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Introducing Quality as A Business Model

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Title: Introducing Quality as A Business Model


1
Introducing Quality as A Business Model
Updated 3-23-06
2
Get With The GuidelinesIntroducing Quality as a
Business Model
  • C SUITE / EXECUTIVE PRESENTER
  • Title and Credentials

3
Program Disclosure Information
GWTG-CAD is sponsored by an unrestricted
educational grant from Merck Co. Incorporated
and Merck/Schering-Plough Pharmaceutical
Partnership
GWTG-HF is sponsored by an unrestricted
educational grant from GlaxoSmithKline
4
Meeting Objectives
  • Clinical Case for Support and an Introduction of
    Get With The Guidelines (GWTG)
  • Definition
  • Education
  • Leadership
  • Illustrate Business Case for ABC Hospital and A
    Hospital Success Story
  • Potential Benefit Analysis
  • Value Propositions of GWTG for ABC Hospital
  • Where the numbers come from
  • Definition and discussion of clinical strings
  • What they mean to your organization
  • Decision Go/No-Go
  • Summation

5
The Clinical Case for Support A foundation in
best evidence
  • PHYSICIAN / CLINICAL PRESENTER
  • Title and Credentials

6
Get With The Guidelines
  • Scope of the problem
  • Why is the American Heart Association interested?
  • What is GWTG?
  • How do hospitals benefit from GWTG?

7
A Public Health Crisis 60 Million Americans
Have CVD
  • High blood pressure 50 million
  • Coronary heart disease 12.2 million
  • Acute myocardial infarction 7.2 million
  • Angina pectoris 6.3 million
  • Stroke 4.4 million
  • CHF 4.6 million
  • Note individuals may have more than one type of
    CVD

Morbidity Mortality 2000 Chart Book on
Cardiovascular, Lung, and Blood Diseases. NHLBI.
May 2000.
8
USA- Annual Toll Of Cardiovascular Disease
  • Acute MI 1,100,000 first 450,000 recurrent
  • Acute MI 450,000 deaths
  • Stroke 500,000 first 100,000 recurrent
  • Stroke 160,000 deaths
  • Every 33 seconds someone dies from cardiovascular
    disease

Includes Acute MI plus CHD deaths Morbidity
Mortality 2000 Chart Book on Cardiovascular,
Lung, and Blood Diseases. NHLBI. May 2000.
9
Healthcare Quality Defect Rates
Breast cancer screening (6569)
Outpatient ABX for colds
Nosocomial infections
Hospitalized patients injured through negligence
Post-MI ?-blockers
Airline baggage handling
Detection treatment of depression
Defects per Million
Adverse drug events
Anesthesia-related fatality rate
U.S. Industry Best-in-Class
1 (69)
2 (31)
3 (7)
4 (.6)
5 (.002)
6 (.00003)
? level ( defects)
Slide created by Barnes Jewish Hospital
10
American Heart Associations Strategic Impact Goal
  • Reduce death, disability and the risk of coronary
  • heart disease and stroke by 25 percent by 2010

11
Get With The GuidelinesSM (GWTG) is the American
Heart Associations suite of award winning,
comprehensive programs which improve acute and
preventive care for patients hospitalized with
cardiovascular disease.
  • Currently 3 modules available
  • Coronary artery disease (CAD)
  • Stroke
  • Heart failure (HF)

12
What Is GWTG?
  • The integration and translation of
  • Evidence-based medicine (EBM)
  • Technological based, decision support, data
    collection and feedback approach introduced at
    the point of care
  • A defined, yet flexible, process to integrate
    systematic change management within your hospital
    to create a highly effective and efficient care
    delivery model
  • Mechanisms to continuously improve and measure
    quality
  • GWTG can change the culture in a hospital to a
    culture of quality and excellence. This pursuit
    of clinical excellence holds significant value to
    hospitals

