Leadership for Quality A Strategy for Marketplace Success. Requirements for Transformation. Typical State of Shared Vision. It All Starts With Urgency

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Virginia Mason Medical Center Leadership for Quality A Strategy for Marketplace Success Estes Park Institute January 2012 Gary S.

physicians 5,000 employees Graduate Medical Education Research Institute Foundation Virginia Mason Institute Copyright 2009 Virginia Mason Medical Center.

AND human dimensions of change New compact aligns expectations with vision Broad and deep commitment to shared vision Visible and committed leadership and management It All

1 Virginia Mason Medical Center Leadership for Quality A Strategy for Marketplace Success Estes Park Institute January 2012 Gary S. Kaplan, MD, Chairman and CEO Virginia Mason Medical Center Seattle, Washington Integrated health care system 501(c)3 not for profit 336 bed hospital Nine locations 500 physicians 5,000 employees Graduate Medical Education Research Institute Foundation Virginia Mason Institute Copyright 2009 Virginia Mason Medical Center. All Rights Reserved Our Strategic Plan Requirements for Transformation Improvement Method (Technical) Critical mass feels urgency for change Executives address technical AND human dimensions of change New compact aligns expectations with vision Broad and deep commitment to shared vision Visible and committed leadership and management It All Starts With Urgency Typical State of Shared Vision When people have a true sense of urgency, they think that action on critical issues is needed now, not eventually, not when it fits easily into a schedule. John Kotter, A Sense of Urgency

Challenge to Hospital and Medical Staff Sharing A Vision Wobbly, precarious relationships Built on and reinforced by individual transactions Experiencing increasing strain Reflect physician

Commitment to patients Economic interests Recruit and retain talent Compact Clash Of Promise And Imperatives Expectations members of an organization have that are: Unstated yet understood Reciprocal

Implement EHR Create service experience Be patient-focused Improve access Improve efficiency Recruit/retain quality staff Societal needs Local market Competition Organization s strengths Vision Is

Organization s Responsibilities Virginia Mason Medical Center Physician Compact Foster Excellence Recruit and retain superior physicians and staff Support career development and professional

intent, organizational priorities and business decisions Offer opportunities for constructive dialogue Provide regular, written evaluation and feedback Educate Support and facilitate teaching, GME

2 Challenge to Hospital and Medical Staff Sharing A Vision Wobbly, precarious relationships Built on and reinforced by individual transactions Experiencing increasing strain Reflect physician disappointment in shift away from doctor as key customer to partner Economics further erode cooperation Basis of Vision is Shared Interests Organization s Interests Doctors Interests SHARED INTERESTS Commitment to patients Economic interests Recruit and retain talent Compact Clash Of Promise And Imperatives Expectations members of an organization have that are: Unstated yet understood Reciprocal The give The get Mutually beneficially Set up & reinforced by society and the organization Traditional Promise Legacy Expectations Autonomy Protection Entitlement Imperatives Improve safety/quality Implement EHR Create service experience Be patient-focused Improve access Improve efficiency Recruit/retain quality staff Societal needs Local market Competition Organization s strengths Vision Is Context for Compact STRATEGIC VISION Physicians give: What the organization needs to achieve the vision Organization gives: What helps physicians meet commitment What is meaningful to physicians Organization s Responsibilities Virginia Mason Medical Center Physician Compact Foster Excellence Recruit and retain superior physicians and staff Support career development and professional satisfaction Acknowledge contributions to patient care and the organization Create opportunities to participate in or support research Listen and Communicate Share information regarding strategic intent, organizational priorities and business decisions Offer opportunities for constructive dialogue Provide regular, written evaluation and feedback Educate Support and facilitate teaching, GME and CME Provide information and tools necessary to improve practice Reward Provide clear compensation with internal and market consistency, aligned with organizational goals Create an environment that supports teams and individuals Lead Manage and lead organization with integrity and accountability Physician s Responsibilities Focus on Patients Practice state of the art, quality medicine Encourage patient involvement in care and treatment decisions Achieve and maintain optimal patient access Insist on seamless service Collaborate on Care Delivery Include staff, physicians, and management on team Treat all members with respect Demonstrate the highest levels of ethical and professional conduct Behave in a manner consistent with group goals Participate in or support teaching Listen and Communicate Communicate clinical information in clear, timely manner Request information, resources needed to provide care consistent with VM goals Provide and accept feedback Take Ownership Implement VM accepted clinical standards of care Participate in and support group decisions Focus on the economic aspects of our practice Change Embrace innovation and continuous improvement Participate in necessary organizational change

The Role of the Board at Virginia Mason Ensure accomplishment of our Vision To Be the Quality Leader and Transform Health Care VM Board Guides, Supports, and Demands Patient first focus in all that

Connecting the Dots Voice of the Patient Each board meeting begins with patient story we hear both good and bad Many of same stories and letters shared at MMM Sometimes patients tell story in person

