Jeni Williams

Hospitals across the country are seeking the right combination of evidence-based care, resources, technology, and staff to drive enhanced value. Here, three organizations share their innovative approaches for improving quality of care while reducing costs.

At a Glance

Healthcare executives from three leading organizations offer these tips for driving sustainable improvements in value:

  • Focus on fewer initiatives, execute them, make sure that the results are sustainable-then move on.  
  • Ensure that both clinical and operational experts take part in discussions on ways to improve value through care redesign and reengineering of processes throughout the organization.  
  • Zero in on the elimination of adverse events through evidence-based care for quick wins related to quality and cost.  

As baseball teams across the country train for a new season, healthcare organizations are in training for a new system of value-based payment. Much of their efforts center on shifting from a value gap to a value potential, which HFMA president and CEO Richard L. Clarke, DHA, FHFMA, describes as "a state in which improvements in the quality of care outpace the costs of care, where patients are engaged in improving their health, and where purchasers reap the benefits of improvements in value."

But many organizations are struggling with the question of where to focus their resources and efforts in improving the quality and cost of care.

The fact that most healthcare organizations are in the early stages of adopting value-based competencies was corroborated by participants at HFMA's most recent Thought Leadership Retreat, held this past October. An organization's progress toward a value-based business model often depends on its size: In general, larger organizations with greater resources are the most likely to have made significant strides toward developing the competencies needed to succeed under a value-based model, participants said.

"Although there is a lot of talk going on in the industry regarding ways to improve quality and value, these discussions are taking place in silos," Kenneth Fisher, associate vice president and CFO, University of Iowa Healthcare, Iowa City, Iowa, said at the retreat. "We have to come together in these discussions to develop the competencies needed to succeed under a value-based business model."

How can healthcare organizations find their sweet spots in driving sustainable improvements in the quality and cost of care-while making the most of the resources available to them? Here, three innovative healthcare organizations of various size, type, and location share examples of ways they are closing the "value gap" in health care.

Bellin Health: Small IDS Focuses Energy on Improving Value

"If you look at the ability of healthcare organizations to successfully execute their strategies, you'll find that our on-base percentage is not very high," says Pete Knox, executive vice president and chief learning and innovation officer for Bellin Health, a small, integrated delivery system (IDS) in Green Bay, Wis. "We're woefully poor at execution; we fail to implement about 70 percent of our strategies effectively. At Bellin Health, we strongly believe organizations need a business model that will help align their strategies with the actions necessary to improve value."

In 2003, when Bellin Health saw a sizable reduction in total volumes as measured by adjusted patient days while costs escalated (see the exhibit below), the organization intensified its efforts to improve value by enhancing quality of care while reducing costs and driving out waste and inefficiencies throughout the system, says CFO Jim Dietsche.

Exhibit 1


In 2006, Bellin Health developed a process for prioritizing improvement initiatives within the organization. Every 120 days, Bellin's senior leadership team selects a handful of initiatives designed to improve quality of care and efficiency; engage staff, patients, and partners; grow revenue and market share; and drive out waste and inefficiency. Then the system's resources are focused on achieving these goals through initiatives that cascade down through individual service lines and departments throughout the next 120-day period.

"We focus all of our organizational support on making improvements in these select areas throughout that 120-day cycle," Dietsche says. "Every 120 days, we take another look at the targets, using short-term measures and long-range measures to gauge our progress. If the new processes that were implemented are hardwired and we get the results we expected from a project, we determine that the project is complete and move on to a new initiative. If the target for an initiative has not yet been achieved-for instance, if we've experienced good results from the initiative, but the results are not sustainable-that project may undergo another 120-day cycle wherein we can continue to devote organizational energy toward achieving the goals we've set."

Bellin calls its model of aligning and deploying organizational energy toward performance improvement its "high-performance healthcare model." "We need to make tough choices when it comes to performance improvement initiatives. We can't do everything," says Knox, who is also a senior fellow for the Institute for Healthcare Improvement and author of The Business of Health Care.

"Every organization has a limited amount of energy and resources. Generally speaking, organizations today are fortunate if they can dedicate 2 to 3 percent of their capacity toward improvement and innovation. So we have to make decisions: How do we use that 2 to 3 percent of our capacity when we have over-whelming demands coming at us? It's all about execution: making decisions and aligning the organization's capacity with the actions that are needed to achieve our mission and vision and strategy."

The results include the following:

  • Bellin Health's cancer service line is now able to treat patients within three days of diagnosis. (This process had taken three weeks to a month.)
  • The health system has not had an incidence of ventilator-associated pneumonia in three years.
  • The number of serious patient and employee safety events has significantly decreased. (In early January, the organization had gone 268 days without a serious patient safety event.)
  • Bellin Health's bond rating has improved from a BBB to an A status, and has been upgraded twice from 2006 to 2011 by two ratings agencies.

"We've posted tremendous results in terms of reducing cost and improving quality, and our utilization is lower than what is seen nationally," Dietsche says. "And we're receiving national recognition for our efforts."