13
ADHERE Variation in ACEI Use
ORYX Core Measure HF 3 LVEF lt40 Prescribed
ACEI at Discharge
100
80
60
Rate ()
40
20
0
ADHERE Hospitals
ADHERE Dec 2002, 206 Hospitals 23,193 patients
(subset with LVEF ?.40, no CI). Fonarow, GC. J
Card Fail. 20039S79. Fonarow GC, et al. Arch
Intern Med. 2005. 1651469-1477.
14
FutureScan
  • Even small Healthcare institutions are
    complex, barely manageable places large
    healthcare institutions may be the most complex
    organizations in human history.
  • Peter Drucker

15
Bridging the Gap Leadership Culture, and Systems
EFFICACY
EFFECTIVENESS
  • Outcomes associated with an intervention under
    ideal circumstances
  • Clinical trial reported in literature
  • Guidelines
  • Outcomes associated with an intervention in the
    real world
  • Hospital
  • Outpatient
  • Across Continuum

16
GWTG Program Components
  • Collaborative model
  • Patient Management Tool
  • National/regional support structure
  • Hospital recognition and incentives
  • Peer-reviewed abstracts and publications

LaBresh, KA and Tyler, PA. Quality Management in
Health Care,2003,12(1),1
17
GWTG Summary
  • Focus on
  • Leadership
  • Culture
  • Its personal
  • Passionate pursuit of perfection
  • Systems
  • Helps hospitals build a system that is
  • Flexible
  • Redundant
  • Efficient
  • Sustainable
  • Rapidly modifiable
  • Provides concurrent reminders and alerts

18
National GWTG participation (as of February 10,
2006 )
How Are We Doing?
19
GWTG-CAD Program Results Baseline through 12 Qtrs
20
NRMI Hospitals Lipid Management Adherence levels
by Quarter Compared to GWTG Measurement is not
enough
GWTG Pilot Last Quarter
Q8 post-baseline in AMI only Pts. is 84
GWTG Pilot Start
  
10//2000-9/2001 97,405 AMI patients discharged
from 1552 US Centers 01/2001-12/2001 96,625 AMI
patients discharged from 1552 US
Centers 01/2002-12/2002 85,942 AMI patients
discharged from 1423 US Centers
21
(No Transcript)
22
Local Hospital Data
  • Placeholder for local market hospital data

23
What is GWTG and what can it do for you? A
hospital success story
  • C SUITE / EXECUTIVE PRESENTER
  • Title and Credentials

24
Items to Consider
  • How well are you positioned for
    pay-for-performance?
  • How do your clinical outcomes stack up against
    your competition?
  • What priority have you given to quality
    improvement and overall patient safety effort?
  • What initiatives do you have in place to improve
    your clinical outcomes?
  • How engaged is your medical staff in the quality
    improvement effort, and is your quality
    initiative led by a member of the medical staff?
  • Are you proud of your outcomes?
  • Are you currently active with your payers in a
    P4Q initiative?

25
Items to Consider
  • What is the trend in your financial performance
    as it pertains to quality?
  • How aware is your executive team or the board of
    directors of the potential impact of
    pay-for-performance?
  • How aware are other key stakeholder groups like
    employers and community and media
    representatives of your quality improvement
    initiatives?

Source http//www.healthleaders.com/news/feature1
.php?contentid71138referring_friend180643
26
Cost v. Benefit in GWTG for ABC Hospital
Figured at 900.00 per module, 3 modules
included
Figured at 1 FTE _at_ 75,000 per year
27
The way you get quality is to define a set of
processes and procedures and make sure they are
implemented everywhere
Larry Ellison CEO, Oracle
28
C-Suite and Physicians Achieving Common Goals
  • GWTG can assist in the following
  • Compliance with evidence-based medicine and
    proven guidelines
  • Patient safety/patient outcomes
  • Positioning for true Pay-for-Quality environment
  • National/regional recognition and market
    leadership
  • Increased market share/public reporting
  • Reduced operational variability in treatment and
    improved operational efficiencies
  • Clinical Strings
  • The link between improved patient results
    (quality outcomes) and improved financial
    performance

