© 2013 Health Catalyst Proprietary and Confidential © 2013 Health Catalyst Proprietary and Confidential December.
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© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
December 17, 2013
How to Drive ROI in Your Health Care Improvement Projects
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
PresentersBobbi Brown, Vice President of Financial Engagement, Health Catalyst. Ms. Brown started her healthcare career with software sales and service at McKesson in the Technology Solutions Group. She worked at Intermountain Healthcare before moving to Sutter Health and, later, Kaiser Permanente, where she served as Vice President of Financial Planning and Performance. At Intermountain Health Care, she partnered with clinical teams to analyze and measure financial impact of the clinical programs. She holds an MBA from the Thunderbird School of Global Management as well as a BA in Spanish and Education from Misericordia University.
Leslie Hough Falk, RN, MBA, PMP, Health Catalyst. Prior to joining Health Catalyst, Leslie held positions as a Nurse Informaticist, Director of Biomedical Engineering, Clinical Engineer for Kaiser Permanente-Northern Region and Pediatric ICU RN. Ms. Falk also worked with Hewlett-Packard in several clinical, marketing, sales and support leadership roles. She holds a Master of Science degree in Community Counseling from Seattle Pacific University as well as an MBA and Bachelor of Science in Engineering from the University of Nevada, Las Vegas. She is also a certified Project Management Professional (PMP), Lean Green Belt and Information Privacy Professional (CIPP/CIPP IT).
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 3
Agenda
• Why IT ROI is increasingly important in Health Care improvement projects
• ROI in Health Care versus other industries
• Health Catalyst 4- step approach for driving ROI
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Poll Question #1
What is your primary area of focus? Physician/Provider
Nursing
Finance
Information System
Other
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
The Increasing Importance of ROI in Health Care Improvement Projects
5
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
Stagnating Margins
6
Source: Medpac report March 2013
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-20%
-15%
-10%
-5%
0%
5%
10%
15% Medicare Margins for Hospitals
IP
OP
Overall
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Competing Trends
Accountable Care Organizations
Shared savings for groups of doctors and hospitals, and
other providers who deliver quality care and spend wisely.
Bundled Payments Payment arrangements that include financial andperformance accountability for episodes of care.
Health Care Organizations
Improve Quality Reduce Costs
Increase Value
Value Based Purchasing Links payment more directly to the quality of care.
Population Health Balancing the
need for individuals and populations while caring for a larger number of patients.
Reduced Readmissions Becoming more
efficient at preventing services that once contributed to the bottom line.
Eliminate Waste Improving
quality and reducing costs while meetingexpanded regulatory data collection and surveillance requirements.
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
IT ROI in Health Care versus Other Industries
8
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ROI Measurements and Complexity of Environment
Source: Journal of Healthcare Information Management — Vol. 17, No. 4
Phase 1Investments with Direct Cost
Savings or Revenue Increases (e.g. financial systems)
Phase 2 Investments to improve
Productivity and Reporting (e.g. department systems)
Phase 3Investments to improve Quality of
Product or Service (e.g. clinical systems)
More
Hard
Complexity of the Environment into which IT Investment is Made
Easy
Measurement of Return on Investment
Less
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Unique Health Care Governance and Payment Model
Source: Journal of Healthcare Information Management — Vol. 17, No. 4
Physicians
Patient
Other Caregivers
Facility
Payer
PaysPays Enrolls
Provides care to
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HIMSS Health Value STEPS Model
Source: HIMSS Resource Center. http://www.himss.org/valuesuite
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Use Case Example
Scenario: Clinical Improvement project
Project Goals: Shift clinical resources from surveillance to interventions, and reduce Catheter-Associated Urinary Tract Infections by XX %
Team: Providers, nursing, patient safety and quality, information systems
Missing results: Financial impact of reduced CAUTIs such as length of stay and improved productivity related to decreased surveillance activities
Team feedback: “Yes, we should consider LOS and productivity gains. However, we don’t track that. I’m sure someone else in the hospital does but we are clinicians.”
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Poll Question #2
Do you currently measure ROI in your Health Care IT improvement projects?
Always
Sometimes
Not usually
No
Unsure
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
The Health Catalyst 4-step ROI Approach
14
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 15
Step 4: Evaluate Costs,Revenue & Direct Benefits
Step 3: Recruit, Train,Plan and Implement
Step 2: Begin to Quantify ROI
Four Step Approach
Step 1: Define the Projectand Business Need
• State proposal• Justify business need
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Project Proposal: Heart Failure Readmission Analytics
Proposal
Expand capabilities of the enterprise data warehouse and purchase an advanced heart failure application with a total cost of $400,000. Focus will be readmission rate.
Business Need
Cardiovascular clinical program is our largest program. Heart failure readmit rate has been climbing over the past three years and is now above the national average at 26%. Due to the readmit rate in 2014, Sample Medical Center received a penalty of 0.4% from CMS.
