Accelerating Value Creation: An orthopedic example

Thomas L. Walsh PhD MS MSPT

My Two Overarching Objectives

• Start a relationship• Learn El Paso secrets that could improve the

Big Green Football team

Big Green Red Raiders

CEO Dartmouth-Hitchcock Health System

Jim Weinstein DO, MS

“We must find a sustainable health system for patients, providers, payers, and our communities”

Healthcare Productivity in Theory & Practice

A

D B

C

The Implementation

Gap

Out

com

e

Spending

A. Current outcome per dollar spent in clinical service line

B. Proven efficacy Improved outcomes with more spending

C. Real world effectiveness. All the added spending, but little or no observed improvement in outcomes.

D. Fast & frugal options/Reverse Innovation bridge the Implementation Gap, achieve better outcomes at same or slightly higher spending

The Value Equation

Value = Patient Outcome Cost of Care

We need to design systems of care and inquiry to accelerate value creation

Clinically Relevant & Actionable Data to Support Vision Achievement

• Real-time data in the clinic to improve

quality of care for each patient• Measure outcomes / improvement for

the Microsystem over time

The Spine Center’s Data Collection

Available and Actionable

Case 1

Case 1

Case 2

Case 2

Case 3

Case 3

Case 2

Preference Diagnosis

http://www.kingsfund.org.uk/publications/patients%E2%80%99-preferences-matter

Preference Diagnosis

• Canadian surgeons identified patients “eligible” for knee replacement based on x-ray only– Of the fully informed sample, 15% wanted the

procedure – Hawker 2001• Doctors believe 71% of women with breast

cancer rate “keeping my breast” as a top priority– 7% of women report “keeping my breast” as a top

priority – Lee 2010

Providers are not yet trained to make preference diagnoses

Preference Misdiagnosis• Well informed

– men with prostate disease choose surgery 40% less often – Wagner 1995

– Patients with heart disease choose percutaneous intervention 20% less often – Morgan 2000

– Patients with disc herniation choose surgery 30% less often – Deyo 2000

– Patients with spinal stenosis choose surgery 30% more often – Deyo 2000

Two Types of Medical Errors

Medical Error 1 – Sue tears her right anterior cruciate ligament, but has her left knee operated on

Medical Error 2 – Joe has his right knee replaced then learns about alternative treatments and wishes he did not have the operation

Preferences are the Silent Misdiagnosis

Getting the Preference Diagnosis Right

Meta Analysis of 86 RCTs demonstrating patients make better decisions when fully informed• More knowledgeable about the condition• Treatment more likely to be congruent with

stated preferences• Less decisional regret

– Stacy et. al. Cochrane Review 2010

Getting the Preference Diagnosis Right

Group Health Experiment 2012 • emphasized the

use of clinical data to ensure steps were taken to get the preference diagnosis correct

CLINIC LEVEL OUTCOMES AS A LEARNING TOOL

Learning as a Clinical Microsystem

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Histogram: Physical Component Summary (PCS)

0100200300400500600700

0 10 20 30 40 50 60 70 80 90 100

Freq

uenc

y 4th Quartile Spine Center Patients N = 2,840 (w ith score)

US Norm-based mean 50 (SD 10)

Limitations in self-care, physical, social, and role activities, severe bodily pain, frequent tiredness, health rated "poor."

No physical limitations, disabilities, or decrements in well-being, high energy level, health rated "excellent."

Histogram: Mental Component Summary (MCS)

0100

200300

400500

600

0 10 20 30 40 50 60 70 80 90 100

Freq

uenc

y 4th Quartile Spine Center Patients N = 2,840 (w ith score)

US Norm-based mean 50 (SD 10)

Frequent psychological distress, social and role disability due to emotional problems, health rated "poor."

Frequent positive affect, absence of psychological dist ress, no limitations in usual social/role activities due to emotional problems, health rated "excellent ."

The 4th Quartile Generate More Charges Compared to All Patients (% increase)

26%32% 34%

0%10%20%30%40%50%

Spine Center Outpatient Inpatient

Anatomy of the Spine Center Patients4th Quartile*

732 patients from 1/1/01 to 3/31/02

*4th Quartile is defined as 25% of the patients from entire cohort (N= 2,928) who scored the lowest on an average index of MCS and PCS from the SF-36 Health Status Survey, and Oswestry Disability Index from a spine disease specific survey that assesses disability (ODI converted to higher is better & 100 point scale).

