Bending Your Financial Curve: Improving Utilization of Send Out Tests with Laboratory Formulary Y. Victoria Zhang, PhD, DABCC Judy Sterry, MS Victoria_Zhang@urmc.rochester.edu Judy_Sterry@urmc.rochester.edu University of Rochester Medical Center Disclosures None related to this presentation 2 1
Learning Objectives List the challenges that are facing the health care system Identify the opportunities to reduce cost in send out testing Discuss the strategic steps to implement laboratory formulary system to improve send out test utilization 3 Outline Example Background healthcare URMC Laboratory formulary development results Tips that may help good Bad 1,25-OH VitD 4 2
BACKGROUND 5 Health Care Costs Keep Increasing Health care cost increasing rate > GDP US has the highest per capita health costs Sisko A et al. Health Aff 2009;28:w346-w357 http://blogs.hbr.org/2009/08/how-to-think-constructively-ab/ 6 3
Laboratory Testing Costs $60 billions/year (~4% total health care costs) Annual growth rate 1999 2006: 6 7% Future: ~6 7%; some suggests 15 25% Molecular testing, whole genome sequencing 2010 accountable care acts 7 How to reduce costs? Annual pressure to reduce the cost to the hospital for laboratory testing Some solutions are to bring tests in-house but not always feasible So what s the next step(s) to monitor and reduce the costs associated with testing? 8 4
University of Rochester Medical Center School of Nursing School of Medicine and Dentistry 1,400 full-time faculty members 650 voluntary clinical faculty members 400 medical students, 550 graduate students, and 600 residents and fellows 32 departments and centers 9 University of Rochester Medical Center Medical center operating budget: $2.49 billion Strong Memorial Hospital 800 beds, 38,421 discharges Golisano Children s Hospital James P. Wilmot Cancer Center Highland hospital 261 beds, 16,140 discharges F. F. Thompson Health System 113 beds New comers: Strong west, Pluta Cancer Center, Interlakes oncology Eastman Institute for Oral Health 10 5
Department of Pathology and Laboratory Medicine 932 faculty and staff (56 faculty) 24/7/365 operation Clinical Pathology 2.3 million patient orders 3.5 million specimens received per year 7 million billable tests Anatomic Pathology 114,500 cases > 51,000 surgical pathology cases (89,000 specimens) > 63,500 cytology cases 350,000 specimens pick ups and deliveries per year 11 LABORATORY FORMULARY 12 6
Laboratory Formulary: what is? An approach adapted from pharmacy formulary system. To create a comprehensive menu of laboratory tests offered into different categories not all tests are available to everybody at all times. 13 Laboratory Formulary Transformation III Pre-approval required Test Menu Tier II Specialists Tier I Everybody 14 7
Laboratory Diagnostics Committee 15 Laboratory Diagnostics Committee Functions Define policy. Review recommendations from reference lab (ATOP Report). Review our send-out tests. Compile subcommittee s suggestions for tests clinical utility. Identify restricted and unrestricted referral tests. 16 8
Subcommittee Functions Led by senior clinical faculty members and/or department chairs. Provided insights of test utility in their specialty. Assisted review of restricted tests. 17 Laboratory Diagnostics Committee Top Down Initiation Bottom Up Execution 18 9
Two-Phase Implementation Planning Inpatients and ED Outpatients 2009 9/2011 11/2011 19 Lab Test Consent Forms 20 10
costs ($) Volume (#) By accepting this notice, you confirm the following: If this patient is currently hospitalized: I am the Attending Physician of record or a Consulting Attending caring for the hospitalized patient identified above. I am requesting a laboratory assay that is restricted or not provided by the Clinical Laboratories of Strong Memorial Hospital/Highland Hospital and may require shipment of sample to an outside reference laboratory to perform this assay. I understand that the time required to process, ship, and to receive RESULTS from an outside reference laboratory generally REQUIRES A MINIMUM OF FIVE (5) BUSINESS DAYS, and that for certain assays, results may not be available for several weeks. In making this request I CERTIFY that the results of the laboratory assay that I have requested are LIKELY TO ALTER MY TREATMENT PLAN DURING THIS PATIENT'S STAY IN THE HOSPITAL UNDER THE CURRENT ADMISSION 21 Inpatient Volumes and Costs $100,000 $80,000 $60,000 $40,000 $20,000 $0 0.00% -10.00% -20.00% -30.00% -40.00% -50.00% -60.00% IP Costs and volume IP$ IP# 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 IP Costs and volume % Change IP# IP$ 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 1,500 1,000 500-22 11
Transition between phase I and phase II: inpatient outpatient Data analysis LDC followed up with noncompliant providers Addition of unrestricted tests Additional guidelines implemented (preapproval required) Development of comprehensive data reports 23 11/2011 to now PHASE II: OUTPATIENT 24 12
Strategies Development of Tiered Laboratory Formulary Enhanced LDC membership: Subcommittees Authorized provider listing Support from Lab Sales Team (Outreach) to educate providers Additional website updates Additional training for providers and lab staff Enhanced security access options in EMR 25 Laboratory Formulary Tier I Unrestricted Available to all providers Tier II Restricted Restricted to Board-certified, specialtytrained physicians Who hold medical staff privilege at Strong Memorial or Highland Hospitals Tier III Off-formulary Tests of unclear, controversial, or poorly proven clinical values 26 13
Tier I Tests Examples Total of 1,553 tests All in-house tests Many send out tests 27 Tier II Tests List Total 225 tests http://www.urmc.rochester.edu/urmclabs/clinical/documents/copyofrestrictedtestlistingupdatejuly2013.pdf 11DEC 11 Deoxycortisol 17HCU 17/OH Corticosteroids, Urine 17KU 17 KETOSTEROIDS TOTAL 18HC 18 OH Corticosterone 5MTF 5-Methyltetrahydrofolate, CSF 7DEHC 7-Dehydrocholesterol A1AST Alpha 1 Antitrypsin,Stool ACHRP Acetylcholine Receptor Ab Reflex Panel ACRBL Acetylcholine Rec Blocking AB 28 14
