Prepared for the Foundation of the American College of Healthcare Executives

Session 69X Using Innovative Technology to

Drive Value

Presented by: Barton Sachs, MD, FACHE

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Barton L. Sachs, M.D., MBAChief of Staff & Special Assistant to CEOCo‐Director MUSC Innovation Center

Professor of Orthopaedics ‐‐Medical University of South Carolina

Using Innovative Technology to Drive Value

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Disclosure of RelevantFinancial RelationshipsThe following faculty of this continuing education activity has financial relationships with commercial interests to disclose:

Barton Sachs, MD, FACHE

• APP Squared LLC – Investor– Founder/CMO

• Globus Medical – Royalty- Consultant

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Barton L. Sachs

M.D., MBA

Chairman, CMO, Founder

Chief of Staff, Professor Orthopedics MUSC and BioEng.

Clemson; 3x Serial Founder

Matt Weismiller

CEO

Stryker Berchtold: CEO/GM; Hill-Rom: CTO,

CMO, Founder/SVP IT Division; 2x Turnaround-To-

Sale

Michael McEvoy

Dir. Product Development

Founder MustardSeed Software Agency; 16 yrs. Mobile App Development; Ten Commercial Healthcare

Apps

Nick Hofmeister

Co-Founder

5x serial founder; Triton, Sapphire; PSS; $250mm

raised: biotech, industrials, energy; Bain; MIT

Daniel Sachs

Co-Founder

4x serial founder; Triton Health, DECA Co; $250mm raised;

Majestic Realty; Harvard

70+ years healthcare industry

50+ years med device/life science

40+ years information technology

40+ years founding startups

45+ patents awarded

TEAMSeasoned healthcare entrepreneurial team with decades of success

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Learning Objectives• Attendees will understand issues related

to inability to track & monitor APP work activity.

• Attendees will learn some basic benchmark data referenced to APPs documented work.

• Attendees will hear of an innovative software system used to capture unforeseen institutional employer revenue in range of $ 6 million.

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• Introduction / Background

– Changes in Healthcare create needs & opportunity

• System Software Solution to meet need

• Snapp description

• Three components of “value position”

• Clinical trial data results – generated at AMC

• Value proposition confirmed

• Summary

Agenda

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Background Issues“Burning Platform”• We currently live in a market age of unstable

/disruptive healthcare.• Financial reductions

– CMS: Medicaid & Medicare

– Accountable Care Act (Insurance exchanges)

– Sequestration reductions

• Regulatory requirements to:

– maintain & advance quality of clinic care

– Reduce clinical service work hours of house-staff

• Government & Payer expectations for increased open patient access for care

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Triple Aim: How Do We Respond? • Meet situational requirements of:

– Expanding patient access to care

– Advancing & Improving Quality of service

– Reducing cost per unit of patient care

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New Age Healthcare Market Conditions

• Strategy Drivers– “can not win by simply becoming more

disciplined with current strategy of all patients seen by a physician at each patient encounter”

ref. “The Discipline of Market Leaders”. HBR. M.Treacy & F. Wiersema (1995)

• Focus on “game-changing innovation” (GCI)ref. “Big-Bang Disruption: A New Kind of Innovator”. L. Downes & P.F.

Nunes. HBR. Mar.2013; 44-56

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“Big Bang” Disruption• “Game-Changing Innovation” referred to

as “Big Bang Disruption” (BBD)• BBD holds immense potential for those

who can quickly learn new rules & manage service work in unstable market:– apply an undisciplined strategy,– respond to unconstrained market growth, &– apply new unencumbered developments.Ref. “Big-Bang Disruption: A New Kind of Innovator”. L. Downes & P.F.

