1© 2004 TMIT

Surviving the No Outcome No Income Tsunami:

Pay-4-Performance – A Patient Safety Focus

Surviving the No Outcome No Income Tsunami:

Pay-4-Performance – A Patient Safety Focus

Charles Denham, M.D.

Chairman, Texas Medical Institute of Technology

Chairman, Leapfrog NQF Safe Practices Program

2© 2004 TMIT

• Breaking News in Pay-4-Performance

• The “C-Suite” Perspective

• Building the Business Case

• Communicating to the “C-Suite”

Surviving the No Outcome No Income Tsunami:

3© 2004 TMIT

Mark McClellan, MD, PhDMark McClellan, MD, PhDMark McClellan, MD, PhDMark McClellan, MD, PhD

““P-4-P and Patient Safety are major P-4-P and Patient Safety are major

priorities for me, the Secretary of priorities for me, the Secretary of

Health, and the President”Health, and the President”

““P-4-P and Patient Safety are major P-4-P and Patient Safety are major

priorities for me, the Secretary of priorities for me, the Secretary of

Health, and the President”Health, and the President”

4

4© 2004 TMIT

5

5© 2004 TMIT

6

6© 2004 TMIT

7

7© 2004 TMIT

8

8© 2004 TMIT

9

9© 2003 TMIT

10

11

© 2004 TMIT Leapfrog Survey 1.0. 12 11.17.03 1600 CT

Enterprise-wide System

# Practice Final Weighting out of 1000 points

1 Create Safety Culture 263

3 Ensure Adequate Nursing Workforce 119

SUBTOTAL 382

Enterprise-wide Process

6 Verbal Order Readback 36

7 Standardized Abbrev./Doses 17

8 No Pt Care Summaries from Memory 17

9 Pt Care Info/Orders to all Providers 84

SUBTOTAL 154

TOTAL ENTERPRISE-WIDE 536

Clinical Care Setting or Function Specific

5 Pharmacist Active in Med Use 32

10 Pt Readback of Informed Consent 9

11 Document Resusc./End of Life/ Directives 12

13 Prevention of Mislabeled Radiographs 16

14 Wrong-site/Wrong-patient Prevention 30

15 Prophylactic Beta Blockers for Elective Surgery 23

16 Pressure Ulcer Prevention 28

17 DVT/VTE- Risk Assessment & Prevention 27

18 Anticoagulation Services 39

19 Aspiration Prevention 24

20 Central Venous Line Sepsis Prevention 33

21 Surgical Site Infection/AB Prophylaxis 37

22 Contrast-induced Renal Failure Protocol 12

23 Malnutrition Prevention 12

24 Tourniquet—Ischemia/Thrombosis Prevention 9

25 Hand Washing 33

26 Flu Vaccination for HC Workers 11

27 Optimize Medication Workspaces 7

28 Optimize Med. Storage/Pkg/Labeling 22

29 I.D. High Alert Medications 21

30 Med. Unit Dosing/Unit-of-Use Dispensing 29

SUBTOTAL 465

27 NQF Safe Practices Weighting Results

1000 Points Applied to27 Practices

Weighted IndividuallyHospitals Nationally

Ranked

© 2004 TMIT Leapfrog Survey 1.0. 13 11.17.03 1600 CT

Enterprise-wide System

# Practice Final Weighting out of 1000 points

1 Create Safety Culture 263

3 Ensure Adequate Nursing Workforce 119

SUBTOTAL 382

Enterprise-wide Process 6 Verbal Order Readback 36

7 Standardized Abbrev./Doses 17

8 No Pt Care Summaries from Memory 17

9 Pt Care Info/Orders to all Providers 84

SUBTOTAL 154

TOTAL ENTERPRISE-WIDE 536

27 NQF Safe Practices Weighting Results

© 2004 TMIT Leapfrog Survey 1.0. 14 11.17.03 1600 CT

Clinical Care Setting or Function Specific5 Pharmacist Active in Med Use 32

10 Pt Readback of Informed Consent 9

11 Document Resusc./End of Life/ Directives 12

13 Prevention of Mislabeled Radiographs 16

14 Wrong-site/Wrong-patient Prevention 30

15 Prophylactic Beta Blockers for Elective Surgery 23

16 Pressure Ulcer Prevention 28

17 DVT/VTE- Risk Assessment & Prevention 27

18 Anticoagulation Services 39

19 Aspiration Prevention 24

20 Central Venous Line Sepsis Prevention 33

27 NQF Safe Practices Weighting Results

© 2004 TMIT Leapfrog Survey 1.0. 15 11.17.03 1600 CT

Clinical Care Setting or Function Specific21 Surgical Site Infection/AB Prophylaxis 37