The ultimate goal of Bellin's high-performance care model is to effect whole system change, rather than incremental change. "To achieve real results, an alignment has to occur within the organization," Knox says. "Our high-performance care model creates a synergy within the organization and the tremendous discipline and rhythm needed to focus our resources to improve and innovate at a faster rate."

Exhibit 2


Avera: Multistate Rural Network Delivers Virtual ED/ICU Care

One common challenge rural hospitals face is limited access to physician specialists: Small towns have difficulty recruiting specialists; the cost of sending specialists to rural locations for regular visits-usually with a nurse or two in tow-adds up quickly; and not all specialists are willing to make the drive.

It's not uncommon for patients in small towns or rural communities to put off receiving more specialized care until their health problems become difficult for them to manage on their own, which is partly why rural Americans are more likely to suffer from chronic health conditions, heart problems, or cancer (O'Toole, M., "Healthcare Access Lagging in Rural U.S.," Reuters, July 27, 2011).

"Rural patients know that if they call an ambulance in the middle of the night, they'll wake up their neighbor who is an EMT, so instead, they get in the car and drive to the nearest hospital, where they arrive unannounced," says Deanna Larson, vice president, quality initiatives and eCare for Avera, based in Sioux Falls, S.D."Some rural areas are lucky to have more than one physician on staff, and sometimes the nurses who are working in hospitals late at night are the youngest on staff. When you're in an area where the next healthcare facility is located 50 to 100 miles away, that puts a lot of pressure on the physician and nurses who are treating traumas, heart attacks, strokes, and other critical conditions without the support of specialists."

In 2002, Avera, a network of hospitals, family care practices, and specialty clinics located in South Dakota, Minnesota, Iowa, and Nebraska, began to address this problem through a telehealth initiative that allowed specialists in intensive care and emergency care to speak with physicians and nurses in rural hospitals at the point of care, providing critical-and sometimes lifesaving-guidance.

"Telehealth allows us to take the medical expertise of emergency department physicians, nurses, and specialists and spread it across geography," Larson says. "It enables faster access to more specialized care and helps in avoiding unnecessary transfers to other medical facilities. When transfers are needed, they are better transfers-patients are taken to the facility where the right specialists are available to treat them, and they've received care that helps prepare them for a transfer and that can aid in achieving better outcomes."

Video consults are supported by special stethoscopes, otoscopes, and examination cameras. A physician and a nurse are able to be accessed by video at all times through the push of a button in an ED room or inpatient room.

Today, Avera's telehealth program includes the ability for rural patients to access specialty consultations via two-way video from their family physician's office, with nearly 5,000 such consults recorded in FY11. A telepharmacy service also provides remote medication order review and approval prior to the patient's first dose.

Since Avera's telehealth program was launched, the organization has reduced length of stay by 25 percent both in its intensive care units (ICUs) and in other hospital units, Larson notes. She also says more than 19,000 ICU transfers have been avoided in the past seven years, resulting in an estimated $30 million in savings to Avera. The avoidance of serious safety events through use of this program also improves quality of care while reducing risk and costs (see the exhibit below).

Exhibit 3


For rural hospitals, the program has resulted in improved documentation, decreased recruitment costs, reduced medication errors, and improved revenue due to their enhanced ability to care for residents in their communities. For payers, the benefits include a reduction in unnecessary transfers to other facilities, decreased incidence of duplicate diagnostic tests, and reduced travel expenses for families of patients. For patients, benefits include improved health outcomes, faster service, and greater access to specialists.

"Thirty percent of patients claim they would not receive services without e-consult. That's a lot of income," Larson says. "We believe telehealth will probably be the next boom in health care, particularly in rural healthcare facilities."

Partners HealthCare: Large Academic Health System Redesigns Care Plans

In October 2010, Partners HealthCare in Boston undertook an ambitious initiative to redesign care plans for five clinical conditions throughout a defined episode of care. The goal: to improve patient outcomes while reducing readmissions and utilization by 10 percent and unit costs by 5 percent.

Partners HealthCare targeted five clinical conditions that were frequently experienced among the health system's Medicare and commercial payer population, and then defined episodes of bundled care related to each of these care targets:

  • Acute myocardial infarction (AMI [heart attack])-from three days prior to admission through 30 days post-discharge
  • Coronary artery bypass graft (CABG) procedure-from 30 days prior to admission to 180 days post-discharge
  • Colon cancer-from biopsy with a positive cancer diagnosis through 30 days post-colectomy
  • Diabetes-for adult, nonpregnant patients with Type 2 diabetes, one year of care management from the date of service of the trigger/index claim (ICD-coded professional claim)
  • Stroke-for ischemic stroke, from hospital arrival to 45 days after arrival; for transient ischemic attack, from first medical presentation to 45 days after arrival

"One of the conditions-diabetes-is a chronic condition. The other target areas are acute illnesses or procedures that involve an inpatient stay; for these conditions, we asked the teams to design a care plan that included care after discharge during the recovery period," says Elizabeth Mort, MD, senior medical director for Partners and vice president, quality and safety for Massachusetts General Hospital.

