A member of Verras Healthcare International

Using Quality Metrics to

Create and Distribute Savings in a

Global Payments Environment

Illinois HFMA August 20, 2012

2

Reducing: Clinical

Variations

• Estimated cost savings opportunities • Identify Clinical & Operational Variations

1. Clinical and Operational Practice Pattern Variations

• Verras targets physicians’ documentation issues

2. Identifying Documentation Integrity Issues

• Individual MD and Group Best-Practices • Create explicit monitors for Case Management • Data-driven CPOE and Order Set optimization

3. Individual MD Clinical Practice Pattern Variations

• Quarterly Cost Savings Reports • Preparing for Global Payment Distributions

4. Integrated Cost and Quality Performance Scoring

Clinical Case Management Four Focus Areas

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Verras Sherlock™ and Watson™ Creating Change Requires Data Deep Dives

VE

RR

AS

SH

ER

LOC

K™

Identifying your internal Best Practices • 3 years all patient data • By hospital, MDC, DRG, Resources

and Physician

Understanding the magnitude and where Clinical Variation exists Evidence Based analytics Readiness for Performance Management • Quality • Resource Consumption • Patient satisfaction • Incentives Plans

VE

RR

AS

WAT

SO

N™

One-on-one w/ Physicians • Live Queries beginning week 1 • Education on costs • Parallels Best Practices with

outliers

Case Level “deep dives” • Order Location • Time Stamps and Sequencing • Primary or Consult • Order Set Variation

Hospital Processes • Case Management Review metrics • Hospitalists collaboration and

effectiveness • Vendor management • Policies and Protocols

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Estimate Financial Opportunities Identifying Potential Savings by Service Lines

From DRG to Service Line

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1 2 3 4 5

TOTAL CHARGES

LENGTH OF STAY

MORTALITY RATE

ACUITY / SEVERITY INDEX

2.1% 2.1% 5.0%

12.6%

36.9% 5.45 5.86

7.11

8.98

19.38

$12,848 $18,949

$30,858

$64,337

$111,685

• Age • Gender • Principle diagnosis • Secondary diagnoses • Procedures

FOCUS 1: Clinical and Operational Practice 3 Years of All Payer Data Pneumonia Patients:

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0 5 -5 -10 DELTA LOS PER PATIENT

$0

$5

$10

-$5

-$10

DELT

A CH

ARG

ES P

ER P

ATIE

NT

(Tho

usan

ds)

Greater Efficiencies

Fewer Morbidities

Lesser Efficiencies

Potential Morbidities

MD1. X

MD1. Y

Verras’ Best Practice Analyzer Performance versus Severity Adjusted Norms

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Heart Failure, Variance by AIM – 3 Year Study Midwest Medical Center FFY 2008- 2010

127 HEART FAILURE & SHOCK

8

0 1 2 3 4 -1 -2 -3

DELTA LOS PER PATIENT

$0

$2

$4

$6

$8

$10

-$2

-$4

-$6

DELT

A C

HAR

GES

PER

PAT

IENT

(T

hous

ands

)

M1

M2 M3

FOCUS 1: Clinical and Operational Practice 3 Year Trending Ideal Movement from Year 1 to Year 3

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Lg. & Small Bowel Surgery, Variance – 3 Year Study Midwest Medical Center FFY 2008- 2010

569 MAJOR SMALL & LARGE BOWEL PROCEDURES W CC W MAJOR GI DX

o o

10

5

FOCUS 2: Identifying Document Integrity Issues Pneumonia DRGS 193,194, 195 - Variance by AIM Score

Acuity Comparison

Pneumonia without (Cyanosis)

Pneumonia with MCC

Pneumonia with CC (Hypoxia)

Pneumonia DRGs – Midwest Hospital FFY 2007- 2009

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FOCUS 3: Individual MD Clinical Practice Comparing Doctor’s Outliers to his/her own Internal Best Practices

Sherlock is used to identify which cases will be analyzed

Example for Radiology (show at right) is replicated for all major cost categories

Typically 20 best practices and 20 LLQ

These cases are entered into Watson’s Chart Audit Tool

Watson summarizes the variation

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“Detailed clinical feedback is a must to motivate

change.” - Bill Mohlenbrock, CMO, Verras

FOCUS 3: Individual MD Clinical Practices Pattern Variations – Kidney/UTI using All Payor Data 2011