22 Contrast-induced Renal Failure Protocol 12

23 Malnutrition Prevention 12

24 Tourniquet—Ischemia/Thrombosis Prevention 9

25 Hand Washing 33

26 Flu Vaccination for HC Workers 11

27 Optimize Medication Workspaces 7

28 Optimize Med. Storage/Pkg/Labeling 22

29 I.D. High Alert Medications 21

30 Med. Unit Dosing/Unit-of-Use Dispensing 29

SUBTOTAL 465

27 NQF Safe Practices Weighting Results

© 2004 TMIT Leapfrog Survey 1.0 11.17.03 1600 CT16

1. Compliment the NQF Safe Practices Report (May 2003): The survey, weighting system, and ranking system designs are explicitly tied to the problem areas and practices defined by the NQF report. Recognizing the challenges of tying standards, measures, or practices to a report that is written at a snapshot in time, the survey, weighting, and ranking systems take into account that new evidence and refinement of performance improvement methods are being generated all the time. Patient safety is an emerging science and is constantly evolving. Therefore, the guiding principles included focus on the excellent list of safety problems being targeted by NQF practices and apply the “4 A Framework” below. The “4 A Framework” provides real flexibility of interpretation and provides a means of providing partial credit for partial progress and partial credit for commitment to progress. Although the survey will undergo refinement through public review and optimization by our subject matter experts, the design will be kept intact in order to make the survey fair and reasonable. The goal is to neutralize the challenges of explicitly tying questions to specific language of practices that are evolving while staying well within the scope of the NQF report.

2. Partial Credit for Partial Progress: The questions were designed using a “select any that apply” response giving hospitals numerous opportunities for partial credit. Once significant public input is provided, a set of FAQs will be provided for each question to assure that respondents will have clarity regarding what will qualify for credit on a question specific basis.

3. Partial Credit for Commitment: Many of the questions provide partial credit to organizations that make substantial commitment to get started. This will help those that may be “behind the safety curve”. The intent is to provide a clear roadmap to organizations that have heretofore not prioritized safety. These questions are also intended to provide fairness in areas where patient safety issues have not been well publicized.

4. Systematic Application of 4A Framework : The 4A framework recognizes the sequential and interdependent nature of awareness of our performance opportunities, accountability of leadership, the ability to employ practices, and measurable action towards closing performance gaps. This “4A Framework” (updated from a 3 A framework published by C. Denham in 2001) was used as an organizational structure to allow systematic customization of survey questions.

Awareness: Clearly, the leaders of an organization must be aware of performance problems before they can make any impact on them. The concept of THE problem or performance opportunity addresses the awareness by hospitals that there is evidence to support a common problem across all hospitals. The concept of OUR problem addresses awareness of the frequency and severity of adverse events to our patient population within our organization and recognition of the impact that practices or performance improvement methods can have on those adverse events. Awareness of THE performance opportunities and OUR performance opportunities are addressed in a relatively standardized manner in each survey question, however they were customized to each problem depending on the current state of awareness in the community.

Accountability: A critical success factor to patient safety is accountability of the leadership to performance. Whether the mechanisms of personal performance reviews or performance compensation incentives are used, sustained gains in patient safety frequently do not occur without personal accountability of the leaders. This issue was addressed in a relatively standardized way throughout the survey, however the questions were fine tuned to the scope or care setting addressed by the practice.

Ability: An organization may be aware of THE problem – a performance gap common to most hospitals. In fact they may be aware of OUR problem (their own) with clear evidence of frequency and severity of adverse events in their own patient population. They may even have awareness of the impact of a given practice, however if they do not invest in education or skill development and more importantly allocate real protected staff time and dollars to a given problem, the impact on safety is modest at best. Adding a patient safety responsibility to an already overloaded employee without carving out the time and providing them the necessary financial resources to make an impact sends a clear message to the organization. The “ability” related survey questions employ a graduated set of investment levels ranging from investment in education, skill development (training regarding the application of practices or performance improvement methods), dedicated HR, and dedicated line item budget allocations.

Actions: Action activities were tied to the NQF cited best practices language as appropriate. Where there have been great strides in best practices, the survey questions provide latitude for activities deserving credit. A set of FAQs will be tied to each survey question that will provide guidance as to what activities may qualify for credit, especially if certain developments in patient safety have been substantiated in the literature after publication of the NQF report. Performance Improvement programs and project actions were given high emphasis, as such, these programs will require thorough literature reviews and examination of readily available practices be undertaken. Such initiatives would include but not limited to the NQF practices especially if there were new high impact actions that target the problems listed in the NQF report. Far more important than attestations of compliance to procedures, policies, and protocols are ongoing programs that have regular measurement and process improvement elements.

5. Sensitivity to use of the word “Problem”: Risk managers at hospital organizations have expressed concern over the use of the word “problem”, therefore wherever possible the term “performance opportunity” was used in the survey in place of the word “problem”. That is not to say the word problem is not used appropriately in the NQF report. It is.