3 The Role of the Board at Virginia Mason Ensure accomplishment of our Vision To Be the Quality Leader and Transform Health Care VM Board Guides, Supports, and Demands Patient first focus in all that we do Best practice board governance Best practice management methodology (VMPS) Stretch goals, i.e. Zero, 100% Culture of transparency, one that embraces change Accountability for performance Connecting the Dots Voice of the Patient Each board meeting begins with patient story we hear both good and bad Many of same stories and letters shared at MMM Sometimes patients tell story in person Drives accountability The VMMC Quality Equation Q = A (O + S) W Q: Quality A: Appropriateness O: Outcomes S: Service W: Waste Our patients experience a very complex journey when they come for joint replacement Clinic Experience Periop Flow During VM and Boeing collaborated to implement an ambulatory ICU program Aim: reduce Boeing s healthcare cost for employees with the most expensive health conditions by 15% while improving their health status Inpatient Care Follow Up Care The Boeing Company: Connect and protect people globally

Primary Care at Virginia Mason leverages a team delivery system VM s cost/utilization metrics were outstanding -100% -80% -60% -40% -20% 0% 20% Costs (standardized) Prescriptions (day supply)

Collaborative Purchasing Power Drives the Quality Agenda Quality Standard Set by Purchasers Aligning Providers with Customers 1. Evidence based care 2. 100% patient satisfaction 3. Same day access 4.

4 Primary Care at Virginia Mason leverages a team delivery system VM s cost/utilization metrics were outstanding -100% -80% -60% -40% -20% 0% 20% Costs (standardized) Prescriptions (day supply) Prescriptions RN Patient MA Out-patient (other) Home Health Visits Dental Lab Radiology Outpatient Visits AHP MD PHARM Office Visits ER Visits Hospital Days (acute) Admits (acute) The Marketplace Collaborative Purchasing Power Drives the Quality Agenda Quality Standard Set by Purchasers Aligning Providers with Customers 1. Evidence based care % patient satisfaction 3. Same day access 4. Rapid return to function 5. Affordable price for buyer and seller Priorities Set by Purchasers Costly Conditions for Employers 1. Screening and prevention 2. Back pain 3. Shoulder, knee and hip pain 4. Headache 5. Respiratory symptoms 6. Breast symptoms 7. Depression 8. Diabetes 9. Abdominal pain 10. Chest pain Knowing What the Customer Wants Doing the Right Thing: Direct Cost $2,000,000 $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- Cost Distribution by Disease Category Half Year Totals

Conventional Pathway for Back Pain PCP PCP MRI PCP Neurosurg Physiatry PT visits 1-15 Current Pathway For Back Pain Wait for appt Spine Clinic PT: 2.

has indirect cost to employer of over $18/hr Better Quality & Value for Headache With Medic al Evidence and Systems Better Quality & Value for Headache Preventing Poor Choices: Headache

Lower cost for buyers and sellers frequency Reduction in imaging Headache: -23% Low back pain: -25% Sinusitis: -25% Value added Non-value added Variable value The High Cost of Work Loss

5 Conventional Pathway for Back Pain PCP PCP MRI PCP Neurosurg Physiatry PT visits 1-15 Current Pathway For Back Pain Wait for appt Spine Clinic PT: 2.8 visits TIME Waits and delays Non value-added Evidence-based value Waiting has indirect cost to employer of over $18/hr Waits and delays Non value-added Evidence-based value TIME Waiting has indirect cost to employer of over $18/hr Better Quality & Value for Headache With Medic al Evidence and Systems Better Quality & Value for Headache Preventing Poor Choices: Headache Imaging Mistake-proofing implemented Redesign creates: 1. Evidence-based care 2. High patient satisfaction 3. Same-day access 4. Rapid return to function 5. Lower cost for buyers and sellers frequency Reduction in imaging Headache: -23% Low back pain: -25% Sinusitis: -25% Value added Non-value added Variable value The High Cost of Work Loss The Bottom Line: Who Benefits? Providers Benefit: Decreased Production Cost 1. 65% of cost of production at VM is labor 2. Labor cost and skill/task alignment a. Proceduralist MD $4/minute b. Non proceduralist MD $2/minute c. Nurse practitioner $1/minute JOEM, 7/07

Results: Better Economics for Providers D ollars in Millions 3.0 2.0 1.0.29-0.0 REHAB CLINIC MD only Revenue Slope = 0.53 Cost Slope = 0.43 Margin Slope = 0.

6 Results: Better Economics for Providers D ollars in Millions REHAB CLINIC MD only Revenue Slope = 0.53 Cost Slope = 0.43 Margin Slope = 0.10 Current Rehab Clinic FTE MD FTE Physical Therapist Revenue Cost Margin Dollars in Millions SPINE CLINIC MD and Physical Therapist Combined Revenue Revenue Slope = 0.81 Co st Slope = 0.45 M argin Slope = 0.36 Cost Current Spine Clinic Margin FTE MD FTE Physical Therapist Annual direct cost, revenue and margin: traditional and systems-based models. Distress and Adaptive Work Leaders Role in Signal Generation Disequilibrium Adaptive challenge Limit of tolerance Productive range of distress Leaders are signal generators who reduce uncertainty and ambiguity about what is important and how to act. Charles O Reilly III Time Threshold of learning OR Heifetz, Ronald A. and Marty Linsky. Leadership on the Line, Harvard Business School Press, 2002, p 108 Effective Sponsorship Vision of success Set stretch goal Provide resources Remove barriers Fail forward fast Celebrate achievements Engage Stakeholders You can t impose anything on anyone and expect them to be committed to it. Edgar Schein, Professor Emeritus MIT Sloan School

7 Leaders are Dealers in Hope. Napoleon Bonaparte December 2010 In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists. Eric Hoffer Copyright 2009 Virginia Mason Medical Center. All Rights Reserved.

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