The heart and science of medicine.

UVMHealth.org

Electronic Health Record Replacement Project

Green Mountain Care Board

November 6, 2017

Agenda

• Introductions and overview

– John R. Brumsted, MD, President and CEO, UVM Health Network, and CEO, UVM Medical Center

• Project Overview

– Adam Buckley, MD, MBA, Chief Information Officer, UVM Health Network

• Panel Discussion: How a Unified EHR will Impact Patient Care

– Betty Diette, Patient

– Kate Fitzpatrick, DNP, RN, NEA-BC, FAAN, Chief Nursing Officer, UVM Medical Center

– Anna Hankins, MD, Pediatric Primary Care (Barre), CVMC

– Fred Kniffin, MD, President, Porter Medical Center

– Wouter Rietsema, MD, VP, Chief Quality & Information Officer, CVPH

• Project Costs & Implementation

– Marc Stanislas, VP, Treasury & Finance, UVM Health Network

– Matt Abrams & John Waters, Cumberland Consulting Group

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The University of Vermont Health Network

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Number of physicians 1,219

Number of RNs 2,759

Staffed beds 936

Inpatient discharges 40,559

Patient visits 1,807,764

ED visits 171,989

OR cases 34,626

Lab visits 4,606,466

STATISTICS - ALL NETWORK MEMBERS (FY 2016)

UVMHealth.org

Project Overview

Project Description

• Replace existing, disparate and outdated HIT systems at four UVM Health Network hospitals with a unified EHR from Epic Systems

• Capital cost: $112.4 million

– $109.3 million capital expenditures

• Software, hardware, implementation, internal and external staffing, training, data conversion

– $3.1 million capitalized interest

5

What is an Electronic Health Record (EHR) and What

are We Proposing?

• EHR consists of all important patient information

- Health and clinical information, registration, billing, scheduling, and

insurance

• The UVM Health Network is proposing a unified EHR

– The project is to implement a connected system called Epic for four

network hospitals:

• University of Vermont Medical Center

• Central Vermont Medical Center

• Champlain Valley Physicians Hospital

• Porter Medical Center

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Many UVMHN Systems are Outdated

and Need Replacement

• Each UVM Health Network hospital has different systems for medical, billing, and scheduling, some more than 20 years old

• Many of these systems have reached the end of their useful life and need replacement or updating

• The existing systems do not guarantee that all necessary information is available when and where it is needed

• Multiple systems with multiple log-ins and interfaces puts undue burden on patients and their families

• This hinders our ability to measure outcomes effectively and standardize care in order to improve the overall health of Vermonters and slow the growth of health care costs

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Current State of EHR at UVMHN is Complex

and Disjointed for our Patients and Providers

STATE REGULATORY AUTHORITIES

MEDICAL GROUPS

AND OUTPATIENT

NURSING HOME AND

REHABILITATION

HOME HEALTH / AND SOCIAL WELFARE /

FAMILY SUPPORTPHARMACY AND

PRESCRIPTION

LABORATORY

AND DIAGNOSTIC

MEDICAL GROUPS

AND OUTPATIENT

HOSPITALS AND INPATIENT

EMERGENCY

RESPONSE /

TRANSPORT

8HOSPITALS AND INPATIENT

The Hodgepodge

Organization

Inpatient

Clinical

System

Inpatient

Financial

System

Ambulatory

Clinical

System

Ambulatory

Financial

System

Clinical Ancillary

Systems

UVM Medical Center Epic GE Epic GE Optum (OR)

Sunquest (lab)

GE (imaging)

CVMC Meditech Meditech eClinical

Works

eClinical

Works

Picis (ED)

Philips (imaging)

Merge (cardiology)

CVPH Soarian Soarian GE

Medent

Paper

Soarian

Medent

None

ORSOS (OR)

Sunquest (lab)

Siemens (imaging)

McKesson (cardiology)

Porter Meditech Meditech Meditech

LSS/MPM

Meditech

LSS/MPM

MedHost (ED)

Philips (imaging)

ECS (nursing home)

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How will a Unified EHR Impact Patient Care?

• Betty Diette

– Patient

• Kate FitzPatrick, RN

– Chief Nursing Officer, UVM Medical Center

• Anna Hankins, MD

– Pediatrician, UVM Health Network – CVMC

• Fred Kniffin, MD

– President & CEO, UVM Health Network – Porter Medical Center

• Wouter Rietsema, MD

– Chief Quality & Information Officer, UVM Health Network – CVPH

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UVMHealth.org

Project Costs & Implementation

Cost to Maintain, Update and Replace Existing

Systems Separately

• Done independently, it could cost up to $200 million for

the four hospitals to upgrade their own systems and

would lack the network connectivity

• It will cost $151 million over 6 years to move the four

network hospitals to a unified EHR system

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Implementation Timeline

13

Project Safeguards

• We will draw from the UVM Medical Center’s successful Epic clinical installation 10 years ago

• We have conducted a review of Epic installs nationally to understand implementation challenges

• Rigorous internal and external safeguards

– Expert project management

– Specialized internal governance

– Robust public transparency and accountability

– Thorough training and testing before activation

– Adequate contingency

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“Total Cost of Ownership”

• TCO model captures all costs and savings associated with an HIT project over a defined period of time

– “Best practice” for understanding true costs of a project

• TCO modeled for a six-year period (includes implementation and post-implementation period)

– $151.7 million net cost over six years (capital and operating combined)

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Introduction to the TCO

• The UVMHN Total Cost of Ownership (TCO) for the Epic project was developed with input from each organization, Epic and Cumberland

