Ensuring Your Surgical Service Line is Successful in an ... · Ensuring Your Surgical Service Line is Successful in an ACO Value-Based Purchasing and Bundled Payment Environment Jeffry

Ensuring Your Surgical Service Line is

Successful in an ACO Value-Based

Purchasing and Bundled Payment

Environment

Jeffry Peters,President

Surgical Directions, LLC

Joseph Bosco, MDAssociate Professor; Service

Chief at NYUHC; Vice Chair for

Clinical Affairs Department of

Orthopaedic Surgery

Surgical Directions LLC ©2013 2Surgical Directions LLC ©2013 2

Perioperative Performance

• Perioperative performance is still the driver of

hospital performance

• 65% of hospital margin


Payment Transformation

1% – 2% 1% – 3%2%

3%

1%

Percentages indicating Hospital Inpatient Medicare

Payments at Risk

Sources:

1) http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/hospital-value-based-purchasing/

2) http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Readmissions-Reduction-

Program.html


Payment Transformation

1% – 2%

Patient

Experience

30%Clinical

Process

of Care

70%

Weighted Value of Each

Domain


Key to Succeed

• During times of change, under

the Accountable Care Act, focus

on:

– Quality

– Cost

• Prerequisites to succeed:

– New organization models for

physicians and aligned

incentives

– Collaborative Governance

– Education & Information

– Progressive efforts to drive

efficiency; case time, labor &

non-labor costs


Advocate Health

Pioneer in ACO Delivery System

• Goals

– Focus on care coordination

– Prevention

– Early detection

– Education

• Advocate Healthcare

– 10 hospitals

• 250,00 PPO Members

• 125,000 HMO


Incentives Designed to Drive

Performance

Group

Primary Care

Specialist

Individual

Anesthesiologist

Surgeon

Anesthesiologist

Hospital Days/1,000 Flu Shot SCIP

Controlled hypertension Generic Prescriptions for

>25 Rx

Pre-Surgical prophylactic

antibiotic administration &

selection

30 day readmission Clinical integration

education

Potentially avoidable

admission

•Retained object

•Wrong site

•Post-op infection

CV patients with controlled

post-operative glucose

ER visits Periop temperature

management

Patient satisfaction DVT prophylaxis

Surgery patients on Beta

Blockers prior to surgery

Patient satisfaction


Results

• Better clinical outcomes

– Readmission

– SSI

– DVT

– Cardiac events

• Lower cost

– LOS

• Saving Payor/employers money for quality care


Best Performing Cost and Clinical

Outcomes

• Favorable rates for hospital

• Higher reimbursement for surgeons utilizing

Advocate Hospital who meet quality criteria

• Most importantly, provides the system with a

sustainable competitive advantage


Surgical Homes

• Surgical homes are being used by leading systems to

improve clinical outcomes, reduce costs, and

enhance surgical patient experience.

• Multi-disciplinary teams – anesthesia

hospitalists

case management

Pre-Surgical Optimization

Surgery PACU / ICUPost

SurgeryDischarge


Case Study:Advocate South Suburban Hospital

Hospitals within Advocate reorganizing the manner in which they run their ORs

Situation

Clinical issues

Poor image among consumers

Hospital underperforming

Dependence on medical admissions

Operational issues

Weak management

Lack of physician partnership

PAT weak


Competition Within 10 Minutes


Case Study:Perioperative Transformation

• New anesthesia group

• New Collaborative Governance

• New OR Director

• Revised block time and rules

• Implemented management/physician dashboard

reports


Case Study:Anesthesia

• Hospital looking to anesthesia to drive Perioperative

performance

– Effective Medical Director

– Incentives aligned

– Stipend based on specific service standards

– Available effective regional blocks

– PAT

• Protocol driven

– Ability to accommodate add-ons

– Participate in Daily Huddle

– On-time starts

– Quick procedural turnover time

– Just Culture

– Adopt 10 points of Safer Surgery


Case Study:New Anesthesia Group

Previous Current

Service Orientation

Compensation

Clinical Skills

Service/Collaborative


Collaborative Governance: SSEC

Drives Cultural Change

Surgical Services Executive Committee (SSEC)

Surgical

Leadership

OR Nursing

LeadershipAnesthesia

Leadership

Sr. Hospital

Leadership

Chaired by Medical Director(s) of Perioperative Services

Administration-Sponsored Surgery BOD

Controls access and operations of OR

Sponsors and directs team activity


Daily Huddle

Participants

OR Director, Anesthesia, PAT,

Central Sterile Supply,

Scheduling

Task

Review Schedule for next 72 hours

Patient Risk Factors

Equipment

Sequence of Patients

Staff Assignment

Outcome

Minimize Cancellations

Improve On-Time Starts

Improve Clinical Outcomes


Case Study:

Existing Capacity Exceeds Demand

5,551

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Suburban Hospital

SurgicalCases for2009

Benchmark for 7

ORS

( 8,400 Cases )Benchmark for 6

ORS

( 7,200 Cases )Benchmark for 5

ORS

( 6,000 Cases )

NOTE: Based upon case mix and IP:OP ratio, Surgical Directions projects optimal OR utilization at:1,215 cases per OR (37% IP/63% OP)


Sample Hospital:

Percentage of Rooms Running

0

1

2

3

4

5

6

7

Nu

mb

er

of

Loca

tio

ns

O.R

, O.B

, & O

ut

of

O.R

Hour

Average Anesthetizing Locations

At a cost of $20 an minute, hospitals need to balance

capacity with demand


Case Study:

Block Time Utilization Analysis

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Aribindi Chang GYN Hall John Kardasis Kumar Meghpara O'Donnell Patel Weber

Average Block Utilization by Surgeon

Recent 3 Mo Recent 6 Mo

3 month avg

65% target

Utilization


Case Study:

Full or Partial Day Blocks

Full Day Block Partial Day Block

Hospital Revenue

Anesthesia

Revenue

Nursing Costs

Per OR Minute

Case Volume

Payor Mix

Profit Per Case


Case Study:

Block Time Ratings

Metric Benchmark- Now Suburban- Was

Length8 hour + Variable

Utilization to maintain75% Not measured

Release time Variable by specialty 24 hour

Open rooms20% 0


Anesthesia Leading System-wide

• Anesthesia leading system-wide initiative to improve

outcomes and reduce cost

Initiative Impact

PAT

Manage co-morbities

Diabetes

Cardiac

BMI

PAT

Reduce Admissions to ICU

Reduce LOS

Reduce SI, DVTs, and

Cardiac events

Daily Huddle Reduce cancellations

Reduce First Case Delays


Pre-Admission Testing

• Medical Director

• Telephone questionnaire

• Risk assessment to identify patients needing to be

seen

• Testing protocols

• Protocols to manage co morbidity


Non-Labor Costs

• Non-Labor costs 60% of OR budget

Best Practice Norm

– Inventory turns 10-12 2

• PAR levels

– Returned items from case costs 10% or less 30

– High dollar implants


Reduction of PAR Levels

Why had inventory gotten so

high?– Items stored in multiple locations

– No PAR values set

– No visual as to when to reorder

– No guidance on how much or when to

order

– Goal 10-12 turns per year


Artificial Hip*

• US National Pricing $4,500 - $7,500

• Belgium Hip $3,180

• Cost Manufactory Implant $ 350

*New York Times August 7, 2013


Case Study:Outcome

• Most improved hospital in the 13 hospital system

• Increased surgeon satisfaction

• Anesthesia income increased by over 25%


Case Study:Performance Outcomes

Indicators Improvements

Impact on Market Share 3%

Impact on Surgical Volume 22%

Impact on Net Income $8 million

L.O.S. Decrease 11%


Successful Hospitals are Learning to

Navigate Bundled Payments

• What is a bundled payment?

– A government experiment select procedures

• Joint

• CU surgery

– How are the fees established?

• Health care providers (physicians and hospitals)

– What are the challenges?

• Negotiation of how the revenue is allocated between physicians and the

hospital

• Managing the costs while ensuring patient outcomes and national

quality outcomes

– Why is this important?

• The federal government and payers are pushing for bundled payments

• Hospital needs to develop the skills to succeed under this system as a

world class health system


Bundled Payment

• While most hospitals have focused on a navigational

model and length of stay, better performing

organizations are diving deeper and focusing on all

OR processes and information.


Task Forces

• Physician and perioperative staff lead taskforce to

drive change

– SSEC

– Block

– PAT

– Case time

– Efficiency


• Surgeon report cards are produced monthly to

increase organizational and surgeon awareness of

key benchmarks and how surgeons compare


Surgeon Dashboard


Case Time Data

Driving Organizational Change

• Patient In

• Anesthesia ready

• Cut

• Close

• Patient out


Reduce Case Time

• Institution-wide initiative to reduce case time

– Surgeon in room immediately available when patient is in

room

– PA for complex procedures with significant technology set up

– Reduction of items or preference cards

– Turnover teams

– Information


What Do You Need to Do Now To

Prepare

• Appoint collaborative leadership for Perioperative

Service

– Huddle

– WHO Check List

• Generate information to measure performance

• Optimize outcomes

• Give mandate to reduce costs to ensure profit at

Medicare reimbursement


For questions or comments, please contact:

Surgical Directions LLC

541 N. Fairbanks Court

Suite 2740

Chicago, IL 60611

T 312.870.5600 F 312.870.5601

www.surgicaldirections.com

Documents

Ensuring Your Surgical Service Line is Successful in an ... · Ensuring Your Surgical Service Line is Successful in an ACO Value-Based Purchasing and Bundled Payment Environment Jeffry