Sample Proposal
• State the proposal succinctly in one to two sentences
• The business need is a justification for the proposal that ties into the overall organization strategy
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Four Step Approach• Identify all costs
• Estimate benefits
• Identify direct benefits
• Identify indirect or intangible benefits and set improvement targets
• Identify all revenue opportunities
• Document assumptions
• Perform a sensitivity analysis
• Identify risks and alternatives
Step 4: Evaluate Costs,Revenue & Direct Benefits
Step 3: Recruit, Train,Plan and Implement
Step 2: Begin to Quantify ROI
Step 1: Define the Projectand Business Need
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Step Two: Direct Benefit CategoriesGeneral categories –
I. Enhanced efficiency and productivity
• Examples: reductions in FTEs or less overtime; business process improvement; supply chain standardization allowing lower supply costs; increased departmental capacity; and reductions in capital expense
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Customer ExampleEnhanced Efficiency and Productivity
“Our clinicians thought that the EHR would be a silver bullet to get the data they needed for quality improvement and operational reporting and they blamed IT when the information wasn’t forthcoming. …Implementing an EDW should really be an appendix to the implementation of an EHR because the surge of data is just unbelievable and the appetite for it is huge.”
– Myra Davis, M.E., VP of Information Services.
Objective
• Meet the increasing demands by clinicians and operations for EHR data and reports
• Reduce reporting costs and free IT resources to focus on analysis versus report writing
• Reduce turnaround time on remaining EHR report requests
Health Catalyst Solution
• Late-Binding™ Data Warehouse
• Foundational Applications
• Discovery Applications
• Advanced Applications
• Installation Services
• Improvement Services
Results to date
• 67% average savings on labor costs
• Average time to build reports declined from 97 hours to under 30 hours
• 1 EDW report = 10 EHR reports
• 25% faster turnaround on remaining EHR reports
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Step Two: Direct Benefit CategoriesGeneral categories –
I. Enhanced efficiency and productivity
• Examples: reductions in FTEs or less overtime; business process improvement; supply chain standardization allowing lower supply costs; increased departmental capacity; and reductions in capital expense
II. Clinical improvement and waste reduction
• Examples: lowering LOS; reductions in uncompensated hospital readmissions; lower medication cost per case or per capita; fewer ICU days; and patient safety improvements leading to fewer complications or medical errors
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Ordering Waste Workflow Waste Defect Waste
Ordering of tests that are neither diagnostic nor
contributory
Variation in OR room turnover (cycle time) or
Emergency Care wait time
ADEs, transfusion reactions, pressure ulcers, HAIs, VTE,
falls, wrong surgery
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Types of Waste
Variation in OR room turnover (cycle time) or Emergency Care wait times
ADEs, transfusion reactions, pressure ulcers, HAIs, VTE, falls, wrong surgery
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Customer ExampleClinical Improvement
22
Objective
• Define Heart Failure (HF) baseline measures for 30 and 90-day readmissions rates
• Implement evidence-based practice interventions to drive HF readmission rate reductions
• Establish balance metrics including ED visits, observation days and patient satisfaction
• Develop sustaining processes for evaluating readmission rates to ensure continuous process improvement
Health Catalyst Solution
• Late-Binding TM data warehouse that enables faster time-to-value
• Integration of clinical, patient satisfaction and financial data to establish baseline, ongoing and balance measures
• Discovery, Foundational and Advanced HF applications including cohort finder, registry and evidence- based clinical content
• Healthcare analytic visualization including gauges and trend lines for at-a-glance view
Results to date
• Seasonally adjusted rate reduction of 21% in 30-day and 14% in 90-day HF readmissions
• 2X increase in the number of phone calls made to patients within 48 hours of discharge
• Average of 63 % increase in physician medication reconciliation within 48 hours of discharge
• Follow-up appointment intervention baseline and balance measures established
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 23
Customer ExampleOrdering Waste
“We knew we couldn’t completely create predictor models, as science isn’t that refined. But we have reduced the number of chest X-rays to a very respectable level. We have been able to minimize quite a bit of waste in other areas too, so overall, this approach in using the analytics has really helped us to manage our disease processes”.
Dr. Charles Macias, TCH Attending Physician and DirectorEvidence Based Outcome Center.