What Guiding Principles were used to design the 1.0 Survey Questions?

1. Compliment the NQF Safe Practices Report (May 2003): • The survey, weighting system, and ranking system designs

are explicitly tied to the problem areas and practices defined by the NQF report.

• Recognizing the challenges of tying standards, measures, or practices to a report that is written at a snapshot in time, the survey, weighting, and ranking systems take into account that new evidence and refinement of performance improvement methods are being generated all the time.

• Patient safety is an emerging science and is constantly evolving. The goal is to neutralize the challenges of explicitly tying questions to specific language of practices that are evolving while staying well within the scope of the NQF report.

© 2004 TMIT Leapfrog Survey 1.0 11.17.03 1600 CT17

1. Compliment the NQF Safe Practices Report (May 2003): The survey, weighting system, and ranking system designs are explicitly tied to the problem areas and practices defined by the NQF report. Recognizing the challenges of tying standards, measures, or practices to a report that is written at a snapshot in time, the survey, weighting, and ranking systems take into account that new evidence and refinement of performance improvement methods are being generated all the time. Patient safety is an emerging science and is constantly evolving. Therefore, the guiding principles included focus on the excellent list of safety problems being targeted by NQF practices and apply the “4 A Framework” below. The “4 A Framework” provides real flexibility of interpretation and provides a means of providing partial credit for partial progress and partial credit for commitment to progress. Although the survey will undergo refinement through public review and optimization by our subject matter experts, the design will be kept intact in order to make the survey fair and reasonable. The goal is to neutralize the challenges of explicitly tying questions to specific language of practices that are evolving while staying well within the scope of the NQF report.

2. Partial Credit for Partial Progress: The questions were designed using a “select any that apply” response giving hospitals numerous opportunities for partial credit. Once significant public input is provided, a set of FAQs will be provided for each question to assure that respondents will have clarity regarding what will qualify for credit on a question specific basis.

3. Partial Credit for Commitment: Many of the questions provide partial credit to organizations that make substantial commitment to get started. This will help those that may be “behind the safety curve”. The intent is to provide a clear roadmap to organizations that have heretofore not prioritized safety. These questions are also intended to provide fairness in areas where patient safety issues have not been well publicized.

4. Systematic Application of 4A Framework : The 4A framework recognizes the sequential and interdependent nature of awareness of our performance opportunities, accountability of leadership, the ability to employ practices, and measurable action towards closing performance gaps. This “4A Framework” (updated from a 3 A framework published by C. Denham in 2001) was used as an organizational structure to allow systematic customization of survey questions.

Awareness: Clearly, the leaders of an organization must be aware of performance problems before they can make any impact on them. The concept of THE problem or performance opportunity addresses the awareness by hospitals that there is evidence to support a common problem across all hospitals. The concept of OUR problem addresses awareness of the frequency and severity of adverse events to our patient population within our organization and recognition of the impact that practices or performance improvement methods can have on those adverse events. Awareness of THE performance opportunities and OUR performance opportunities are addressed in a relatively standardized manner in each survey question, however they were customized to each problem depending on the current state of awareness in the community.

Accountability: A critical success factor to patient safety is accountability of the leadership to performance. Whether the mechanisms of personal performance reviews or performance compensation incentives are used, sustained gains in patient safety frequently do not occur without personal accountability of the leaders. This issue was addressed in a relatively standardized way throughout the survey, however the questions were fine tuned to the scope or care setting addressed by the practice.

Ability: An organization may be aware of THE problem – a performance gap common to most hospitals. In fact they may be aware of OUR problem (their own) with clear evidence of frequency and severity of adverse events in their own patient population. They may even have awareness of the impact of a given practice, however if they do not invest in education or skill development and more importantly allocate real protected staff time and dollars to a given problem, the impact on safety is modest at best. Adding a patient safety responsibility to an already overloaded employee without carving out the time and providing them the necessary financial resources to make an impact sends a clear message to the organization. The “ability” related survey questions employ a graduated set of investment levels ranging from investment in education, skill development (training regarding the application of practices or performance improvement methods), dedicated HR, and dedicated line item budget allocations.

Actions: Action activities were tied to the NQF cited best practices language as appropriate. Where there have been great strides in best practices, the survey questions provide latitude for activities deserving credit. A set of FAQs will be tied to each survey question that will provide guidance as to what activities may qualify for credit, especially if certain developments in patient safety have been substantiated in the literature after publication of the NQF report. Performance Improvement programs and project actions were given high emphasis, as such, these programs will require thorough literature reviews and examination of readily available practices be undertaken. Such initiatives would include but not limited to the NQF practices especially if there were new high impact actions that target the problems listed in the NQF report. Far more important than attestations of compliance to procedures, policies, and protocols are ongoing programs that have regular measurement and process improvement elements.