15% spine diagnosis in upper back (Occ to T10)

The aim of this poster is to provide a forum to assist the Spine Center in interpretation of the collected data and to identify opportunities which can lead to improvements in access (matching supply and demand in the most efficient manner). This is the first part of the Practice Profile, Know your Patients.

Interesting Facts MCS 2.5% of US population are expected to score 30 or less14.8% of Spine Center initial visit patients scored 30 or less40.4% of the 4th Quartile scored 30 or less

Interesting Facts PCS 2.5% of US population are expected to score 30 or less52.7% of Spine Center initial visit patients scored 30 or less87.4% of the 4th Quartile scored 30 or less

Interesting Facts The 4th Quartile patients are 3 times more likely to participate in the Functional Restoration Program compared to the other patients. The 4th Quartile patients are almost 2 times more likely to have surgery compared to the other patients.

Nucleus Communications, Inc

53% spine diagnosis in lower back (T11 to Ileum)Herniated disc, also known as ruptured disc, is when

a portion of the intervertebral disc material bulges and sticks out into the neural canal.

Charges: One year episode spine specific ICD-9 codes

InterestingFactsCharges

+8%

-8%

25%

The 4th Quartile patients are distributed evenly among departments for initial visit.

Department 4th Quart All Patients PercentPhysical Med 42 128 33%Occupational Med 25 85 29%Orthopaedics 133 475 28%Nurse Practitioner 37 133 28%Neurosurgery 131 507 26%Anesthesiology 103 401 26%Rheumatology 18 77 23%Physical Therapist 173 778 22%GIM 38 174 22%Neurology 26 135 19%Family Med 6 35 17%

Provider of Care at Initial Visit

Outcome: Difference between Follow-up and Initial. Follow-up was latest survey between 3 to 7 months (average 5 months between initial and follow-up surveys)

MCS 76% 56% 53% 35% 54% 54%PCS 45% 48% 38% 25% 31% 25%Bodily Pain 60% 60% 48% 43% 62% 50%Mental Health 69% 55% 61% 39% 69% 63%

% Satisfied 79% 83% 54% 59% 62% 58%% Same treatment 74% 77% 53% 53% 62% 58%**Improved = Difference between follow-up and initial score is 5 points or greater

Satisfaction

SF-36 Norm-based Scores

4th Quart (n=124)

All Patients (n=381)

Improved**

Functional Restoration ProgramNon-SurgicalSurgicalReturn rates (RR): 4th Quartile are

more likely to return than the non-4th Quartile. For all patients; Surgery RR= 45%, Non-Surgical RR= 14%, FRP RR = 86%

4th Quart (n=30)

All Patients (n=68)

4th Quart (n=13)

All Patients (n=24)

Professional $177,638 $258 $579,919 $216Physical Therapy $151,094 $315 $416,056 $208Subtotal $328,732 $574 $995,975 $424

Pain Clinic $106,845 $155 $231,311 $86Other Prof. Fees $627,886 $913 $1,711,506 $639Subtotal $734,731 $1,068 $1,942,817 $725

MHMH - surgical $496,675 $722 $1,261,178 $471Inpatient $715,615 $1,494 $1,643,818 $822Other $639,535 $1,335 $2,067,873 $1,034Subtotal $1,851,825 $3,551 $4,972,869 $2,327

Total $2,586,556 $4,619 $6,915,686 $3,052*Clinic charge file had 688 for the 4th Quartile patients and 2,679 for All patients. Hospital charge file had 479 for the 4th Quartile patients and 2,000 for All patients.

4th Quartile All PatientsSum of

Charges$ per 4th Quart*

Sum of Charges

$ per Patients*

Spine Center

Outpatient

Inpatient

4th Quart All Patients

Jan. '01 to Mar. '02 732 2928

<= 24 years 4% 5%25 to 64 years 85% 77%

65+ years 11% 19%

Female 55% 53%

Unique Patients

Age Distribution

Gender

4th Quart All Patients

1 or more year(s) w/condition 68% 68%Prior Surgery 21% 14%

Missed work > 3 months 30% 14%Currently taking Narcotics 56% 30%

2 or more co-morbidities 74% 60%Previously seen 2+ types of providers 87% 80%

other Descriptors

Herniated Disc 25%Other 18%

Chronic Pain 18%DDD/Aging Spondylosis 13%

Pain Unknown 7%Stenosis 6%

Chronic Sprain 4%Spondylolisthesis 3%

Acute Sprain 3%Trauma 1%

Top 10 Diagnoses for the 4th Quartile

Value = Patient Outcome Cost of Care

Healthcare Production Costs

The amount it takes to pay personnel, rent, and for materials used to provide healthcare.