Objective
• Improve clinical outcome for asthma patients across the care continue
• Better manage populations in a new Valued Based Purchasing environment
• Measure and ensure sustained clinical quality improvements
Health Catalyst Solution
• Late-Binding™ Data Warehouse
• Key Process Analysis (KPA) Application
• Population Analytics Advanced Application- Asthma Module
• Installation Services
• Clinical Improvement Services
Results to date
• Decreased average LOS by 11 hours
• Achieved and sustaineda 49% decrease in unnecessary ChestX-rays over 16 months
• 80% order set utilization …67% sustained increase over 8 months
• 90% usage of asthma action plan by providers
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Step Two: Indirect Benefits and Revenue Opportunities• Can be more difficult to measure
• Longer-term benefits
• Example: an improved medical outcome such as a reduction in future hospitalizations associated with neonatal respiratory distress syndrome (RDS), which will require long-term analysis to reveal an impact on costs
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Customer ExampleIndirect Benefits: Opportunity Cost
Objective
• Define CLABSI and CA-UTI baseline and on-going CLABSI and CA-UTI rate measures
• Implement evidence-based practice interventions to drive CLABSI and CA-UTI rate reductions
• Leverage National Healthcare Safety Network (NHSN) definitions and calculation algorithms
• Shift clinical resources from surveillance and chart abstraction to interventions
Health Catalyst Solution
• Late-Binding TM data warehouse that enables faster time-to-value
• Discovery, Foundational and Advanced ID applications including cohort finder, registry and evidence- based clinical content
• IDEA platform that tracked intervention compliance within days versus months
• Visualization and Gantt charts for clinicians that provide data behind NHSN algorithm results in one consolidated view
Results to date
• Surveillance requirements reduced by 90%
• Increased clinical resources on the floor to drive interventions
• Opportunity costs savings exceeding an estimated $1M in year 1 and $100K annually as a result of not purchasing, maintaining and supporting a one-off measurement and tracking system
• 164% increase in CLABSI maintenance bundle compliance
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Customer ExampleShared Savings
• 75 percent reduction in rate of elective deliveries occurring prior to 39 weeks of gestation in the first six months
• 6-figure bonus payment from payer for exceeding target reduction rate
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Sensitivity and Risk AnalysisExamples
Sensitivity Analysis- modeling various assumptions
• What if we can lower the readmit rate by 20%?
• What if we make two follow-up calls?
• What if we use a nurse for all follow-up calls?
Risk Analysis- describing concerns and tactics
• Physician lead is new in position
• Finance will provide education
• Nurse manager respected in position and can assist in orientation
.
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 28
Health Catalyst Clinical Improvement Financial Tool
• Financial framework to help clinicians work with their finance team member(s) to estimate quantitative and qualitative costs and benefits
• Download the ROI Executive Brief and Tool at:www.healthcatalyst.com/driveroi
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 29
Four Step Approach
• Establish multi-disciplinary outcomes-improvement teams
• Agree on business objectives and an Aim statement
• Agree on ROI measures
• Provide timely executive updates
Step 4: Evaluate Costs,Revenue & Direct Benefits
Step 3: Recruit, Train,Plan and Implement
Step 2: Begin to Quantify ROI
Step 1: Define the Projectand Business Need
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential
Accomplishments Next Steps Issues / Help needed
Cardiovascular: Heart Failure Date: [complete] Overall Status
Risks and Uncertainties
Recruit /Train Kickoff AIM Intervention Rollout plan Results
Month Year Month Year Month Year Month Year Month Year Month/Year
Leadership teamMission, charter, roles confirmed
Review draft cohort and data
Finalize cohort Define rollout plan Review initial results
Content and Analytics Leader
Review AIM optionsData quality issues identified
Identify intervention(s)
Guidance team validation
Implementation plan adjusted
Guidance teamBest practice gathering
Direct observation Direct observationSolicit front-line plan input
Review lessons learned
Workgroup teamProfile prelim. data and cohort
Prioritize, select AIM Solicit front line input Finalize rollout planCreate AIM statement #2
Training workshop 2-3 AIM candidatesAdditional cohort criteria
Analytics dev & testGuidance team validation
Repeat process
Guidance team validation
Guidance team validation
Project Progress
KeyNotstarted
Inprocess
Done well
Someconcerns
Strongconcerns
Sample Long Term AIM Goal
To achieve and sustain a 30% reduction in the 30-day and a 15% reduction in 90-day all cause readmission rates for patients with heart failure by November 2014, and sustained reduction in readmission rates through 2015.
Short Term Project Goal
Define and rollout 30-day and 90-day baseline measures and three process interventions: medication reconciliation; post discharge appointment; and, follow-up phone call by January 1, 2014 - track compliance toward long-term heart failures readmission rate reductions.
Lau
nch
/Ro
llo
ut
dat
e :
XX
Key Success and Financial Measures Target Actuals
Readmission rates: 30-day and 90-day %
Balance measures: ED visits and observation stays #
Intervention compliance rates %
Project costs (e.g., resources, travel, healthcare care analytic apps …) $
Opportunity costs (e.g., not purchasing a Point Solution, no reduction in Medicare reimbursements …) $
Direct benefits: productivity (e.g., previous manual data pulls…); waste reduction (e.g., length of stay….) $
Indirect benefits (e.g., patient satisfaction…) $
Long term project ROI %
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 31
Four Step Approach
• Identify all project costs
• Ensure nothing else has changed
• Perform Financial ROI calculations
• Review ROI calculations with the team
• Make adjustments
• Monitor and ensure sustained results
Step 4: Evaluate Costs,Revenue & Direct Benefits
Step 3: Recruit, Train,Plan and Implement
Step 2: Begin to Quantify ROI
Step 1: Define the Projectand Business Need
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential32 32
© 2013 Health Catalystwww.healthcatalyst.comProprietary and Confidential 33
The Opportunity for ChangeTaking the next step…
• Download the Health Catalyst ROI Executive Brief
www.healthcatalyst.com/driveroi
• Contact us to learn more about our solutions, ROI modeling and communication tools
www.healthcatalyst.com/company/contact-us
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Questions
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