5. Sensitivity to use of the word “Problem”: Risk managers at hospital organizations have expressed concern over the use of the word “problem”, therefore wherever possible the term “performance opportunity” was used in the survey in place of the word “problem”. That is not to say the word problem is not used appropriately in the NQF report. It is.

What Guiding Principles were used to design the 1.0 Survey Questions?

2. Partial Credit for Partial Progress:• The questions were designed using a “select any that

apply” response giving hospitals numerous opportunities for partial credit. Once significant public input is provided, a set of FAQs will be provided for each question to assure that respondents will have clarity regarding what will qualify for credit on a question specific basis.

3. Partial Credit for Commitment: • Many of the questions provide partial credit to

organizations that make substantial commitment to get started. This will help those that may be “behind the safety curve”. The intent is to provide a clear roadmap to organizations that have heretofore not prioritized safety. These questions are also intended to provide fairness in areas where patient safety issues have not been well publicized.

© 2004 TMIT Leapfrog Survey 1.0 11.17.03 1600 CT18

1. Compliment the NQF Safe Practices Report (May 2003): The survey, weighting system, and ranking system designs are explicitly tied to the problem areas and practices defined by the NQF report. Recognizing the challenges of tying standards, measures, or practices to a report that is written at a snapshot in time, the survey, weighting, and ranking systems take into account that new evidence and refinement of performance improvement methods are being generated all the time. Patient safety is an emerging science and is constantly evolving. Therefore, the guiding principles included focus on the excellent list of safety problems being targeted by NQF practices and apply the “4 A Framework” below. The “4 A Framework” provides real flexibility of interpretation and provides a means of providing partial credit for partial progress and partial credit for commitment to progress. Although the survey will undergo refinement through public review and optimization by our subject matter experts, the design will be kept intact in order to make the survey fair and reasonable. The goal is to neutralize the challenges of explicitly tying questions to specific language of practices that are evolving while staying well within the scope of the NQF report.

2. Partial Credit for Partial Progress: The questions were designed using a “select any that apply” response giving hospitals numerous opportunities for partial credit. Once significant public input is provided, a set of FAQs will be provided for each question to assure that respondents will have clarity regarding what will qualify for credit on a question specific basis.

3. Partial Credit for Commitment: Many of the questions provide partial credit to organizations that make substantial commitment to get started. This will help those that may be “behind the safety curve”. The intent is to provide a clear roadmap to organizations that have heretofore not prioritized safety. These questions are also intended to provide fairness in areas where patient safety issues have not been well publicized.

4. Systematic Application of 4A Framework : The 4A framework recognizes the sequential and interdependent nature of awareness of our performance opportunities, accountability of leadership, the ability to employ practices, and measurable action towards closing performance gaps. This “4A Framework” (updated from a 3 A framework published by C. Denham in 2001) was used as an organizational structure to allow systematic customization of survey questions.

Awareness: Clearly, the leaders of an organization must be aware of performance problems before they can make any impact on them. The concept of THE problem or performance opportunity addresses the awareness by hospitals that there is evidence to support a common problem across all hospitals. The concept of OUR problem addresses awareness of the frequency and severity of adverse events to our patient population within our organization and recognition of the impact that practices or performance improvement methods can have on those adverse events. Awareness of THE performance opportunities and OUR performance opportunities are addressed in a relatively standardized manner in each survey question, however they were customized to each problem depending on the current state of awareness in the community.

Accountability: A critical success factor to patient safety is accountability of the leadership to performance. Whether the mechanisms of personal performance reviews or performance compensation incentives are used, sustained gains in patient safety frequently do not occur without personal accountability of the leaders. This issue was addressed in a relatively standardized way throughout the survey, however the questions were fine tuned to the scope or care setting addressed by the practice.

Ability: An organization may be aware of THE problem – a performance gap common to most hospitals. In fact they may be aware of OUR problem (their own) with clear evidence of frequency and severity of adverse events in their own patient population. They may even have awareness of the impact of a given practice, however if they do not invest in education or skill development and more importantly allocate real protected staff time and dollars to a given problem, the impact on safety is modest at best. Adding a patient safety responsibility to an already overloaded employee without carving out the time and providing them the necessary financial resources to make an impact sends a clear message to the organization. The “ability” related survey questions employ a graduated set of investment levels ranging from investment in education, skill development (training regarding the application of practices or performance improvement methods), dedicated HR, and dedicated line item budget allocations.

Actions: Action activities were tied to the NQF cited best practices language as appropriate. Where there have been great strides in best practices, the survey questions provide latitude for activities deserving credit. A set of FAQs will be tied to each survey question that will provide guidance as to what activities may qualify for credit, especially if certain developments in patient safety have been substantiated in the literature after publication of the NQF report. Performance Improvement programs and project actions were given high emphasis, as such, these programs will require thorough literature reviews and examination of readily available practices be undertaken. Such initiatives would include but not limited to the NQF practices especially if there were new high impact actions that target the problems listed in the NQF report. Far more important than attestations of compliance to procedures, policies, and protocols are ongoing programs that have regular measurement and process improvement elements.

