed

$20,900$20,900

$13,587

$0

Part B

10/2/2011

10/2/2011 Amir M

. Rizvi, MD


$55

$39

$31

$8

Part B

10/4/2011

10/4/2011 A. Richane


$55

$39

$31

$8

Part B

10/5/2011

10/5/2011 Michael P. Houdart, M

D99232

Subs. Hosp Care

$85

$70

$56

$14

Part B

10/6/2011


D99232

Subs. Hosp Care

$85

$70

$56

$14

Part B

10/8/2011

10/8/2011 Jeffrey Aronowitz, MD


$55

$39

$31

$8

Part B

10/10/2011


D99232

Subs. Hosp Care

$85

$70

$56

$14

Part B

10/11/2011

10/11/2011 A. Richane


$85

$70

$56

$14

Part B

10/12/2011

10/12/2011 Robert T. Harvey, MD

70551M

ag. Res. Imag.

$435

$78

$62

$16

Part B

10/12/2011

10/12/2011 A. Richane


$55

$39

$31

$8

Part B

10/13/2011

10/13/2011 A. Richane


$55

$39

$31

$8

Part B

10/14/2011

10/14/2011 A. Richane


$55

$39

$31

$8

Part B

10/15/2011

10/15/2011 Amir M

. Rizvi, MD


$55

$39

$31

$8

Part B

10/16/2011

10/16/2011 Nicole R. Branca, MD


$55

$39

$31

$8

Part B

10/17/2011

10/17/2011 A. Richane


$55

$39

$31

$8

Part B

10/18/2011

10/18/2011 A. Richane


$55

$39

$31

$8

Part B

10/19/2011

10/19/2011 A. Richane


$55

$39

$31

$8

Part B

10/20/2011

10/20/2011 A. Richane

99239Hosp Discharge

$150

$102

$82

$20

Part B

10/28/2011

10/28/2011 Thrift Drug

90656Flu Shot

$12

$12

$12

$0

Outpatient10/31/2011

10/31/2011 PRN Healthcare

90801Psych Diag

$661

$661

$637

$24

Inpatient11/4/2011


$118,211$118,211

$21,758

$0

Part B

11/5/2011

11/5/2011 Victor G. Grosu, MD


$73

$41

$33

$8

Part B

11/7/2011

11/7/2011 Seema Kazi, M

D


$99

$73

$59

$15

Part B

11/8/2011


D


$99

$73

$59

$15

Part B

11/9/2011


D

99239Hosp Discharge

$175

$108

$86

$22

Inpatient11/9/2011


Various

$103,338$18,269

$18,269

$0

Part B

11/10/2011

11/10/2011 Jayanta K. Pal, MD


$250

$205

$164

$41

Part B

11/11/2011



$99

$73

$59

$15

Part B

11/12/2011

11/12/2011 Indira Shah


$73

$41

$33

$8

Part B

11/13/2011

11/13/2011 Richard A. Pessagno, CNS99231Subs. Hosp Care

$73

$35

$28

$7

Part B

11/14/2011



$99

$73

$59

$15

Part B

11/15/2011



$99

$73

$59

$15

Part B

11/16/2011



$99

$73

$59

$15

Part B

11/17/2011



$99

$73

$59

$15

Part B

11/18/2011



$99

$73

$59

$15

Part B

11/19/2011

11/19/2011 Philippe J. Khouri, MD


$73

$35

$28

$7

Part B

11/20/2011

11/20/2011 Yuhua Ma, M

D


$73

$35

$28

$7

Part B

11/21/2011



$99

$73

$59

$15

Part B

11/22/2011



$99

$73

$59

$15

Part B

11/23/2011

11/23/2011 Able Med Transport

A0428Am

bulance--Basic

$575

$232

$186

$46

Part B

11/23/2011

11/23/2011 Able Med Transport

A0425Am

bulance--Mileage

$166

$126

$101

$25

Part B

11/23/2011


99238Hosp Discharge

$150

$73

$59

$15

Outpatient12/8/2011


90801Psych Diag

$661

$661

$637

$24

Outpatient12/9/2011


Various

$27,028$27,028

$2,869

$717

Part B

12/12/2011

12/12/2011 Lorna Stanley


$123

$49

$39

$10

Part B

12/14/2011

12/14/2011 Bio Reference Lab

82055Alcohol

$55

$15

$15

$0

Part B

12/14/2011


G0431Drug Screen

$245

$103

$103

$0

Part B

12/16/2011



$123

$49

$39

$10

Part B

2/9/2012


G0431Drug Screen

$245

$103

$103

$0

Part B

2/9/2012


G0431Drug Screen

$245

$103

$103

$0

Part B

2/9/2012


G0431Drug Screen

$55

$15

$15

$0

Part B

2/16/2012



$123

$49

$39

$10

Part B

2/20/2012