–Charges–Institutional costs–Healthcare costs

Healthcare Population Spending

The amount spent to reimburse providers of healthcare services & equipment.

–Societal costs –Expenditures–Reimbursement–Healthcare costs

Population Spending on iPads is rising,

but the Production Costs of tablets are not.

Bending Population Spending Requires Bending Production Costs

$

Time

Current Production Costs

Operating Margin 4-10%

Production Costs > Population Spending

Population Spending Estimates Based on Past Claims

New Production Costs Required to Maintain Margin

THE POPULATION LEVEL

Founder of The Dartmouth Institute for Health Policy and Clinical Practice

Jack Wennberg"Given the magnitude of the variations the possibility of too much medical care and the attendant possibility of illness that is caused by medical care is presumably as strong as the possibility of not enough service and unattended morbidity and mortality."

Distribution of Healthcare Spending

Per Condition for Similar PatientsAdapted from “Cowboys and Pit Crews” by Atul Gawande, The New Yorker. May 26, 2011

Distribution of QualityHealthcare Provision

Cost and Quality Curves Match

Implication

Curves MatchReducing health care spending impairs quality

What the Data Tell Us

Cost & Quality Curves Do Not MatchSome Areas Provide Above Average Quality at Below Average Spending

Implication

Curves do not matchIt is possible to reduce spending and improve quality

Types of Variation

• Benefits outweigh risks• Problem of under-use

Preference-sensitive care

• Significant tradeoffs between 2 or more treatment options that affect quality or length of life

• Problem of mis-use

Supply-sensitive care• Supply of resources governs the

frequency of their use• Problem of over-use

Beta blocker use among patients post heart attack varies from 5%-92%, when it should approach 100%

71% of doctors rate breast conservation as one of the top 3 concerns of woman diagnosed with CA while 7% of woman rate it similarly

Two similar cities with similar populations – one has twice as many hospital beds.

Ratio of Rate in Highest to Lowest Spending Regions (risk-adjusted)

Reperfusion in 12 hours for AMI

Mammogram, Women 65-69

Effective Care (HEDIS measures)

Flu shot during past year, elderly

Aspirin at admission for AMI

Total Hip Replacement

Back Surgery

Cataract ExtractionPreference Sensitive Care

Total Knee Replacement

Office Visits

Initial Inpatient Specialist Consultations

Pulmonary Function TestTotal Inpatient Days

Supply Sensitive Care

Inpatient Visits

Chest X-ray

Inpatient Days in ICU or CCU

1.00 1.5 2.00.5 25 3.0

Lower in High Spending Regions Higher in High Spending Regions

Decreased Risk

Relative Risk of Death Across Quintiles of Spending

1.00 1.05 1.100.95

ColorectalCancer

Q1

Hip Fracture Q1Q2Q3Q4Q5

Q2Q3Q4Q5

MyocardialInfarction

Q1Q2Q3Q4Q5

Increased Risk

Fisher ES, Wennberg DE, Stukel TA, Gottlieb DJ, Lucas FL, and Pinder EL.The implications of regional variations in Medicare spending. Part 2: health outcomes and satisfaction with care. Annals of Internal Medicine, 2003. 138: 288-98.

Q1 = Lowest spending HSA’sQ5 = Highest spending

Benefit-Utilization Curve Effective Care

Benefit-Utilization Curve Preference-Sensitive Care

Benefit-Utilization Curve Supply Sensitive Care

Cost & Quality Curves Do Not Match

Some Areas Provide Below Average Quality at Above Average Spending

Implication

It is possible to reduce population spending and improve quality.

Healthcare Value

Value = Patient Outcome Cost of Care

The Population PerspectiveData within organizations – financial, operations, productivity – all point to increasing throughput & utilization to survive

Relative Efficiency Comparisons – A Tale of Two Cities

Larger perspective reveals a different perspective

Healthcare Productivity in Theory & Practice

A

D B

C

OutcomeThe

Implementation Gap

Spending

“All patients should receive the care they need, and no less. They should also

receive the care they want, but no more.”Al Mulley, Director of The Dartmouth Center for Healthcare Delivery Science

Dartmouth College’s 12th President

John Sloan Dickey“The world’s troubles are your troubles, …. and there is nothing wrong with the world that better human beings cannot fix.”