5. Sensitivity to use of the word “Problem”: Risk managers at hospital organizations have expressed concern over the use of the word “problem”, therefore wherever possible the term “performance opportunity” was used in the survey in place of the word “problem”. That is not to say the word problem is not used appropriately in the NQF report. It is.

What Guiding Principles were used to design the 1.0 Survey Questions?

4. Systematic Application of 4 A Framework:

• The 4A framework recognizes the sequential and interdependent nature of awareness of our performance opportunities, accountability of leadership, the ability to employ practices, and measurable action towards closing performance gaps. This “4A Framework” (updated from a 3 A framework published by C. Denham in 2001) was used as an organizational structure to allow systematic customization of survey questions.

© 2004 HCC Corporation 19

hccarchive\fdtncomp\communication\tools\

template\topdown.pot

OUR PROBLEM

AWARENESS

THE PROBLEM

EvidenceOf Education

Commitmentto Educate

Commitment To Measure and Report To Admin

Measured Events with Opportunity

Report To Admin

In Strategic/Ops Plan

Commit To Strategic/Ops Plan

ABILITY

Commit to Invest in Education

Commit to Invest in Skills

Commit to Dedicated HR

Commit to Budget

Invest in Education

Invest in Skills

Dedicated HR

Line Item Budget

ACTION

Commit to Performance Improvement Program

Commit to Invest in Skills

Commit to Clinical Functional Unit wide, Department-wide Service Line wide PI Program

Commit to Enterprise-wide PI Program OR Rigorous Practice Implementation

Basic Level of Practice Actions

Intermediate Level of Practice Actions

Enterprise-wide PI Program OR Rigorous Practice Implementation

Clinical Functional Unit wide, Department-wide Service Line wide PI Program

BOARD

DEPT HEAD

SR. EXECs

CEO

ACCOUNTABILITY

Commitment toDept. Head Accountability

Commitment toExec.s Accountability

Commitment toCEO Accountability

Commitment toReport Board

• The 4 A Framework provides a graduated scale of options for to Awareness, Accountability, Ability, and Action.

• The survey design was intended to deliver partial credit for partial progress in each of the 4 A categories.

• Partial credit for commitment is provided not only to help stratify the respondents but to create a Hawthorne effect: to encourage commitment through participation in the survey and recognition that a hospital organization could increase its score by making a commitment at the time of survey response.

• The Rural Hospital Task Force will apply the 4 A Framework to the first 3 Leapfrog Leaps. The objective is to create a fair and reasonable set of survey questions to address the unique characteristics of rural hospitals.

4 A Framework

Confidential – Not to be distributed

© 2004 HCC Corporation 20

hccarchive\fdtncomp\communication\tools\

template\topdown.pot

OUR PROBLEM

THE PROBLEM

ABILITY

Commit to Invest in Education

Commit to Invest in Skills

Commit to Dedicated HR

Commit to Budget

Invest in Education

Invest in Skills

Dedicated HR

Line Item Budget

ACTION

Commit to Performance Improvement Program

Commit to Invest in Skills

Commit to Clinical Functional Unit wide, Department-wide Service Line wide PI Program

Commit to Enterprise-wide PI Program OR Rigorous Practice Implementation

Basic Level of Practice Actions

Intermediate Level of Practice Actions

Enterprise-wide PI Program OR Rigorous Practice Implementation

Clinical Functional Unit wide, Department-wide Service Line wide PI Program

BOARD

DEPT HEAD

SR. EXECs

CEO

ACCOUNTABILITY

Commitment toDept. Head Accountability

Commitment toExec.s Accountability

Commitment toCEO Accountability

Commitment toReport Board

AWARENESS

EvidenceOf Education

Commitmentto Educate

Commitment To Measure and Report To Admin

Measured Events with Opportunity

Report To Admin

In Strategic/Ops Plan

Commit To Strategic/Ops Plan

AWARENESS

EvidenceOf Education

Commitmentto Educate

Commitment To Measure and Report To Admin

Measured Events with Opportunity Report To Admin

In Strategic/Ops Plan

Commit To Strategic/Ops Plan

OUR PROBLEM

THE PROBLEM

© 2004 HCC Corporation 21

hccarchive\fdtncomp\communication\tools\

template\topdown.pot

OUR PROBLEM

THE PROBLEM

ABILITY

Commit to Invest in Education

Commit to Invest in Skills

Commit to Dedicated HR

Commit to Budget

Invest in Education

Invest in Skills

Dedicated HR

Line Item Budget

ACTION

Commit to Performance Improvement Program

Commit to Invest in Skills

Commit to Clinical Functional Unit wide, Department-wide Service Line wide PI Program

