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

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1 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, MD Associate Professor; Service Chief at NYUHC; Vice Chair for Clinical Affairs Department of Orthopaedic Surgery

2 Perioperative Performance Perioperative performance is still the driver of hospital performance 65% of hospital margin Surgical Directions LLC

3 Payment Transformation 3% 1% 2% 1% 3% 2% 1% Percentages indicating Hospital Inpatient Medicare Payments at Risk Sources: 1) 2) Program.html Surgical Directions LLC

4 Payment Transformation 1% 2% Clinical Process of Care 70% Patient Experience 30% Weighted Value of Each Domain Surgical Directions LLC

5 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 Surgical Directions LLC

6 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 Surgical Directions LLC

7 Incentives Designed to Drive Performance Group Primary Care Specialist Individual Anesthesiologist Hospital Days/1,000 Flu Shot SCIP Controlled hypertension Generic Prescriptions for >25 Rx 30 day readmission Clinical integration education Potentially avoidable admission Retained object Wrong site Post-op infection ER visits Patient satisfaction Surgeon Anesthesiologist Pre-Surgical prophylactic antibiotic administration & selection CV patients with controlled post-operative glucose Periop temperature management DVT prophylaxis Surgery patients on Beta Blockers prior to surgery Patient satisfaction Surgical Directions LLC

8 Results Better clinical outcomes Readmission SSI DVT Cardiac events Lower cost LOS Saving Payor/employers money for quality care Surgical Directions LLC

9 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 Directions LLC

10 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 / ICU Post Surgery Discharge Surgical Directions LLC

11 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 Surgical Directions LLC

12 Competition Within 10 Minutes Surgical Directions LLC

13 Case Study: Perioperative Transformation New anesthesia group New Collaborative Governance New OR Director Revised block time and rules Implemented management/physician dashboard reports Surgical Directions LLC

14 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 Surgical Directions LLC

15 Case Study: New Anesthesia Group Previous Current Service Orientation Compensation Clinical Skills Service/Collaborative Surgical Directions LLC

16 Collaborative Governance: SSEC Drives Cultural Change Surgical Leadership OR Nursing Leadership Anesthesia Leadership Sr. Hospital Leadership Surgical Services Executive Committee (SSEC) Chaired by Medical Director(s) of Perioperative Services Administration-Sponsored Surgery BOD Controls access and operations of OR Sponsors and directs team activity Surgical Directions LLC

17 Daily Huddle Participants Task Outcome OR Director, Anesthesia, PAT, Central Sterile Supply, Scheduling Review Schedule for next 72 hours Patient Risk Factors Equipment Sequence of Patients Staff Assignment Minimize Cancellations Improve On-Time Starts Improve Clinical Outcomes Surgical Directions LLC

18 Case Study: Existing Capacity Exceeds Demand Benchmark for 7 ORS ( 8,400 Cases ) 5,551 Suburban Hospital Benchmark for 6 ORS ( 7,200 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) Benchmark for 5 ORS ( 6,000 Cases ) Surgical Cases for 2009 Surgical Directions LLC

19 Number of Locations O.R, O.B, & Out of O.R Sample Hospital: Percentage of Rooms Running At a cost of $20 an minute, hospitals need to balance capacity with demand 7 Average Anesthetizing Locations Hour Surgical Directions LLC

20 Case Study: Block Time Utilization Analysis Average Block Utilization by Surgeon Recent 3 Mo Recent 6 Mo 100% 90% 80% 70% 60% 50% 65% target Utilization 3 month avg 40% 30% 20% 10% 0% Aribindi Chang GYN Hall John Kardasis Kumar Meghpara O'Donnell Patel Weber Surgical Directions LLC

21 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 Surgical Directions LLC

22 Case Study: Block Time Ratings Metric Benchmark- Now Suburban- Was Length 8 hour + Variable Utilization to maintain 75% Not measured Release time Variable by specialty 24 hour Open rooms 20% 0 Surgical Directions LLC

23 Anesthesia Leading System-wide Anesthesia leading system-wide initiative to improve outcomes and reduce cost Initiative PAT Manage co-morbities Diabetes Cardiac BMI Daily Huddle Impact PAT Reduce Admissions to ICU Reduce LOS Reduce SI, DVTs, and Cardiac events Reduce cancellations Reduce First Case Delays Surgical Directions LLC

24 Pre-Admission Testing Medical Director Telephone questionnaire Risk assessment to identify patients needing to be seen Testing protocols Protocols to manage co morbidity Surgical Directions LLC

25 Non-Labor Costs Non-Labor costs 60% of OR budget Best Practice Norm Inventory turns PAR levels Returned items from case costs 10% or less 30 High dollar implants Surgical Directions LLC

26 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 turns per year Surgical Directions LLC

27 Artificial Hip* US National Pricing $4,500 - $7,500 Belgium Hip $3,180 Cost Manufactory Implant $ 350 *New York Times August 7, 2013 Surgical Directions LLC

28 Case Study: Outcome Most improved hospital in the 13 hospital system Increased surgeon satisfaction Anesthesia income increased by over 25% Surgical Directions LLC

29 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% Surgical Directions LLC

30 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 Surgical Directions LLC

31 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. Surgical Directions LLC

32 Task Forces Physician and perioperative staff lead taskforce to drive change SSEC Block PAT Case time Efficiency Surgical Directions LLC

33 Surgeon report cards are produced monthly to increase organizational and surgeon awareness of key benchmarks and how surgeons compare Surgical Directions LLC

34 Surgeon Dashboard Surgical Directions LLC

35 Case Time Data Driving Organizational Change Patient In Anesthesia ready Cut Close Patient out Surgical Directions LLC

36 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 Surgical Directions LLC

37 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 Surgical Directions LLC

38 For questions or comments, please contact: Surgical Directions LLC 541 N. Fairbanks Court Suite 2740 Chicago, IL T F Surgical Directions LLC

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