G0431Drug Screen

$245

$103

$103

$0

Part B

2/20/2012


G0431Drug Screen

$245

$103

$103

$0

Part B

2/20/2012


G0431Alcohol

$55

$15

$15

$0

Part B

2/29/2012

2/29/2012 William

Barton, MD

99212Office Visit

$98

$46

$37

$9

Part B

3/1/2012



$123

$50

$40

$10

Outpatient3/1/2012


Various

$13,944$13,944

$1,348

$12,596

Part B

3/5/2012


G0431Drug Screen

$325

$103

$103

$0

Part B

3/5/2012


82055Alcohol

$55

$15

$15

$0

Part B

3/5/2012


G0431Drug Screen

$325

$103

$103

$0

Part B

3/19/2012



$123

$66

$40

$26

Outpatient3/19/2012


Various

$7,023

$7,023

$290

$76

Part B

3/29/2012



$123

$50

$40

$26

Outpatient4/2/2012


Various

$3,713

$3,712

$145

$38

Part B

4/5/2012



$123

$66

$40

$26

Part B

6/10/2012

6/10/2012 Princeton Healthcare

VariousER visit

$10,167

$131

Part B

6/10/2012

6/10/2012 Edward A. Wingfield, M

D93010

ECG Routine

$39

$9

$7

$2

Part B

6/10/2012

6/10/2012 Pia M. Garibaldi, M

D

99284ER visit

$336

$130

$104

$26

Part B

6/10/2012

6/10/2012 David C. Youmans, M

D70450

Computed Tom

ography$218

$45

$36

$9

Part B

6/10/2012

6/10/2012 Edward A. Wingfield, M

D93010

ECG Routine

$39

$9

$7

$2

Outpatient6/13/2012

6/13/2012 Capital Health

A0425M

ileage

$35

$35

$33

$2

Outpatient6/13/2012

6/13/2012 Capital Health

A0427Am

bulance

$3,025

$3,025

$2,935

$90

Part B

6/13/2012

6/13/2012 Andrew J. Shanahan, MD

93010ECG Routine

$39

$9

$7

$2

Part B

6/13/2012

6/13/2012 Jonathan A. Lebowitz, MD

71010Radiologic Exam

Chest$186

$10

$8

$2

Part B

6/13/2012

6/13/2012 Dennis P. Price, MD

99291Ciritcal care 1st hr

$620

$0

$0

$0

Part B

6/13/2012

6/14/2012 Princeton Healthcare

VariousOutpatient

$12,084

$130

Inpatient

7/1/2012


Various

$81,337$81,337

$21,088

$1,156

$0

Part B

7/1/2012

7/1/2012 PRN 1st Aid

A0429Am

bulance Basic

$674

$392

$314

$78

Part B

7/1/2012


99284ER visit

$336

$92

$74

$18

Part B

7/1/2012


93042ECG

$50

$8

$6

$2

Part B

7/1/2012

7/1/2012 Frederick M. W

einberg, MD93010

ECG

$39

$9

$7

$2

Part B

7/2/2012

7/2/2012 Exceptional Medical Trans A0428

Ambulance Basic

$772

$296

$237

$59

Part B

7/2/2012

7/2/2012 Exceptional Medical Trans A0425

Ambulance--M

ileage

$77

$49

$39

$10

Part B

7/2/2012

7/2/2012 Cai Yuan, MD


$186

$140

$112

$28

Part B

7/3/2012



$99

$73

$59

$15

Part B

7/4/2012



$99

$73

$59

$15

Part B

7/5/2012



$99

$73

$59

$15

Part B

7/6/2012



$99

$73

$59

$15

Part B

7/7/2012



$99

$73

$59

$15

Part B

7/8/2012



$99

$73

$59

$15

Part B

7/9/2012



$99

$73

$59

$15

Part B

7/10/2012



$99

$73

$59

$15

Part B

7/11/2012



$99

$73

$59

$15

Part B

7/12/2012



$99

$73

$59

$15

Part B

7/13/2012



$99

$73

$59

$15

Part B

7/14/2012



$99

$73

$59

$15

Part B

7/16/2012



$99

$73

$59

$15

Part B

7/17/2012



$99

$73

$59

$15

Part B

7/18/2012



$99

$73

$59

$15

Part B

7/19/2012



$99

$73

$59

$15

Part B

7/20/2012



$99

$73

$59

$15

Part B

7/21/2012



$99

$73

$59

$15

Part B

7/22/2012



$99

$73

$59

$15

Part B

7/23/2012



$99

$73

$59

$15

Part B

7/24/2012



$99

$73

$59

$15

Part B

7/25/2012



$99

$73

$59

$15

Part B

7/26/2012



$99

$73

$59

$15

Part B

7/27/2012



$99

$73

$59

$15

Part B

7/30/2012