Commit to Enterprise-wide PI Program OR Rigorous Practice Implementation

Basic Level of Practice Actions

Intermediate Level of Practice Actions

Enterprise-wide PI Program OR Rigorous Practice Implementation

Clinical Functional Unit wide, Department-wide Service Line wide PI Program

AWARENESS

EvidenceOf Education

Commitmentto Educate

Commitment To Measure and Report To Admin

Measured Events with Opportunity

Report To Admin

In Strategic/Ops Plan

Commit To Strategic/Ops Plan

BOARD

DEPT HEAD

SR. EXECs

CEO

Commitment toExec.s Accountability

ACCOUNTABILITY

Commitment toDept. Head

Accountability

Commitment toCEO

Accountability

Commitment toReport Board

© 2004 HCC Corporation 22

hccarchive\fdtncomp\communication\tools\

template\topdown.pot

OUR PROBLEM

THE PROBLEM

ACTION

Commit to Performance Improvement Program

Commit to Invest in Skills

Commit to Clinical Functional Unit wide, Department-wide Service Line wide PI Program

Commit to Enterprise-wide PI Program OR Rigorous Practice Implementation

Basic Level of Practice Actions

Intermediate Level of Practice Actions

Enterprise-wide PI Program OR Rigorous Practice Implementation

Clinical Functional Unit wide, Department-wide Service Line wide PI Program

AWARENESS

EvidenceOf Education

Commitmentto Educate

Commitment To Measure and Report To Admin

Measured Events with Opportunity

Report To Admin

In Strategic/Ops Plan

Commit To Strategic/Ops Plan

ACCOUNTABILITY

Commitment toDept. Head Accountability

Commitment toExec.s Accountability

Commitment toCEO Accountability

Commitment toReport Board

ABILITY

Commit to Invest in Education

Commit to Invest in Skills

Commit to Dedicated HR

Commit to Budget

Invest in Education

Invest in Skills

Dedicated HR

Line Item Budget

© 2004 HCC Corporation 23

hccarchive\fdtncomp\communication\tools\

template\topdown.pot

ABILITY

Commit to Invest in Education

Commit to Invest in Skills

Commit to Dedicated HR

Commit to Budget

Invest in Education

Invest in Skills

Dedicated HR

Line Item Budget

OUR PROBLEM

THE PROBLEM

AWARENESS

EvidenceOf Education

Commitmentto Educate

Commitment To Measure and Report To Admin

Measured Events with Opportunity

Report To Admin

In Strategic/Ops Plan

Commit To Strategic/Ops Plan

Confidential – Not to be distributed

ACCOUNTABILITY

Commitment toDept. Head Accountability

Commitment toExec.s Accountability

Commitment toCEO Accountability

Commitment toReport Board

ACTION

Commit to Performance Improvement Program

Commit to Invest in Skills

Commit to Clinical Functional Unit wide, Department-wide Service Line wide PI Program

Commit to Enterprise-wide PI Program OR Rigorous Practice Implementation

Basic Level of Practice Actions

Intermediate Level of Practice Actions

Enterprise-wide PI Program OR Rigorous Practice Implementation

Clinical Functional Unit wide, Department-wide Service Line wide PI Program

24

25

25© 2004 TMIT TMIT

www.SafetyLeaders.orgwww.SafetyLeaders.orgSubmitter’s ToolboxSubmitter’s Toolbox

www.SafetyLeaders.orgwww.SafetyLeaders.orgSubmitter’s ToolboxSubmitter’s Toolbox

Five Stages for Submission:Five Stages for Submission:Five Stages for Submission:Five Stages for Submission:

SubmitAssessCollectPlanPrepare

26

27

28

29

30

31© 2004 TMIT

• Breaking News in Pay-4-Performance

• The “C-Suite” Perspective

• Building the Business Case

• Communicating to the “C-Suite”

Surviving the No Outcome No Income Tsunami:

32© 2004 TMIT

Chris Olivia MD, MBAChris Olivia MD, MBACEOCEO

Cooper Healthcare Before:Cooper Healthcare Before:

Facing bankruptcyFacing bankruptcyMajor turnaround over 24 monthsMajor turnaround over 24 monthsUnfavorable payer mixUnfavorable payer mixPoor reimbursementPoor reimbursement

After a Focus on Quality:After a Focus on Quality:

Major Financial ReversalMajor Financial ReversalUpgraded Bond RatingUpgraded Bond RatingNow Starting a new medical schoolNow Starting a new medical school

33© 2004 TMIT

Warren BuffettWarren Buffett

““The chains of habitThe chains of habit

are too light to beare too light to be

noticed until they are noticed until they are

too heavy to be too heavy to be

broken.”broken.”