29
Mortality Rates
Patients treated at one-star hospitals face
significantly greater mortality risk Observed
mortality rates at five-and one-star hospitals,
2002-2004
30
Many Happy Returns
In recent years, health plans and employers have
increased the number of disease management
programs to improve employees health and save
cash that would have otherwise been spent on
episodic treatment. A review of 24 studies
investigating the financial impact and return on
investment of asthma and congestive heart failure
disease management programs indicates that these
programs achieved a positive ROI by saving more
dollars than they cost. Source HealthLeaders
Fact File, August 2005
4,000
3,500
3,000
2,500
Cost
2,000
Savings
1,500
1,000
500
Asthma
Congestive Heart Failure
SOURCE Medstat
31
Your Brutal Facts of Reality
  • There exists a well-documented treatment gap in
    CVD, and poor compliance with EBM demonstrated to
    reduce mortality and recurrent hospitalizations
  • Payers (CMS and commercial) are increasingly
    focused on quality, operational effectiveness
    which will affect the fiscal health of your
    hospital
  • Cardiac and stroke patients often represent the
    majority of your patients and the basis of your
    hospitals ranking and bottom line
  • the rationale for GWTG implementation

32
With the changing health care culture, average
quality performance is NOT acceptable in a
climate of quality reporting.
e.g., HealthGrades.com, Physician Report
Carding, CMS Hospital Public Reporting (release
date in 2004), US News Americas Best
Hospitals, health plans Centers of Excellence,
state Departments of Health
33
The Future of P4P is NOW Are you prepared?
34
What is Driving P4P/P4Q?
  • Policymakers and payers are increasingly
    concerned that the U.S. pays more for health care

Source OECD Health Data 2005.
35
What is Driving P4P/P4Q?
  • Yet the U.S. achieves poorer results, compared
    to other major, developed countries.

Source OECD Health Data 2005.
36
CMS Pay-for-Quality Initiatives
  • Hospital Quality Initiative (MMA section 501b)
  • Part of HHSs broader National Quality Initiative
  • Focuses on an initial set of 10 quality measures
    by linking reporting of those measures to the
    payments the hospitals receive for each discharge
  • Hospitals that submit the required data receive
    the full payment update to their Medicare DRG
    payments
  • Nearly all (93.3) of the hospitals eligible to
    participate in this program are reporting

http//www.cms.hhs.gov
37
CMS Pay-for-Quality Initiatives
  • Medicare providers would be rewarded for meeting
    QI goals or improving patient care
  • Strong performers rewarded with pool of funds
    totaling 1-2 of total program payments, with
    funds COMING FROM poor performers

38
Top 5 Reasons For ABC Hospital to be Involved
with GWTG
  • Improvements in quality and outcomes
  • Meets JCAHO and CMS core measures
  • Potential to enhance revenue and reduce costs
  • Creates quality driven data to position yourself
    among payer communities
  • Aids with contract negotiations with commercial
    insurers
  • Improve operational efficiency leading to lower
    cost reduced operational variability
  • Helps decrease costly short-term readmission and
    LOS
  • Improves continuity of care between departments
    and staff resource efficiency
  • CQI GWTG community collaboration and
    communication with other hospitals throughout the
    country on best practices
  • AHA Recognition Program
  • PR and marketing opportunities

39
Financial Value Propositions associated with
GWTG implementation
  • C SUITE / EXECUTIVE PRESENTER
  • Title and Credentials

40
Clinical Strings
The direct link between quality outcomes and
improved financial performance.
41
Value Propositions
  • Financial Indicators
  • Operating Margin
  • Contribution Margin
  • Quality Indicators
  • Patient Satisfaction
  • Mortality Rates
  • Rehospitalization within 72 Hours
  • Operational Indicators
  • Average Length of Stay
  • Cost per Discharge
  • FTEs per Occupied Bed