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Verras’ Watson Examining Detailed Areas of Clinical Variation

Patients: • All Severity level 4 • Females ages 83-90 • Some CV History • Ejection Fraction 40-45% • Atrial Abnormality

Internal Best Practices:

Treatment Patterns • Admitted to Telemetry, not CCU • BNP - 3 day protocols • 40% use of hospitalists • Consults on days 1-2 • Serial Troponins 1X • CT from ED only • General daily Chem Panels

Patients • 80% Diabetic • Renal failure • Pneumonia/Respiratory • Pacemaker • Average LOS: 6

Inefficient Patients:

Treatment Patterns • Admitted to and Discharged from CCU • BNPs and Comp Metabolics - Daily • 12% use of hospitalists • Consults on day 7 or later • Inactivity 4-5 days; all had Monday

discharges • 4-5 CTs, 38% redundant (consults) • Non-related procedures on 55% cases

Patients • 75% Diabetic • Renal failure* • TIA, Anemia* • Gastroenterology issues* • Pacemaker • Average LOS: 11.5

* Primary causes for LOS extension

Data-driven CPOE and Order Set Optimization

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Orthopaedics

Emergency Room

Cardiology

22% reduction in implant costs by physician education and vendor watch 9% reduction of CT Scans through voluntary changes with order sets

and acknowledgement of ER work ups

New order sets incorporating physician and nursing protocols, allowing physicians to move from 2:1 to 3:1 patient ratios Quality improvements with triage aligning ESI and EM scoring, improving

flow to mid-level practitioners and fast tracking

30% reduction in use of Telemetry for non-cardiac patients using Telemetry scorecards Assisted in customization of CPOE order sets, establishing new internal

best practice patterns, resulting in an average 0.7 day reduction for DRG 127

Hospitalists

Documentation

Converted contracts to performance based payment plans Created a new structure to align Hospitalists and Case Manager

functions and reduced clinical variation

Identified specific areas requiring documentation improvements, avoiding “shot-gun” approach to physician education Assisted physicians and hospitals to avoid risk of improper

documentation with Sepsis and Pneumonia

Annual Savings $2 million

Annual Savings $874,000

Annual Savings $612, 000

Annual Savings > $1 million

Annual Savings $387,000

FOCUS 4: Integrated Cost and Quality Performance Scoring – Recent Successes

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Distributing Bundled Payments: (MSSP, ACO, ACE, Bundled Payments, CO-OPs) Hospitals and Physicians Share A Single Payment

Hospital &

Physicians

• Total Payment -Depends on Outcomes of Enterprise

Hospital 40% &

Physicians 60%

• Sliding Scale Determines Physicians’ Distribution

Physicians 60% -Cardiology 16%

-ORS 11% -Others 43%

• Each Service’s Outcomes Determine Physicians’ Distributions

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Index of Healthcare Value (IHV-7)

Hospital F: 3 year Trends of Seven Performance Scores

“The Higher the Bar, the Greater the 3 Year Improvements”

0

200

400

600

800

1000

31 50 128 90 102

166 157

567

NHQM Pat. S. Mort. Morb. RIV Res. C. ACO M. Total

0

100

200

300

400

500

600

700

800

31 50

128

90

102

166

157

Hospital F

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IHV Example: 8 Hospital ACO/CO-OP (Quality of Care Score)

The Higher the Bar, the Greater the 3-Year Improvements

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Example: 8 Hospital ACO/CO-OP Year 1: $10M

Savings

The Higher the Bar, the Greater the 3-Year Improvements

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Financial Distributions: Year 1, Hospital H = $1.9M

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Physician and Hospital Calculations $10.0M Net Savings

Hospital H $1.9M

Physician Portion: 50-80% Sliding Scale

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Clinical and Operational Case Mgt. Benefits

Verras matches data with advisory coaching services

We guarantee our operational and clinical case management results

Our services are budget neutral

We assist CMO with physicians’ efficiencies using one on one coaching

We facilitate removing costs from the hospital’s departments

First year savings fund a full three years of QA, UM, physician coaching and practice

optimization

Benefits of MD Directed: • 1:1 and Group physician

practice pattern changes • Improved Case Management

effectiveness AND • Without adding new projects • Quantify hospital’s estimated

cost savings and guarantee our fees.

• Low cost proof of concept with 4 physicians