34© 2004 TMIT

• Breaking News in Pay-4-Performance

• The “C-Suite” Perspective

• Building the Business Case

• Communicating to the “C-Suite”

Surviving the No Outcome No Income Tsunami:

35© 2004 TMIT

ProForma• Givens, Assumptions, and Variables:

• Format: Typical Comprehensive Investment

• Time: ( ex. 3 years )

• Metrics: ( ex. cost per discharge )1.Additional L.O.S.2.Measures of harm3.NCC MERP

• Are There Trends? What is the trajectory of trends and what might be the drivers

• Return on a Risk Management Program

Business Case Design

Revenue – Cost = Margin

36© 2004 TMIT

Monitored Process

The Blunt and Sharp Ends

Practitioner

Sharp End

Organizations, Institutions,Policies, Procedures, Regulations

Blunt End

Resources andConstraints

Knowledge Goals

Mindset

Errors andExpertise

*Adapted from Cook and Woods Tale of Two Stories

37© 2004 TMIT

HUMAN FACTORS

SAFETYCULTURE

SAFETYINNOVATION

SAFETYINNOVATION

SAFETYINNOVATION

SAFETYCHALLENGES

PROCESSREENGINEERING

38© 2004 TMIT

New AloneNew

Alone

Traditional Alone

Effort (Elapsed Time, Cost)

TechnicalPerformance

Traditional and New Technologies

Savings from Combining Traditional and New Technologies

Traditional versus New

Performance Gap

Combined Performance Potential

Traditional and New Technologies

Combined

SwitchingPoint

Source: Thomke, Stefan, Enlightened Experimentation: The new Imperative for Innovation, Harvard Business Review, Feb 2001.

39© 2004 TMIT

Source: VHA’s 2003 Research Series – The fusion of Technology and Work Force Medscape

1 2 3 4 5

Time

Ideal

Failure

Disaster

Stages of Change ModelT

ime

and

En

erg

y R

equ

ired

Pre-contemplation Contemplation Preparation Action Maintenance

40© 2004 TMIT

Recommendations for Business Case Development

1. Keep it Simple2. Frame the Issues and Decision3. Use the Blunt End – Sharp End approach4. Take an Enabling Solutions approach5. Use a Revenue – Expense = Margin framework6. Provide Compelling Evidence7. Appeal to all Stakeholders8. Preemptively Identify Concerns9. Teach them to Fish – Don’t Give them a Fish10. Never Accept Supplier Stories at Face Value11. Take a Full Value approach to calculating impact

41© 2004 TMIT

Revenue – Cost = Margin

All Admissions are good and all revenue is good

Cost takes care of itself

All admissions that generate revenue generate margin

PAST

42© 2004 TMIT

Revenue – Cost = Margin

• Frequently revenue is generated at greater cost than payment. (margin negative revenue)

• Safety is becoming a discriminator for choice by educated consumers.

• Educated Consumers increasingly have portable financial resources and will reward best outcomes.

• Employers are demanding safety to award contracts

• Cost pressures are huge

• Adverse events generate great cost.

• Adverse events convert margin positive admissions to margin negative admissions.

• Optimal outcomes are generated at lower cost than worse outcomes.

• Spending (tech) wisely now can save cost later

• Greatest margin impact will be through cost reduction from optimal clinical and operational performance.

THERE IS A BUSINESS CASE FOR SAFETY …..

IT IS CALLED ECONOMIC SURVIVAL!

AND

IT MUST BE MADE AT THE STRATEGIC LEVEL

PRESENT

43© 2004 TMIT

Revenue – Cost = Margin

• Ongoing Monitoring Costs• Opportunity Costs• Billable time of care givers• Staff Back-fill, overtime• Paid administrative leave for the event• Patient productivity loss, lost pay, lost

employer administrative expenses• Equipment down that requires

cancellation of other volume• Lost recruitment costs• Joint Commission and Regulatory Costs

such as NRC, state licensing boards, medical boards, DEA

• PR Counter Measures• Internal Legal and Support Costs• Additional Length of Stay• Cost of outpatient care additional

rehab.

• Internal Operational Cost• Malpractice Claims Paid• Malpractice Insurance• Legal Fees• Expert Witness Fees• Copies/depositions/transcripts• Consultant Fees • Demonstrative Evidence• Lost Productivity• Counseling + Staff support• Mock Trials• Focus Groups• Cost of doing business for

malpractice insurance company• Cost to defend approx $35K• Post suit defensive medicine• Stop-loss insurance cost• Added Diagnostic +Therapeutic costs

© 2002 HCC, Inc.

Strategic Initiatives

Transaction Based Payment

Performance Based Payment

Time

Focus

Provider Options: Aggressive vs Passive Approach

© 2002 HCC, Inc.

Strategic Initiatives

Transaction Based Payment

Performance Based Payment

Time

Focus

Provider Options: Aggressive vs Passive Approach

Market Trajectory

© 2002 HCC, Inc.

