The Healthcare Management Council, Inc. Delivering Cost and Quality Benchmarks for your Hospital organization.

Control the costs with physicians

By Shelley Burns

For many years, finance people have accepted steadily increasing clinical costs as “the way healthcare is.” Talking to physicians and nurses about costs resulted in glazed eyes. This was due mostly to the fact that the care processes were so complex that they couldn’t even begin to think where to start on a cost improvement project for a specific nursing unit or patient. The daunting task of gathering up all the data and then plowing through it made most nurses cringe and most physicians frustrated.

Now with severity-adjusted DRGs, hospitals have tools at their disposal to see slight and nuanced variations in cost across similar groups of patients. They can benchmark costs/DRGs with other hospitals and see whether they are more or less expensive. External cost comparisons are a powerful tool and can help hospitals see where opportunities lie.

In the past, it was easy to dismiss external cost comparisons to other hospitals as being patient driven  – “We are a tertiary referral hospital and our patients are sicker.” Nowadays, it’s harder to dismiss the external comparisons, especially with severity-adjusted DRGs. True, the more detailed coding and severity adjustments make comparing external costs easy. But, it’s still hard to convince clinicians that an external benchmark is achievable. It’s hard to “know” what the practices are at the other hospitals and requires a lot of hard work to identify which practices impact cost and quality.

So where to start? Start with a look at your own internal cost variances across DRGs. Why? Because cost variance is the explicit manifestation of an underlying variance in practice. Who drives the variation in practice? Physicians. Identifying and analyzing cost variances at the DRG level within your hospital’s four walls will enable you to uncover your own internal best practices – the best outcomes at the lowest prices. And it’s much easier to do than external benchmarks because all the players know each other. It’s a lot easier for physicians to talk to one another about their practices when they are sitting together in a room, reviewing internal cost comparisons.

Make sure you have compelling, actionable, and accurate data. Then sit your physicians around a conference table and walk through the data. You’ll be surprised how much everyone will learn and you’ll pave the way for truly understanding cost variation, improving clinical utilization, and the better stewardship of our healthcare resources.

Shelley Burns is head of knowledge management for HMC

Joint Commission on a confused track

By Thomas Day

Mark Chassin’s study of his organization’s quality process measures was interesting to those of us who find “process” measures typically indirect, micro-focused, and therefore misguided as an approach to improving quality. While the criteria he used to evaluate the measures seem to make sense on the surface, let’s take a step back and ask what the heck we’re trying to do, anyway – i.e., improve healthcare quality – and are process measures the way to do this?

First, the good news. Some of the process care measures seem useful – if caregivers do these things, the outcome will be better. Early intervention with blood thinners for heart attacks is a good example. Administering blood thinners as early as is practical, with today’s technology, is an unambiguously good idea, so that’s a good one, I guess. PCI within 90 minutes? Sure seems like the right thing right now, again, with today’s technology. Okay, we have two good measures covering what, one percent of all inpatient cases?

Now for the bad news. There are a lot of things that aren’t heart attacks. Only one other measure for doing something quickly has been identified: in this case “Initial Antibiotics within 6 Hours” for pneumonia. Other process-of-care measures are the bare-bones basics – “Appropriate initial antibiotic” or “Assessment of LVS Function.” Can this possibly be an effective documentation task? Not much meat on these bones, to my eye.

And then you get to Surgical Infection Prevention. Seems to me that actually measuring Surgical Infections, as AHRQ measures do, without any additional documentation burden, I might add, is the way to get at performance issues on this one.  Tracking “Hair Removed Using Safe Method-Pre Surgical,” “Prophylaxis Antibiotic – Right Kind,” and “Prophylaxis Antibiotic Stopped w/in 24” seem more than basic, unspecific in their measurements, and yet inflexibly tied to current practice methods.

So to my way of thinking, the Joint Commission-directed study does little more than confirm it likes its own measures, and will continue to burden the industry with these measures, given its power position in the accreditation process.

Urging greater scrutiny of quality process measures is definitely the right idea. Mr. Chassin’s study seems to just smooth over the basic problem with the whole approach – meanwhile public data and other pathways become stronger and are leaving JCAHO’s approach in the dust.

