Effective HospitalBased Palliative Care Programs: Staffing Needs and Cost Savings West Virginia Cent

1
Effective Hospital-Based Palliative Care
Programs Staffing Needs and Cost SavingsWest
Virginia Center for End-of-Life CareSeptember
13, 2006

• Lynn Spragens, MBA
• Spragens Associates, LLC
• Durham, NC
• Lynn_at_LSpragens.com
• 919-309-4606
• www.capc.org

2
Objectives

• Provide a framework for demonstrating financial
  impact
• Present examples of program results and emerging
  metrics
• Suggest practical operational and financial
  measures
• Help you all work on program impact goals

3
Comments on WV Center

• Great (!!) statewide involvement
• Thorough data collection by those who report
  very impressive
• Statewide impact re EOL measures
• Legislation COOL
• Concerns
• Penetration, Sustainability, Depth,
• EOL Brand and focus

4
National Perspective Chronically Ill, Aging
Population Is Growing

• The number of people over age 85 will double to
  10 million by the year 2030.
• The 63 of Medicare patients with 2 or more
  chronic conditions account for 95 of Medicare
  spending.
• US Census Bureau, CDC, 2002.

5
NHWG Adapted from work of Canadian Palliative
Care Association F. Ferris, MD
Palliative Care Bridging Restorative and Comfort
Care
Disease Modifying Therapy Curative, or
restorative intent
Life Closure
Death Bereavement
Diagnosis Palliative Care Hospice
6
Needs met by Palliative Care

• Communication re goals of care, plan of care
  patient, family, many specialists, etc.
• Experts in pain and symptom management
• Providing proactive treatment that offers hope
  when prognosis is grim
• TIME, willingness, and expertise

7
(No Transcript)
8
Palliative Care in 2006

• Over 25 of hospitals now have a palliative care
  program
• US News World Report includes palliative care
  in its criteria for Americas Best Hospitals
• Palliative care set to become an official
  sub-specialty of internal medicine in 2007
• Referral rates at established programs are
  growing each year

Billings JA et al J Pall Med. 2001, AHA Survey
2002, Pan CX et al J Pall Med. 2001
9
Indicators of Fast Growth

• Hospitals with palliative care
• In 2000, 632. In 2004, 1102
• of total hospitals, from 15 to 27
• ABHPM certified MDs now 2140
• 60 programs are offering fellowships, vs. 17 in
  2000 -- a 200 increase in 6 yrs.

10
Implications of Growth

• Expected recognition as ABIM specialty by next
  year
• Fellowships
• Grandfathering of ABHPM certification
• Competition for MDs and NPs
• Growing needs for clinical training
• Strengthening of programs vs. solo offerings
• Need to cover different settings, not just
  hospitals

11
Components of the Formal Strategy

• Define the need (Support Study)
• Identify the markets CAPC
• Define the product National Consensus Project
  (www.ncp.org)
• Promote systematic program implementation vs.
  evolution Tech Asst. (www.hsc.wvu.edu
  www.capc.org)
• Create push and pull marketing strategies
• Advisory Board
• JCAHO
• Business case and MEASUREMENT

12
Public Awareness is Growing
13
March 10, 2004
14
Palliative Care IS
Re-defining Your Brand
Palliative Care Is NOT

• Excellent, evidence-based medical treatment
• Vigorous care of pain and symptoms throughout
  illness
• Care that patientswant at the same time as
  efforts to cure or prolong life

• Giving up on a patient
• In place of curative or life-prolonging care
• The same as hospice

15
A Few of Our Learnings

• People are not in the market for a good death
• Providers want to offer something positive to
  patients and families (which delays prognosis
  discussions)
• Lack of time and shared conversations is largest
  contributor to inaction

16
(No Transcript)
17
Where are you NOW?

• Initial assessment
• Started services
• Got busy
• Who are you NOT hearing from?
• What needed services are not yet available?
• Where do you want to go next to help patients?
• Have you made the business case?
• Time to reassess and move ahead wt confidence!!

18
(No Transcript)
19
Ways to Find Gaps

• Patients gt75 with 4 admissions
• Patients with LOS gt 10 or 14 days
• Patients admitted from SNF with multiple
  admissions
• Patients with risk of mortality score of 4
  (retrospective)
• Patients with LOS gt 4 days and who died without
  palliative care
• Other???

20
Mid-Stream Assessment

• Alignment opportunities key initiatives of the
  hospital
• Rapid Response Teams
• 100,000 lives Campaign
• Medication Management
• Transitions
• Geriatric nursing initiatives?
• Plane Tree

21
Political Capital / Budget Control

• Case Management
• Variance days your impact?
• Readmissions?
• Pharmacy
• Home care and Hospice?
• Nursing staffing and satisfaction (CNS model)
• MDs? Hospitalists?

22
Opportunities for Support

• Board of Directors
• Hospice and community agencies
• Payers / Insurance / Pay for Performance
• Philanthropy
• Demonstration Projects
• Billing
• AND COST AVOIDANCE

23
Variables for Direct Support

• Patient volume
• Degree of Impact and Duration of Impact Savings
  per day
• LOS impact (avoided outliers)
• Billing and other revenues
• Cost of services

24
Defining Need Volume is key Variable

• Which patients have unmet needs?
• Where are they?
• How can you get to them?
• When do you get to them?
• What do you do?
• For how long?