• The TCO is comprised of several different cost categories which together make up the capital and operating expenses associated with the project over a six-year period

• The model’s intent is to include all incremental capital and operating costs associated with the transition to Epic

• The following slides provide an overview of what is included in each of the six cost categories

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Overview of TCO – Capital Costs

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Capital Cost Category What's Included? Methodology/Data Source 6 Year Total Cost

Epic Software Costs One-time licensing fees Epic pricing quote

14,361,500$

Epic Implementation and

Travel Costs

Epic's implementation services (fees and expenses) Epic pricing quote

15,241,619$

Required 3rd Party

Software

Database license for Caché operating environment Epic pricing quote

2,661,746$

UVMHN Internal Staffing Internal staff who will serve as PM's, Team Leads and Analysts Epic and Cumberland best practices tailored to UVMHN's project needs - 69

total resources over 40 months 11,800,641$

External Staffing Cumberland staff who will serve as PM's, Team Leads and

Analysts

Epic and Cumberland best practices tailored to UVMHN's project needs - 40

total resources over 40 months 36,385,100$

Epic and Network Related

Technology Costs

Network and infrastructure upgrades and additional hardware

and interfaces

UVMHN analysis based on Epic requirements

16,306,139$

Facilities, Communications

and Travel

Space for implementation and training, communications to

stakeholders and patients

Local estimates used for space planning. Stakeholder and patient engagement

estimates provided by Communications department 1,215,145$

Pre-Implementation -

External Staffing

Cumberland staff who will serve as work stream PM's during

pre-implementation

Cumberland best practices for pre-implementation work - 8 total resources

1,458,180$

Contingency 9.9% contingency to account for any unforeseeable capital

project costs

Industry standard for similar size and scope projects

9,824,746$

109,254,817$ Total

Overview of TCO – Operating Costs

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Operating Cost

Category What's Included? Methodology/Data Source 6 Year Total Cost

Epic Software Costs Annual maintenance costs for new Epic modules Epic pricing quote

7,986,133$

Required 3rd Party

Software

Annual maintenance costs for Caché operating environment Epic pricing quote

2,632,375$

UVMHN Internal Staffing Internal staff for long-term support and training during

implementation

Epic and Cumberland best practices tailored to UVMHN's project needs - IS

staff for training and long-term support plus Super Users 26,808,920$

External Staffing Cumberland staff who will design training materials and train

end users

Epic and Cumberland best practices tailored to UVMHN's project needs - 23

total resources over 40 months 2,832,750$

Epic and Network Related

Technology Costs

Annual maintenance costs for technology UVMHN analysis based on Epic requirements

35,429,681$

Facilities, Communications

and Travel

Travel costs for Epic certification training, training hours for

clinical end users and maintenance of leased training facilities

Travel costs based on expected staff traveling to/from Verona, WI. Training

hours based on actual end user counts and estimated training requirements 2,391,543$

UVMHN Staffing Offsets Savings for employees currently working on legacy systems

that will be replaced by Epic

Actual counts of employees currently supporting legacy systems

(31,016,221)$

UVMHN Legacy System

Offsets

Savings in annual maintenance costs for legacy systems that

will be replaced by Epic

Based on line item annual maintenance costs for each system being replaced.

Savings were not applied until system is expected to be fully sunset (12,434,933)$

Contingency 10% contingency to account for any unforeseeable operating

project costs

Industry standard for similar size and scope projects

7,808,140$

42,438,387$ Total

Cost and Funds Flow

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6-Year Summary of Epic Costs & Funds Flow

Total

University of Vermont

Health Network

(UVMHN)

University of Vermont

Medical Center

(UVMMC)

Central Vermont

Medical Center

(CVMC)

Porter

Medical Center

(Porter)

Champlain Valley

Physicians Hospital

(CVPH)

Total Capital Costs1 $109,254,817 $109,254,817 $0 $0 $0

Total Operating Costs2 $85,889,541 $85,889,541 $0 $0 $0

Subscription Fees3 $0 ($30,744,948) $9,403,958 $4,734,147 $16,606,843

Total System & Staffing

Offsets4 ($43,451,154) ($27,101,902) ($4,322,229) ($2,748,998) ($9,278,024)

Total Net Capital &

Operating Cost of Epic

Implementation

$151,693,203 $137,297,507 $5,081,729 $1,985,148 $7,328,819

Footnotes:

1 UVMMC as the licensee has all the capital costs. Amount shown does not include capitalized interest.

2 UVMMC as the Epic licensee will be allocated all operating costs.

3 The UVMHN hospitals reimburse UVMMC for their share of the operating costs.

4 Staffing & system offset savings generated from Epic implementation.

Financial Projections

• 10-year financial models built for UVMHN and UVMMC

– FY 2016 used as base year, FY 2017 based on budget (modified for known margin adjustment items)

– FY 2018 – FY 2025 projections

• Operating margin between 2.6% - 3.5%

• Staffing growth between 0.6% - 1.0%

• NPR growth between 3.4% – 3.5%

• Expense Savings of $75M by FY 2023

– Will refresh financial model and assumptions annually

• Assessed financial metrics to determine operational efficiencies necessary to maintain “A” rating

• Tested financial model and assumptions with Ponder & Co., a leading national health care financial advisor, for independent review

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Deloitte Report

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Summary

• This is a necessary and important update to EHR systems for patients

• Higher-quality, safer care for patients

• Greater collaboration and care coordination with our partners

• Industry standard for regulatory compliance

• Carefully planned and budgeted to not raise costs for patients

• Rigorous internal and external safeguards to mitigate and address risks

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