Thomas Day is president of HMC

Sentara to open regional orthopedics facility

HMC client Sentara Healthcare is wrapping up work on its new 18-bed, $22 million orthopedics facility, based in Hampton, Va. According to a recent article in the local press, this Orthopaedic Hospital at Sentara CarePlex will be  the only regional facility dedicated to orthopedics. The building is currently two stories, but can expand out to three should the need arise. After it opens on July 5, it will provide orthopedic services from pre-operative care and surgery to rehabilitation and home care services.

The government’s not-so-dirty, not-so-little secret

By John Whittlesey

(This is the second part of a two-part blog)

The second “ah-ha” moment happened on the drive to work recently. A story on NPR discussed the recent announcement that the VA would become the first health system nationwide to develop and implement new methods of classification and monitoring to decide where various inpatient surgeries should be performed. (This decision was the result of a highly-publicized story of nine deaths in one year at a single VA facility in Marion, Ill. This occurred several years ago, and forced the VA to reassess how and where it was providing care.)

Essentially, this resulted in three levels of surgical procedures – standard, intermediate, and critical. Based on the resources available, infrastructure, volumes, outcomes, and several other criteria, each VA hospital is classified to provide care on one of these levels. Each of the VA’s 21 hospital networks has developed a surgical strategic plan to ensure that veterans receive needed care during the implementation process. (In reality, there were very few changes in terms of which facilities could still perform critical procedures.)

Again, this sounds like a good business decision to standardize care to ensure the best patient outcomes and efficient use of scarce clinical resources. If this were done in the private sector, I doubt it would go unnoticed or without a long and expensive series of congressional hearings. Interestingly enough, the VA’s surgical review program is expected to be expanded to include standards for outpatient surgery in the future. Here’s the link to a related article by Janice Simmons in HealthLeaders Media, explaining more about the program.

Similarly, Don Berwick’s ”Triple Aim” concept to consolidate and integrate delivery models based on improving the experience of care, improving the health of populations, and reducing the per-capita costs of healthcare may be the model that the private sector can adopt over time. If he’s successfully instated as President Obama’s new head of CMS, it may have a chance. Read Berwick’s full article here on the Triple Aim.

So, could the VA be getting the jump on the rest of the country by adopting a uniform delivery model across the continuum of care, focused on preventative and chronic care? No one seems to be crying foul about socialized medicine and a government conspiracy to take over the healthcare systems here. This may be the largest non-secret in the government today.

John Whittlesey is an HMC Principal

HMC:Nurses frustrated by documentation and systems

Supplies, computer systems, and other issues keep nurses from bedside

NEEDHAM, MASS. –  June 22, 2010 – The Healthcare Management Council, Inc. (HMC) has found time-consuming and redundant patient processing and documentation are among the biggest time-wasters for nurses.

Time away from patients to complete redundant or non-medical tasks is a huge source of frustration to nurses. It can reduce quality of care, create patient dissatisfaction, and lead to staff turnover, says Michelle Gray-Bernhardt, an HMC knowledge manager. “Time-wasting is a serious problem for nurses. They are eternally frustrated by the tasks that take them away from patients. Their aggravation can create low morale and that causes turnover. That means you’re spending time, money, and resources to hire and train more nurses. That’s expensive, and it’s not always an easy thing to do, given today’s healthcare climate,” she says.

To address this, HMC recently sponsored an online survey on the KnowledgeWeb portal to pinpoint where the greatest inefficiencies were.  “We asked nurses what tasks take them away from the patient bedside and feel like time-wasters,” Gray-Bernhardt says. “A wide-ranging sample of nurses from various units chose broad categories, such as documentation, gathering supplies, physician interaction, patient flow, and the lack of support staff.”

And the winners are….

Nurses outlined the greatest time-wasters as follows below. Each category is ranked  in the order of the percentage of nurses that selected it:

Charts and documentation (55%). These are interrelated topics: Overall, documentation creates inefficient processes, but especially when nurses are working with computer systems. Nurses cited electronic documentation as the worst time waster – this includes having to enter data twice into separate incompatible systems, or working with “hybrid” paper and electronic systems.