25
Volume Two Methods

• Top Down
• Medicare
• of deaths
• wt long stays
• Comparative Data
• 2 7 of patient admissions estimated demand

• Bottom Up
• Patients wt certain DRGs
• Multiple admissions
• With LOS gt xxx
• Admitted from SNF
• Deaths
• Certain locations (MICU)

26
Spragens Volume Estimator
27
Spragens Staffing Rules of Thumb

• For programs of 150 beds and up, REALLY a good
  idea to go with at least 1.5 ftes, 200new
  patients
• Capacity of NP, MD, MSW team with good ad hoc
  team support is 300-400 new patients per year
• Assume (very rough) 700-1000 visits per year per
  MD or NP provider (mix of new and f/u)
• Impact and growth is related to staffing

28
Dilemma Chicken or Egg?

• Adequate Staffing
• To develop and meet
• demand

Adequate Volume to demonstrate savings and
justify the program
29
Methodology recommended

• Use estimates from other programs for the pro
  forma stage
• Use local examples and specific data
• Get buy-in and refinements from your own leaders
  and finance staff
• Measure results, and gradually update the model
  with your own data.
• Check in, and get credit!

30
Baseline Needs Approach

• Weve been working really hard and have taken
  care of 100 patients this year. Without us, their
  costs would be higher, and LOS longer. We need
  100k to fund continuation.
• Where are the savings from this work in the YTD
  actual financial results?
• What will have to happen to find this money?

31
Opportunity Cost Approach

• Weve made a difference without adding staff
  weve seen 100 patients this year, and here are
  the results. Weve saved at least 125,000 for
  the hospital on these patients. Next year, we
  think we could double this impact, if we could
  commit 100,000 to dedicated resources.
• What is different?
• How could this be funded?

32
Cost Avoidance Challenge
If we do this, then the undesirable outcome does
NOT happenHow do we get credit for what DID NOT
happen???
33
Strategy Avoid the Case Management Cycle

• Stage 1 Invest to Change Outcomes
• Stage 2 Get results and maintain
• Stage 3 Baseline budget pressure, What have
  you done for me lately?
• Stage 4 CUTS and gradual erosion of results
• Stage 5Reinvest and begin the cycle again

34
Example of Financial Results

• A hospital wide consult service with 1.5 to 3
  ftes serving a 300 bed hospital might see 300
  -600 patients/year
• Estimated cost savings (direct cost avoidance and
  some value to LOS savings) range from 250,000 to
  750,000 depending on assumptions and
  methods.(200-400/day)
• Professional part B billing may generate another
  65k-120k of revenue, depending on staff and
  model

35
Total Costs
VARIABLE COSTS Costs that vary
directly and proportionately with the volume of
patient services provided. These expenses may
fluctuate day to day and would not be incurred if
no services were used. As shown below,
variable costs have two components.
FIXED COSTS Those costs
that do not vary directly with volume. Over a
specified period these costs would be incurred
regardless of volume. As shown below, fixed
costs have two components.
FIXED INDIRECT Costs that
cannot be specifically traced to an individual
department and do not vary with volume. These
costs are allocated to all departments.
Examples utilities, hospital administration.
VARIABLE DIRECT Costs that can be
traced to a specific product or service. These
costs increase or decrease according to the
volume of services. Examples nursing care,
supplies.
VARIABLE INDIRECT The costs or expenses that
cannot be specifically traced to an individual
patient but which do vary with volume.
Examples social services, medical records.
FIXED DIRECT Costs that can be traced
to or identified with a specific product or
service but that do not vary with volume.
Examples supervisory personnel, equipment.

• The main source of potential savings associated
  with cost avoidance efforts.

Courtesy of Kathleen Kerr, UCSF, 2/1/05
36
Semi-variable cost behavior for Savings and
Revenue
Using averages
Reality Breakpoints
37
Making the Financial CaseCosts Pre Post
Palliative Care Referral
Charts courtesy of J Brian Cassel, PhD, Massey
Cancer Center, Virginia Commonwealth University
Smith et al. J Pal Med 2003
38
(No Transcript)
39
Palliative Care Sources of Direct Cost Savings
(Based on 583 palliative care consult patients
discharged alive. First days and last days of
stays excluded.)
40
Carle Foundation Hospital 190 beds (2 yr old
service, 35 new patients/mo)
41
What does that mean?

• 800/day difference (total cost)
• Estimate 500/day direct cost
• Estimate 300/day direct variable cost
• Average LOS post referral 4 days
• Total patients/yr 350 x 4 days x 300
• 420,000 in cost avoidance savings
  (conservatively, and excluding LOS impact and
  quality impact)

42
Funding Building Blocks

• Cost Avoidance LOS reduction
• Plan of care
• Site of care
• Speed of care
• Appropriateness of care
• Billing revenue (Part B)
• Services, Stipends, Grants, other
• Goodwill and direct subsidy

43
Simple (critical) assumptions

• Volume of new patients
• Frequency of visits
• Estimated savings per day
• Estimated LOS impact
• Value/credit for saved days
• Net revenue collected per billed service

44
Use Dashboards to Help

• Actual results replace estimates
• Helps identify who you do see, and also who you
  do not
• Use internally to set goals
• Use externally for updates and reports

45
Dashboard Volume
46
Penetration of Patients who Die
47
DASHBOARD Time Before, Time After
48
Where are you being called?
49
Summary Points

• It wont happen without a deliberate plan
• The best outcomes come from the relationships,
  not perfect data
• Lack of perfect data creates opportunity
• Consider your role in culture change and skill
  building
• Challenge your own hypothesis re cause and effect