99238Hosp Discharge

$150

$73

$59

$15

Part B

7/20/2012

7/20/2012 Anatoliy M. Yanovskiy


$186

$67

$53

$13

Part B

7/21/2012

7/21/2012 Richard A. Pessagno, CNS99231Subs. Hosp Care

$73

$34

$27

$7

Part B

7/23/2012

7/23/2012 Noreen A. Mercando


$200

$140

$112

$28

Part B

7/28/2012

7/23/2012 Firoz P. Rahman


$99

$73

$59

$15

Part B

9/17/2012

9/17/2012 Lab Corp

85025Blood Count

$37

$11

$11

$0

Total

$97,806

$16,776

$100,000?... Still Counting…

5

The Family Experience

9

“…Business Models...”

10

Value in Mental Health Services

11

What is the Problem? (Kaplan &

Porter, 2011)

“…almost complete lack of understanding of how much it

costs to deliver patient care, much less how those costs compare with

the outcomes achieved.”

Robert Kaplan & Michael Porter

12

What is the Goal?

Access? Availability? Equity? Cost containment?

VALUE for the Consumer

13

Value: Definition (Oxford English

Dictionary)

The regard that something is held to deserve; the importance, worth, or usefulness of something: your support is of great value

the material or monetary worth of something

the worth of something compared to the price paid or asked for it

14

Value in Health Care

15

Value: A Calculation (Porter,

2010)

Value = ❑❑

𝑂𝑢𝑡𝑐𝑜𝑚𝑒𝑠𝐶𝑜𝑠𝑡𝑠

16

Outcomes (Porter, 2010)

Multidimensional By steps… Over time…

17

Outcomes Measures Hierarchy (Porter, 2010)

18

Challenges of Health Care Costing (Porter, 2010)

Complex delivery Many resources Each with different capabilities and costs

Fragmented delivery “Idiosyncratic” (i.e., “Individualized”) Highly customized “job shop”

19

Costs: How To Measure? (Kaplan & Porter, 2011)

Track the… sequence and duration

0f the… clinical and administrative

processes

used by the… individual patient

Time-Driven Activity-Based Costing (TDABC)

20

Time-Driven Activity-Based Costing(Kaplan & Porter, 2011)

Patient Jones’ outpatient visit…

Provider Tasks Time Rate Cost

Administrator

Check-in, register, document payment

18 minutes (0.3 hours)

Nurse Take temp, weigh, take BP, prep


Doctor Direct exam, consultation

9 minutes (.15 hours)

21

Time-Driven Activity-Based Costing(Kaplan & Porter, 2011)

𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠 𝐴𝑡𝑡𝑟𝑖𝑏𝑢𝑡𝑎𝑏𝑙𝑒𝑡𝑜𝑅𝑒𝑠𝑜𝑢𝑟𝑐𝑒𝑖𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒𝐶𝑎𝑝𝑎𝑐𝑖𝑡𝑦 𝑜𝑓 𝑅𝑒𝑠𝑜𝑢𝑟𝑐𝑒𝑖

Capacity Cost Rate for Resourcei =

22

TDABC(Kaplan & Porter, 2011)


Capacity Cost Rate for Resourcei =Salary (nurse) $65,000

Supervision cost $9,000

Occupancy (9 m2 x $1200/m2/yr)

$10,800

Tech & support $2,560

Annual nurse cost $87,360

Monthly nurse cost $7,280

❶

❶

23






$10,800




Start with 365 days

Less: w/e, vac’t’n, holidays, sick, etc.

141 days

Available 224 days/yr

Available days (a)

18.7 days/mo

Start with 7.5 hours/day

Less: breaks, meetings, etc.

1.5 hours

Available hours (b)

6.0 hours/day

Total Capacity (a x b)

~112 hrs/mo

❷

❷

❶

❶

24






$10,800




Start with 365 days


141 days


Available days (a)

18.7 days/mo



1.5 hours

Available hours (b)

6.0 hours/day


~112 hrs/mo

Nurse’s Capacity Cost Rate = $7,280 -:- 112 hrs = $65/hr

❸

❸

❷

❷

❶

❶

25




Administrator





$65/hr



❸

26




Administrator



$45/hr $13.50



$65/hr $26.00



$300/hr $45.00

$84.50

27

Value Measurement (Porter, 2010)

What is the proper unit?