“Anything that requires duplication and looking at different sources of information is a waste of time,” notes Gray-Bernhardt. “In some cases, nurses enter patient status information on one system, and then have to reenter the identical data on another system.” Nurses were also frustrated when discovering that charts were missing or incomplete, or by situations that required them to add what they considered excess information.

Finding and gathering supplies and equipment (19%). Whether seeking supplies or equipment, time spent searching equals time spent away from patients. Hospitals should look at improving utilization patterns to ensure the availability of supplies in the particular units where nurses are.

Patient flow (15%). Nurses in medical and surgical groups said waiting for – and sometimes admitting – patients was a major time-waster. Also in this category were the unavailability of exam or treatment rooms and having anomalous patients on units. Sometimes nurses found they needed to find patients and retrieve them from other units, as well as locate beds for them when their own units had no available space.

Physician interaction (15%). Waiting for communication with physicians is highly frustrating for nurses. Moreover, doctors and hospitals are behind the curve when it comes to high speed electronic communications. Nurses often wait for return phone calls, and find it challenging to gather post-round information, medication orders, discharge orders, and other necessary information.

Redundant and decentralized communication with families (11%). Patients’ family members call frequently and unexpectedly, and when there is no clear family spokesperson, this leads to redundant communications. Factor in that multiple family members will call daily with status requests and discharge information, and the result is that nurses spend too much time providing the same data.

HMC offers solutions to these challenges and many others on its KnowledgeWeb portal, available to clients.

The government’s not-so-dirty, not-so-little secret

By John Whittlesey

(Part one of a two-part blog)

When I was in grad school – oh so many moons ago –  I learned the history of the early healthcare system in the United States. There was the Hill-Burton Act to build hospitals in rural and under-served areas; the social safety nets of Medicare and Medicaid; the evil for-profit models; the even scarier “DRG” classification and reimbursement models about to be implemented; and the then-emerging managed care products, etc.

The one fact that completely surprised and dismayed me was that there were two separate and parallel health delivery networks outside of the general private health system: the Department of Veterans Affairs (VA) system, and the military health system. Over the past 25 years, my mantra has been that if I were in charge of the national health system – and it’s a good thing I’m not! – the first thing I would do would be to get rid of the VA and integrate it into the private health systems we all use. We’d use vouchers or whatever to make sure that veterans still get the full service they deserve.

Now, I’m not so sure.

Two recent developments caught my eye and have made me think differently about the situation (yes, it is possible for me to change my mind). We’ve all heard the horror stories about the mistreatment of veterans (remember Tom Cruise in Born on the 4th of July?), along with big access and quality problems, have created a general impression that the VA system just isn’t as good as the private health system. Well, over the years it seems that the government and VA leaders have stepped up their game, and cleaned up many of the structural, facility, and clinical messes.

Phillip Longman, senior fellow at the New America Foundation and author of a book about the VA called “Best Care Anywhere,” discusses how the VA has been developing a model of integrated care delivery along the continuum of care (primary, outpatient, inpatient, aftercare, and preventive medicine). He holds that the VA is now the model of choice for the country to follow under healthcare reform. “The rest of the health-care system doesn’t have a business case for quality,” Longman says.

Most of this is being accomplished through one of the largest and most comprehensive electronic medical record projects to date. It’s a way of capturing longitudinal patient information and integrating it into patient care practices. This uniform, standardized, integrated, and theoretically efficient system will sound like a good business to some; to others it may sound like socialized medicine. Score one for the VA.

(Read a related article MarketWatch article by Kristen Gerencher here.)

John Whittlesey is a Principal at HMC

Customer success: Floyd Medical Center

Floyd Medical Center was able to cut costs, improve quality, enhance operational excellence, and align and focus its goals using the HMC Clinical iBenchmark. This software-as-a-service (SaaS) tool allowed Floyd to identify off-quality issues and their cost to the facility. It also assisted management in cost-cutting prior to the current economic downturn. As a result, Floyd has maintained quality and kept expenses flat while improving market share.