42
Qualitative Quantitative Value Props
  • 3 Key Qualitative Value Propositions
  • Recruitment of Key Sub-Specialties
  • Alignment with Physicians Positions Hospital
  • Overall Community Benefit Healthier Community
  • 3 Key Quantitative Value Propositions
  • Bond Rating Financial Indicators
  • Pay For Quality (P4Q) Quality Outcomes,
    Increased Reimbursement
  • Operating Efficiencies Must be Sustainable

43
Category Description
  • Category 250 Beds
  • Guidelines
  • GWTG CAD DRGs 132 133
  • GWTG HF DRG 127
  • GWTG Stroke DRGs 14, 15, 524
  • 3 Hospitals
  • Non-participating 1 Currently not participating
    with GWTG
  • Non-participating 2 Currently not participating
    with GWTG
  • Participating Currently With the Guidelines

44
Parameters/Assumptions
  • Volume and ALOS based on each respective
    hospitals actual, 2003 Medpar data (Solucient).
  • All other data (Revenue and Expenses) are
    calculated using the assumptions on the following
    pages.

45
Parameters/Assumptions
  • Assumption 1 Revenue
  • Most recent case weights were used.
  • Revenue calculated based on an average Medicare
    rate of 4,600 per discharge, other payers based
    upon the following mix

46
Parameters/Assumptions
  • Assumption 2 - Expenses
  • Average cost per day (used in ALOS calculations)
    was set at a conservative 1,200 per day.
  • Expenses figured as follows (as a percent of
    revenue)

47
Actual Volume for each Hospital
Volume
DRG
48
Calculated Cardiac and Stroke Baseline Net Income
for each Hospital
Income
49
Clinical String Increased Volume
  • Link between quality outcomes (patient
    satisfaction) and improved financial performance.

Higher Volume Increased Margins
Increased Market Share
HigherQuality
50
changing market dynamics for hospitals
Quality-based shifts in volume are projected to
have a significant impact on hospitals
  • ...because the Quality-Conscious Consumer
  • has a high willingness to ask physicians to send
    them to preferred hospital, and
  • their hospital preference is likely to be swayed
    by the availability of specialized service
    centers.

Percentage of the Adult Population That Would
Change Physicians if Preferred Physician Below
Average
Percentage of the Adult Population That Would
Change Hospital if Preferred Hospital Below
Average
28
58
  • The resulting competitive advantage will grow as
  • Profitable elective procedures are steered more
    easily than emergent volumes, and
  • Funds earned through P4P incentives/rewards can
    be focused on additional IT infrastructure
  • Results of South Central cardiac pilot with XYZ
    insurance validate this
  • South Central cardiac programs participating in
    XYZs pilot program realized a 22 volume
    increase whereas those not participating realized
    a 4 volume loss.

51
Volume Opportunities Financial Impact of 10
Volume Increase for each Non-participating
Hospital
10Increase
10Increase
Non-participating 2
Non-participating 1
Assumes that each facility has the capacity to
add 10 volume increase. Therefore, in
calculating additional income, Capital expenses
of 20 were not taken into account for the
additional volume.
52
Clinical String- Reduced ALOS
  • Link between quality outcomes (quality means that
    a better and standardized process of care often
    leads to shorter average length of stay) and
    improved financial performance.

Decreased Cost per Discharge Increased Margins
Reduced Daily Expense
Reduced ALOS
53
Average Length of Stay per Hospital vs.
Benchmark for DRGs 127 132
DRG 132
DRG 127
Source Solucient Percentiles for All US
Hospitals
54
Average Length of Stay per Hospital vs.
Benchmark for DRGs 14, 15, and 524
DRG 14
DRG 15
DRG 524
DRG 524 is a newer DRG and does not have
benchmarked performance
Source Solucient, Percentiles for All US
Hospitals
55
ALOS Efficiency Opportunity Potential
Non-participating Sites Income
Increased Income
Assumes that additional patient volume is
available to keep average daily census at
capacity.
56
Clinical String- Improved Reimbursement
(Pay-for-Quality)
  • Clinical String Link between quality outcomes
    (patient satisfaction, reduced mortality and
    rehospitalization) and improved financial
    performance.