All services and activities that jointly determine success in meeting a set of consumer needs.

“Integrated practice units”

28

Value Measurement, 2 (Porter, 2010)

Separately for each condition…with other conditions “risk adjusted”.

Not separately by department or billing unit

29

Costing: The Whole Process (Kaplan & Porter, 2011)

1. Select the condition2. Define the care delivery value

chain (CDVC)

30

2. Care Delivery Value Chain (Kaplan & Norton, 2011)

31

2. Care Delivery Value Chain (Kaplan & Norton, 2011)

32


chain (CDVC)3. Map each activity


33

3. Map the Process (Kaplan & Porter,

2011)

34


chain (CDVC)3. Map each activity4. Obtain time estimates5. Estimate resource supply cost6. Estimate resource capacity;

calculate capacity cost rate


35

5. Capacity Cost Rate(Kaplan & Porter, 2011)





$10,800




Start with 365 days


141 days


Available days (a)

18.7 days/mo



1.5 hours

Available hours (b)

6.0 hours/day


~112 hrs/mo

Nurse’s Capacity Cost Rate = $7,280 -:- 112 hrs = $65/hr

❸

❸

❷

❷

❶

❶

36


chain (CDVC)3. Map each activity4. Obtain time estimates5. Estimate resource supply cost6. Estimate resource capacity;

calculate capacity cost rate7. Calculate total cost


37

6 Strategic Objectives (Porter,

2012)

1. Organize system around patient2. Measure outcomes and costs 3. Pay in “bundles”4. Affiliate better (less all-service

stand-alone)5. Expand beyond narrow geographies6. Build IT, but not for a broken

system

38

Obj. 1: Organize around patient…(Porter,2012)

39

… Throughout Continuum of Care (Porter, 2012)

40

Obj. 2: Measure…the whole chain… (Porter, 2012)

41

…and up and down the hierarchy (Porter, 2012)

42

Obj. 3: Pay in bundles

NB

43

Obj. 4: Affiliate better

44

Obj. 5: Expand…

45

Obj. 6: Build IT

…but not for an unreconstructed delivery system!

46

Implications for Government (Porter, 2012)

Establish universal measurement and reporting

Shift reimbursement systems bundled Medicare to lead…

Remove obstacles to integration Stark Laws limiting referrals (“conflict of interest”)? Separate payments to hospitals and doctors? Illegal to hire a doctor as an employee?

Open competition Encourage patient responsibility Set standards and mandate EMR adoption

47

Application to Mental Health

CHALLENGES…

Medical model Localization (120

agencies) Reimbursement rates Political barriers Length of

“continuum” Individualization Scaling State v. Federal Excessive

dehospitalization Funding limits

OPPORTUNITIES…

PsyR model Wellness focus Recovery ideal PACT team model Behavioral Health

Homes Hospital consolidation Funding limits …

48

References

Kaplan, R. S., & Porter, M. E. (2011). How to solve the cost crisis in health care. [Article]. Harvard Business Review, 89(9), 46-64.

Porter, M. E. (2010). What is value in health care? New England Journal of Medicine, 363(26), 2477-2481. doi: doi:10.1056/NEJMp1011024

Porter, M. E. (2012). Value-based health care delivery [presentation to American Psychiatric Association annual meeting, Philadelphia, PA, May 8, 2012]. Boston, MA: Institute for Strategy and Competitiveness.

49

YouTube: Porter on Health Care Big Think: http://bigthink.com/ideas/14761

Porter & Kaplan interviewed by HBR (9 mins): http://www.youtube.com/watch?v=Y7HMHiv7xRg

Lecture at Center for Public Policy (90 mins): http://youtu.be/Z3fKyWydweo

http://bigthink.com/ideas/14761

http://bigthink.com/ideas/14761

http://www.youtube.com/watch?v=Y7HMHiv7xRg

http://www.youtube.com/watch?v=Y7HMHiv7xRg

http://youtu.be/Z3fKyWydweo

http://youtu.be/Z3fKyWydweo

the concept of value in mental health services

Documents

monthly nurse cost

annual nurse cost

supervision cost

cost containment

outcomes porter

hrsmonurses capacity

hrsmo23tdabckaplan porter

65hr24tdabckaplan porter