"We'd worked to improve quality in each of these clinical areas in the past," Mort says. "Our focus had been on achieving process improvements, such as improving door-to-balloon time for patients with myocardial infarction. Now, we've added the challenge of cost reduction and extended our work from the inpatient setting to longer, defined episodes of care. In doing so, our goal is to improve value by enhancing quality of care, reducing adverse events, and pulling waste out of the system. This work was designed to prepare us for care delivery as we move from unfettered fee-for-service payment systems to systems in which providers take more financial risk."

Condition-specific teams of clinicians focused on redesigning care in each of the target areas by developing a new process-of-care map for each area. "For each condition, we gave the teams data related to how much money we were spending on these patients in a year, with the data sorted by area of expense," Mort says. "For example, we used a tool to review our commercial claims data for our diabetes population-which consisted of about 4,000 patients-and looked at how much money was spent on these patients for medications, inpatient care, office visits, diagnostic tests, and more in a single year. For conditions that required a hospital stay, the largest area of expense was inpatient care. For a population of patients with diabetes, the highest area of expense for a yearlong period was related to drugs, by far."

The teams narrowed the patient population for each condition-for example, in the area of diabetes, focusing on adult patients with Type 2 diabetes, and for stroke, focusing on ischemic stroke and transient ischemic attack-and then defined a time period deemed appropriate for managing the condition and the processes of care that should occur during that period. In doing so, the teams also looked at ways to improve value by developing plans that ensured all evidence-based care was delivered to increase the chances of achieving the best clinical outcomes while avoiding adverse events. The teams also identified their metrics for reporting to Partners' senior leadership team. "The metric piece is really important: It gives us some indication of whether the processes being adhered to are resulting in improved value and gives clinicians and managers a tool to guide progress and hold parties accountable for performance," Mort says.

The exhibit below depicts some of the recommendations made by Partners' diabetes care redesign team. For example, the team estimated that by moving 30 percent of diabetes patients from all brand-name medications to generic medications, millions of dollars in pharmacy savings could be achieved. Partners' stroke care redesign team determined that there are significant opportunities to avoid costs related to unnecessary admissions for low-risk patients with transient ischemic attacks. Its AMI team is working toward reducing unwarranted variation in cardiac catheterization lab procedures, echocardiograms, and use of intensive care beds for low-risk patients. The team estimated that readmissions after an AMI could be reduced if Partners' hospitals were to shore up the discharge process by providing closer follow-up with patients, including post-discharge phone calls and a clinician visit within a week after discharge.

Exhibit 4


It's too early to determine the total savings the health system has achieved through this effort, Mort says, but "we've made a lot of progress in just over a year. We're working incredibly hard, and it's exhilarating, but also challenging. We're making good progress in getting decision support embedded in our electronic medical records to remind physicians to use generics when possible, and we've piloted a transient ischemic attack clinic with very promising results. The metrics in our value dashboard are getting the attention of senior managers and clinical leaders across the system, and our payment system has evolved over the past year.

"We're investing in the resources needed to be successful in a population health management world, which will require improved care coordination, registry management, and increased emphasis on working with our high-risk populations to improve value," she says.

Lessons Learned

There are a number of lessons learned that could be applied by other healthcare organizations to drive sustainable improvements in value.

Start small. "Focus on fewer initiatives, execute them, make sure that the results are sustainable, and then move on to the next initiative to improve value," says Dietsche of Bellin Health. "The problem that many organizations face is that they have multiple projects going on at the same time, and at some point, it becomes difficult to determine where to allocate resources. It's better to focus on three or four initiatives related to improving value at a time so that the organization doesn't run into constraints related to IT capabilities, resources, or capital. Focus on a few things, do them very well, and move on to the next project."

Focus on reducing adverse events for significant wins. "You can hit the sweet spot in improving value by making sure you are avoiding adverse events through the implementation of evidence-based care practices," Mort says. "For example, the occurrence of a blood stream infection in the ICU will increase a patient's length of stay and increase the cost of caring for that patient by up to $45,000. When evidence-based protocols are followed to prevent adverse events such as this, patients are healthier and costs are reduced."

Ensure that both clinical and operational experts take part in discussions on ways to improve value through care redesign, reengineering of processes, and more. "It's really important that when you design an initiative such as (care redesign), you have the right disciplines at the table-not just clinical experts, but also operational experts-helping to think about the implementing of plans from the get-go," Mort says. For example, some of the biggest challenges Partners HealthCare has faced in implementing its care redesign initiative have been related to its ability to manage care costs continually across the continuum of care, to manage registry of patients (i.e., to track patients in the target areas and maintain their information within a database), and to ensure availability of accurate data related to cost and utilization. These are instances where involvement from IT and healthcare finance can make a difference in the long-term success of an initiative-and hit home runs related to value.

Jeni Williams is associate managing editor in HFMA's Westchester, Ill., office.


Publication Date: Thursday, March 01, 2012

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