Introducing Quality as A Business Model

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Introducing Quality as A Business Model
Updated 3-23-06
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Get With The GuidelinesIntroducing Quality as a
Business Model

• C SUITE / EXECUTIVE PRESENTER
• Title and Credentials

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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
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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

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The Clinical Case for Support A foundation in
best evidence

• PHYSICIAN / CLINICAL PRESENTER
• Title and Credentials

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Get With The Guidelines

• Scope of the problem
• Why is the American Heart Association interested?
  
• What is GWTG?
• How do hospitals benefit from GWTG?

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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.
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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.
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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
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American Heart Associations Strategic Impact Goal

• Reduce death, disability and the risk of coronary
• heart disease and stroke by 25 percent by 2010

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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)

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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

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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.
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FutureScan

• Even small Healthcare institutions are
  complex, barely manageable places large
  healthcare institutions may be the most complex
  organizations in human history.
• Peter Drucker

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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

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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
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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

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National GWTG participation (as of February 10,
2006 )
How Are We Doing?
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GWTG-CAD Program Results Baseline through 12 Qtrs
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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
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(No Transcript)
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Local Hospital Data

• Placeholder for local market hospital data

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What is GWTG and what can it do for you? A
hospital success story

• C SUITE / EXECUTIVE PRESENTER
• Title and Credentials

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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?

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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
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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
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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
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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

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Mortality Rates
Patients treated at one-star hospitals face
significantly greater mortality risk Observed
mortality rates at five-and one-star hospitals,
2002-2004
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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
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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

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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
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The Future of P4P is NOW Are you prepared?
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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.
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What is Driving P4P/P4Q?

• Yet the U.S. achieves poorer results, compared
  to other major, developed countries.

Source OECD Health Data 2005.
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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
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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

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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

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Financial Value Propositions associated with
GWTG implementation

• C SUITE / EXECUTIVE PRESENTER
• Title and Credentials

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Clinical Strings
The direct link between quality outcomes and
improved financial performance.
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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

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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

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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

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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.

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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

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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)

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Actual Volume for each Hospital
Volume
DRG
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Calculated Cardiac and Stroke Baseline Net Income
for each Hospital
Income
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Clinical String Increased Volume

• Link between quality outcomes (patient
  satisfaction) and improved financial performance.

Higher Volume Increased Margins
Increased Market Share
HigherQuality
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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
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• 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.

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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.
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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
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Average Length of Stay per Hospital vs.
Benchmark for DRGs 127 132
DRG 132
DRG 127
Source Solucient Percentiles for All US
Hospitals
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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
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ALOS Efficiency Opportunity Potential
Non-participating Sites Income
Increased Income
Assumes that additional patient volume is
available to keep average daily census at
capacity.
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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
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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
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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
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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
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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.
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Get With The GuidelinesYOUR STRATEGY

• C SUITE / EXECUTIVE PRESENTER
• Title and Credentials

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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
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Legend CAD contracts signed 583
Stroke contract signed 533
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Implementation
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AHA Support and Resources
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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

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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?

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

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Introducing Quality as A Business Model
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Appendix
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Hospital Baseline Information
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Volume Opportunities Incremental Summary
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ALOS Opportunities