Strategic Initiatives

Transaction Based Payment

Performance Based Payment

Time

Focus

Provider Options: Aggressive vs Passive Approach

Purchasers Demand Performance

Leapfrog & CMS (HCFA)

Shift market share to reward performance

Market Trajectory

© 2002 HCC, Inc.

Strategic Initiatives

Transaction Based Payment

Performance Based Payment

No Change Option

Time

Focus

Provider Options: Aggressive vs Passive Approach

Purchasers Demand Performance

Leapfrog & CMS (HCFA)

Shift market share to reward performance

Market Trajectory

© 2002 HCC, Inc.

Strategic Initiatives

Transaction Based Payment

Performance Based Payment

Present No Change Option

Time

Focus

Provider Options: Aggressive vs Passive Approach

Purchasers Demand Performance

Leapfrog & CMS (HCFA)

Shift market share to reward performance

Market Trajectory

Performance Option Now

© 2002 HCC, Inc.

Strategic Initiatives

Transaction Based Payment

Performance Based Payment

Present No Change Option

Time

Focus

Provider Options: Aggressive vs Passive Approach

Purchasers Demand Performance

Leapfrog & CMS (HCFA)

Shift market share to reward performance

Market Trajectory

Performance Option Now

Performance Option Later

© 2002 HCC, Inc.

Strategic Initiatives

Transaction Based Payment

Performance Based Payment

Present No Change Option

Time

Focus

Provider Options: Aggressive vs Passive Approach

Purchasers Demand Performance

Leapfrog & CMS (HCFA)

Shift market share to reward performance

Immediate Action Option• Risk: Expense• Benefit: Market Share

Market Trajectory

Performance Option NowPerformance Option Now

Performance Option Later

© 2002 HCC, Inc.

Strategic Initiatives

Transaction Based Payment

Performance Based Payment

Present No Change Option

Time

Focus

Provider Options: Aggressive vs Passive Approach

Purchasers Demand Performance

Leapfrog & CMS (HCFA)

Shift market share to reward performance

Immediate Action Option• Risk: Expense• Benefit: Market Share

Delayed Action Option• Risk: Lost Market Share and

loss of new opportunities. • Benefit: Delayed Expense

Market Trajectory

Performance Option Now

Performance Option Later

© 2002 HCC, Inc.

Strategic Initiatives

Transaction Based Payment

Performance Based Payment

Present No Change Option

Performance Option Now

Time

Focus

Provider Options: Aggressive vs Passive Approach

Purchasers Demand Performance

Leapfrog & CMS (HCFA)

Shift market share to reward performance

Immediate Action Option• Risk: Expense• Benefit: Market Share

Delayed Action Option• Risk: Lost Market Share and

loss of new opportunities. • Benefit: Delayed Expense

No Change Option• Risk: High risk of lost

share & survival impact• Benefit: No expense

Market Trajectory

Performance Option Later

53© 2004 TMIT

Communicating the Business Case for Patient Safety to the “C-Suite”

• Breaking News in Pay-4-Performance

• The “C-Suite” Perspective

• Building the Business Case

• Communicating to the “C-Suite”

54© 2004 TMIT

Financial ROI Calculation

Breakeven Years = Implementation Costs

Annual Benefit – Carrying Costs

Source: Mark Smith CIO University of Pennsylvania Health System

55© 2004 TMIT

ROI Example (Ambulatory EMR)ROI Example (Ambulatory EMR)

56© 2004 TMIT

ROI on PADE

• Estimated cost per preventable adverse drug event is $4,685.

• Estimated preventable ADE is 5 per 1000 patient days.• Published declines with CPOE range from 17% to 62%

decline depending on level of decision support sophistication

• 100,000 patient days, 50% reduction = 250 avoided • Potential annual savings of $1,171,250

Source: Mark Smith CIO University of Pennsylvania Health System

57© 2004 TMIT

• Breaking News in Pay-4-Performance

• The “C-Suite” Perspective

• Building the Business Case

• Communicating to the “C-Suite”

Surviving the No Outcome No Income Tsunami:

58© 2004 TMIT

Winston ChurchillWinston ChurchillWinston ChurchillWinston Churchill

““Wait just a moment Wait just a moment

while I review my while I review my

contemporaneous contemporaneous

comments”comments”

59© 2004 TMIT

Gen. John R. GalvinGen. John R. GalvinGen. John R. GalvinGen. John R. Galvin

““Don’t bring me problems; Don’t bring me problems;

bring me solutions.”bring me solutions.”

NATO SupremeNATO Supreme

Allied CommanderAllied Commander

““Don’t bring me problems; Don’t bring me problems;

bring me solutions.”bring me solutions.”

NATO SupremeNATO Supreme

Allied CommanderAllied Commander

60© 2004 TMIT

61© 2004 TMIT

62© 2004 TMIT

63© 2004 TMIT

64© 2004 TMIT