Quality Outcomes Operating Efficiencies
Financial Incentives
Increased
57
Pay for Quality Opportunities
Yellow denotes a 10 volume increase in
Commercial, Managed Care and Other Payers
Increased Income
Commercial Volume
Orange denotes a 10 BONUS in Commercial, Managed
Care and Other Payers reimbursement
Commercial Bonus
Commercial Volume
Red denotes a 2 BONUS in Medicare reimbursement
Commercial Bonus
Medicare
Pay for Quality based on cardiac DRGs only.
Medicare
58
Collective Results of All 3 Clinical Strings
Potential increase in net income if GWTG
improvement effects are realized by
non-participating sites.
Increased Income
Volume
Pay for Quality
Volume
Pay for Quality
ALOS
ALOS
59
Cost v. Benefit in GWTG for ABC Hospital
Figured at 900.00 per module, 3 modules
included
Figured at 1 FTE _at_ 75,000 per year
60
This presentation prepared in collaboration with
PricewaterhouseCoopers. The American Heart
Association and PricewaterhouseCoopers accept no
liability or responsibility to any Third Party
who benefits from or uses the Services or gains
access to the deliverable. While we will be
prepared to discuss drafts of our deliverable,
the content of our final deliverable is a
collaborative effort between the Client and
PricewaterhouseCoopers. PricewaterhouseCoopers
reserves the right to author the deliverable in a
manner it, with understanding of the Client,
finds appropriate.
61
Get With The GuidelinesYOUR STRATEGY
  • C SUITE / EXECUTIVE PRESENTER
  • Title and Credentials

62
Over 1,000 Hospitals have decided to Get With the
Guidelines
AK
1
1
1
8
WA
NH
2
ME
7
1
VT
8
ND
MT
1
MN
1
20
4
OR
MA
4
8
16
43
ID
SD
2
14
WI
19
7
2
NY
2
RI
MI
14
2
WY
2
CT
2
16
2
25
PA
1
3
NY
39
14
7
IA
4
OH
27
8
17
4
NJ
NE
NV
5
11
2
CA
34
6
WV
IN
DE
4
18
2
UT
18
13
2
VA
CO
IL
MO
MD
5
1
3
10
KY
18
2
9
14
24
KS
54
19
3
5
25
6
D.C.
2
9
NC
6
TN
17
31
5
12
4
OK
3
4
AR
SC
NM
AZ
6
2
GA
AL
2
9
1
12
17
26
13
MS
12
LA
1
85
15
TX
FL
6
24
7
14
39
60
Legend CAD contracts signed 583
Stroke contract signed 533
63
Implementation
64
AHA Support and Resources
65
GWTG as a Culture
GWTG is about improved communication and
developing better processes. Be sure to include
all staff positions both directly and indirectly
involved in these patient care. Examples of
these positions are
  • Discharge Planners
  • Patient Education
  • Case Managers
  • Nurse Practitioners
  • Cardiac Rehab Staff
  • Administrators
  • Physicians
  • Nurses
  • Cardiology/Neurology Unit
    Coordinators
  • QI Staff
  • Pharmacists

66
Call to Action
  • As detailed by Institute of Medicine (IOM)
  • not treating patients consistent with well
    accepted evidence based guidelines represents an
    error of omission. that not giving standard
    critical therapies and interventions is, indeed,
    a safety issue.
  • Based upon clinical outcomes, operating
    efficiencies, and the move toward
    pay-for-quality, can YOU afford to not
  • Get With The Guidelines?

67
QA
68
  • Thank you
  • for lending your expertise and resources to
    ensure the success of this life-saving program!

69
Introducing Quality as A Business Model
70
Appendix
71
Hospital Baseline Information
72
Volume Opportunities Incremental Summary
73
ALOS Opportunities
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