The Client

Floyd Medical Center’s healthcare system provides a complete continuum of medical care to serve the needs of  Northwest Georgia and Northeast Alabama through 22 physician offices and 5 urgent care facilities. Floyd also offers diagnostic, hospice, behavioral health, and hospital services. The hub of these services is Floyd Medical Center, a 304-bed full-service, acute-care hospital and regional referral center. Floyd is an economic force in the community as well, with over 2,200 employees who provide care in 40 medical specialties.

Floyd Medical Center supports a Bariatric Surgery Center of Excellence and Joint Commission-accredited programs for stroke and total joint replacement. Additionally, Floyd is a state-designated Level 2 trauma and emergency care center and a Level 1 neonatal intensive care unit. Floyd also has specialty centers for behavioral health, breast health, as well as wound,  intensive, and critical care. Other centers offer hyperbarics, inpatient and outpatient rehabilitation services, inpatient and outpatient surgery, interventional cardiology, newborn care, oncology, pediatrics, and women’s services. It supports these specialties with comprehensive radiology, respiratory,  and laboratory services.

The Challenge

Floyd defines its organizational culture by focusing on excellence.  The facility goes well beyond expectations in all areas of the Floyd “Value Compass.” This includes customer service, quality, strategy, finance, and people. Each of these focus areas benefits from the application of Six Sigma methodologies and principles. Teams of leaders and front-line employees are continuously  finding ways to reduce waste and improve quality of care. However, identifying opportunities for improvement from general ledger applications had proved to be an impediment, requiring manual data compilation and the generation of cumbersome spreadsheets. Additionally, aggregating clinical care data from physicians was prohibitively difficult.

The Solution

In 2005, Floyd adopted HMC’s iBenchmark tool to help leaders identify cost-reduction opportunities. The iBenchmark’s Internet-based interface eases access to a variety of operational and clinical data that are analyzed to discover departmental budget outliers and root causes.  HMC also creates dashboards for monitoring improvements. According to Floyd Vice President Alison Land,  “HMC’s benchmarking data also enables Floyd to compare itself to peers and match its performance with industry best practices.”

Enhancing the  functionality was the fact that iBenchmarks didn’t require excessive hardware, software, consulting, maintenance or licensing costs. HMC analysts oversaw the data validation process in the  iBenchmark system, which shortened the rollout time,  and ensured the project didn’t absorb already stretched internal IT resources.

The Results

Floyd used HMC iBenchmarks and other tools, including the Clinical Analyzer, to improve operations and maintain high quality patient care. “It’s not enough to see opportunities at a high level,” says Land. “This gives you the tools to find out where the specific opportunities are, and that is the real value of the HMC tools and data.” The results fall into the following broad categories:

Spending Reductions

Floyd used the web-based interface to identify specific areas in which the organization could reduce spending – without impacting patient care. They included:

Nursing. HMC was instrumental in the nursing budgeting process, helping the organization to create financial targets that were tied to an incentive program, resulting in a $3 million savings. “Because of the success with the HMC benchmarking for nursing salaries, Floyd will begin deploying its HMC salary target approach in other clinical and ancillary areas, such as surgery, rehabilitation, and behavioral health over the coming year,” says Land.

Marketing and operations. Floyd slashed $800,000 in marketing and advertising costs while maintaining its regional market share, and actually increased patient volume. In 2009, there was no marked increased in operational spending, but Floyd realized increases in both revenue and operating margin.

Quality improvement

Floyd used the HMC Clinical Analyzer to identify physicians and departments responsible for expensive off-quality conditions, such as pressure ulcers and length of stay (LOS) in specific diagnosis-related groups (DRGs). This significantly impacted the organization in the following ways:

• Floyd eliminated bedsores over a six-month period.
• The average LOS and the related costs were significantly reduced for patients in targeted high-LOS DRGs.