Tier III: not included in Tier I/II Approval Form 29 Laboratory Formulary Memo 30 15
How to order Tier II/III tests? 31 URMC LDC Process Provider orders send out test Tier I Tier I? No Tier II Tier II? No Tier III Providers fill One Time Authorization form and send it to Reference Lab Provider can order test Yes Yes Yes Is the provider authorized to order restricted test? No Reference Lab verifies if the provider board certified, subspecialtytrained provider holding Medical Staff Privileges at Hospital and Affiliates Reference lab informs LDC of their findings Reference Lab verifies if the provider board-certified, subspecialty-trained provider holding Medical Staff Privileges at Hospital Affiliates Reference Lab searches for appropriate testing lab, obtains pricing and sample processing requirements Provider is informed the denial Yes No LDC Approval No Reference lab informs LDC of their findings and sends One Time Authorization form to LDC for approval LDC Approval Yes 16
Costs ($) 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 Volume (#) Outpatient Volumes and Costs $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 OP Costs and volume 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 OP$ OP# 15,000 10,000 5,000-10.00% 0.00% -10.00% -20.00% -30.00% -40.00% OP Costs and volume OP# OP$ 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 33 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Quarterly Volume Change by Tiers Total Volume Percent Volume Change 0% Tier 1 Tier 2 Tier 3 All -10% -20% -30% -40% -50% -60% -70% Tier 1 Tier 2 Tier 3 All 34 17
2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4 2013Q1 2013Q2 2013Q3 $1,200,000 $1,000,000 Quarterly Cost Change By Tiers $800,000 $600,000 $400,000 $200,000 $0 Total Cost Change Tier 1 Tier 2 Tier 3 All 140% 120% 100% 80% 60% 40% 20% 0% -20% -40% -60% Percentage Cost Change Tier 1 Tier 2 Tier 3 All 35 Cost per Test By Tier $1,600 $1,400 Tier 1 Tier 2 Tier 3 All $1,200 $1,000 $800 $600 $400 $200 $- 36 18
2009 JAN F EB MAR APR MAY JUN JUL AUG S EP OCT NOV D EC 2010 JAN F EB MAR APR MAY JUN JUL AUG S EP OCT NOV D EC 2011 JAN F EB MAR APR MAY JUN JUL AUG S EP OCT NOV D EC 2012 JAN F EB MAR APR MAY JUN JUL AUG S EP OCT NOV D EC 2013 JAN F EB MAR APR MAY JUN JUL AUG S EP OCT NOV D EC 2014 JAN F EB MAR APR MAY JUN JUL AUG S EP OCT NOV D EC Example Case 1,25 Vitamin D 450 400 350 300 Brought 25-Hydroxy Vitamin D inhouse Became reference lab for affiliate hospital Order Interventions Feb - Apr 2014 1. Targeted provider education 2. Remove test from "Preference Lists" 3. General education to all Medical Staff 4. Convert to "restricted" staus in formulary 5. Drop down test order display changed to show 25 OH before 1,25 250 Ambulatory EMR Go-live 200 150 ARUP Grand Rounds 100 50 0 37 1,25 Vitamin D Case Study Vitamin D, 25-Hydroxy is the appropriate test for routine assessment of vitamin D status. Vitamin D, 1,25-Dihydroxy is indicated for diagnosing patients with certain other conditions, primarily hypercalcemia. If used for diagnosing vitamin D deficiency, the results can be misleading. We decreased 1,25 Dihydroxy, CPOE requests by 60% in 7 months, saving $78,000 in reference costs by minimal order interventions As an academic medical center we have community hospitals using us as a reference lab. As a value add service, we can help them save upwards of $40,000 in reference costs by helping them educate physicians. 38 19
Summary of Laboratory Formulary Both inpatient and outpatient showed significant decrease in test volume and test costs. Later increase seems to be associated with erecord going live and the cost per tests for Tier III. More investigation is underway to ensure the efficiency of the laboratory formulary. 39 Tips that may help your decision and implementation of laboratory formulary WHAT WE LEARNED? 40 20
Key points to a successful implementation High level Hospital Support High level Pathology and Lab Medicine Support Dedicated Lab Faculty Member Physician to lead the team. Effective Communication and Training Increased Reference Lab staffing Utilize Outreach/Sales Team to help communicate message 41 Initial Concerns Many providers unaware of LDC formation and restricted testing policies Approval process took too long. Providers didn t know a test was restricted at time of ordering. Specimens were being collected prior to approval of restricted testing. Providers upset with message to Patients 42 21
Resolutions Enhanced communication Established 24-48 hours response time to restricted test requests. Created a list of restricted tests and added to website. Removed restricted testing from requisitions. Changed policy and educated provides: > Restricted tests would not be collected or tested without preapproval. > Patient communication for testing not collected would be Physician s responsibility. 43 Lessons Learned Timely communication of denials from LDC physician to ordering provider with recommendations for appropriate testing. Understand data requirements of the LDC Provide data reports on a regular basis with means of quickly adjusting data sets. Create a database for electronic submission of off-formulary requests: Better management of pending requests Store supporting documentation for approval or denial of testing. Support future decisions with query options Use as a training tool for residents. 44 22
Communication Laboratory Diagnostic Committee Ordering Physicians Laboratory Supporting Staff 45 An Opportunity for Clinical Labs Beyond maintaining quality and fulfilling test orders. Actively involve in decision making and the appropriate tests to order. 46 23
Thank you for your attention! END 47 24