Peer Comparisons

Because HMC factors in operational statistics from other providers of similar size and markets to Floyd, the Floyd staff was comfortable with apples-to-apples comparisons. General ledger, payroll, and volume statistics give HMC analysts the ability to establish fair cost comparisons with adjustments made for inflation and regional wage rates. HMC also has the capability to connect senior leaders and managers with their counterparts to collaborate and network around process improvement and best practices.

Trusted Numbers

Traceable, accurate data are essential to process improvement. They provide direction, measure progress, and help the organization to identify variants and to set actionable goals. Data also helps senior leaders to demonstrate to physicians, other health care professionals, and managers where their peers are on quality and cost issues. HMC benchmark reports serve as the basis to help leaders set realistic goals for performance improvement projects.

Selecting Best Opportunities

The iBenchmarks and Clinical Analyzer drill-down tool deliver all of the information needed  to prioritize the organization’s cost and quality opportunities in a simple, easily accessible, and understandable format. “The drill downs allow for high-level reviews that are needed to strategize and set priorities, but also allow for the deep dives that process improvement teams need to identify root causes and issues that need to be addressed,” Land says. “We love that it tells you exactly what you need for the business justification for a project to be approved.”

HMC Best Practice Takeaway

“The best way to ensure that the data and tools are completely leveraged and that you receive the maximum return on investment is to secure executive-level participation in the benchmark results and the project prioritization process,” Land says. “Executive interest will wane unless consistent feedback of successful achievement is delivered”.

About HMC

HMC is the leading provider of actionable performance benchmarking, encompassing quality, cost, productivity, patient satisfaction, span of control, best practices and dashboards. HMC enables hospital managers to achieve their full potential for excellence. For further information, visit our website at http://www.hmc-benchmarks.com

Inova Mount Vernon designated primary stroke center

The Joint Commission this month certified Inova Mount Vernon Hospital as a primary stroke center. It’s now one of an “elite” group of less than 20 centers in Virginia, Inova announced. Inova Alexandria, Inova Fairfax, and Inova Loudoun are already  primary stroke centers. The Joint Commission handles the accreditation and certification of over 17,000 healthcare organizations and programs in the U.S.

How much do you know about your hospital?

By Shelley Burns
Do you know …

1. How many hospital-acquired pressure ulcers you had last year?
2. How much additional care, in dollars, did patients with hospital-acquired pressure ulcers require?
3. What are the top three DRGs contributing to your pressure ulcers?
4. Which three DRGs are the biggest losers (i.e., payment is less than cost) for your hospital?
5. How much money, in total, did these three DRGs lose?

These answers and more are available in the HMC Clinical Analyzer.  Take the HMC Clinical Analyzer quiz to test your skills and discover more about your hospital. Participants with 100 percent correct on the quiz will be recognized in next month’s newsletter and receive a cup of coffee (Starbucks gift card) on HMC.

Want a refresher before you take the quiz?  Join us on Thursday, July 24 for a Clinical Analyzer overview.

Shelley Burns is head of knowledge management at HMC.

So much for stewardship

By John Whittlesey

We have a facility – that will remain nameless – which has gone through a major physical transformation over the past three years. It recently built a brand-new, state-of-the-art tertiary facility to replace its older facility, but essentially keeping the same services intact. Now prior to the move, they certainly didn’t have what I would consider to be a cost-effective model of delivering healthcare.

So, when they were planning and building this facility, I advised one of the key planner-implementers of the project to take advantage of this singular opportunity to redesign the staff’s processes, productivity, utilization patterns, clinical protocols, etc. This could allow the facility, in effect, to “reset” its cost position in a new environment. He assured me the managers were working those things into the plans. I crossed my fingers and hoped for the best.

So we’ve just finished the facility’s 2009 clinical benchmark, and I was curious to see what major changes occurred. I went back to the 2007 report to see what its cited excess was at the old facility, and compared it to the first full data set under the new facility (FY 2009). Interestingly enough, the excess was 5 percent greater in the new facility than before, its cost/case was nearly the same, and most of the same DRGs were cited for similar variation.

So, to my eye nothing really changed, except they have a new, pretty facility. Is that really good stewardship of healthcare resources?

John Whittlesey is principal at HMC