Nunes. HBR. Mar.2013; 44-56

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MUSC Strategy Response

• Response to unstable & changing healthcare market

• MUSC needed to become a “Big Bang Disrupter” by applying:– Innovation

– Patient / Customer intimacy

– Operational excellence

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MUSC Opportunity for BBD APPs - Central Common Focus

• Solution to complex issues resides in expanding healthcare provider work force with:– Advanced Practice Providers (APPs)

• Nurse Practitioners (N.P.s)

• Physician Assistants (P.A.s)

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Current APP Utilization - Outpatient1. Independent Patient Schedule

• APP has their own schedule template of patients• Supervising MD is not present• APP should bill independently

2. APP working with physician in outpatient clinic and seeing own patients on own schedule profile

• Supervising physician is present in clinic• APP can bill independently or under the supervising MD

3. APP working with physician in outpatient clinic and seeing patients from the physician profile

• APP initiates the visit (history, physical); MD performs a problem focused exam• Visit is billed under the attending physician

4. Global Surgical Specialties• Work efforts are non-billable based on global service coverage

*APP should always record their clinical work effort in the EHR

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Current APP Utilization - Inpatient1. Acting as surrogate or extender for patient care in place of physician (attending

of record) -- this service may include global part of surgical service follow up care or daily administrative work for patient care such as discharge summaries, daily care rounds, etc.

• APP would not bill or invoice for clinical service provided

2. Providing clinical service care for patient in hospital such as: admission; daily care visit rounds (non-surgical patients); interventions, &/or procedures (e.g. line insertions, etc.)

• APP may bill for clinical care service if not employed by hospital

• Reference compliance algorithms

*APP should always record their clinical work effort in the EHR

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100806040200

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

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Q and A Percentile Rank

Pro

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ivit

y

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0.8A V G

HighHigh

Low

Below

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High

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High

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A V G

High

Below

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High

Low

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Below

A V GA V G

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Matrix Plot of Productivity vs Q and A Percentile Rank

Quality and Accountability Domain Metric WeightMortality Mortality Index 30%

Effectiveness Readmissions 25%Safety Complications 25%

Patient Centered Service Score 5%Efficiency Cost Index 10%Efficiency LOS Index 5%

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Snapp SummarySoftware to coordinate workflow of Advanced Practice Providers (APPs)

PERFORMANCE WORK MANAGEMENT

For hospitals and APPs

Captures billings, improves efficiencies,and reduces regulatory risk

$4B lost from Skilled

Nurses and Physician

Assistants’ (APPs)

inefficiencies and

missed billings

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APPs* (NPs + PAs) bridge our the increasing demand for healthcare services

Physician Provider

Supply

Healthcare Service Demand

Rapid increase in Advanced Practice Providers* to meet demand

*APPs; Nurses and Physicians Assistants

=

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Demand tailwinds APPs are the fastest growing U.S. healthcare provider group

Current APPs

With boomers aging,

healthcare demand will rise

80% over fifteen years

(>4% CAGR)

Severe shortage of >90,000

physicians by 2020

APPs already commonly

used to extend physician

capacity

305k

2012 2013 2014 2015 2016 2017 2018 2019 2020

245k

Current APPs

6.6% CAGR

390k

New APPs

Advanced Practice Providers (APPs) = Physician’s Assistants (PAs) and Nurse Practitioners (NPs)

“Varying Views on the Expanded Role of Advanced Practice Providers,” MD News, 9/1/16, retrieved 9/23/16

“Physicians Assistants: Occupational Outlook Handbook,” U.S. Bureau of Labor Statistics, 2015, retrieved 9/23/16

“Meeting the Demand for Primary Care: Nurse Practitioners,” AACN, October 2014, retrieved 9/23/16

305k

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AMC Strategic Advantage / BBD Advanced Practice Providers #3

APPs offer better “value” proposition

Value =

(Outcomes x Quality) / (Cost per unit care)

ref. Michael Porter. HBS

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Clinical Areas of Utilization of APPs• Outpatient

– Provide access for new (NP) & follow-up (FU) patients

– Improve flow of patients through clinic– Provide oversight of process continuum clinical care

• Inpatient– Provide improved continuum of care for patients– Improve discharge (D/C) planning & process time– Decrease re-admission after discharge– Improve clinical documentation & assure quality

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APP Re-Organization Advantages

• Develop new model for institutional clinical care & productivity

• Assures APPs working at high level of practice license & state standards

• Cultural shift of institutional perceptions for APP practice

• Advance “concept of team care” for patients: docs; house-staff; APPs; nurses; students; assoc. healthcare prof. (P.T.; O.T.; R.T.; dietary; Pharm.D.; etc.)

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Inefficiency> 50% of time is spent on administrative non-billable activities

Lost Billings

> 12% of billings are uncaptured due to documentation errors

Legal Risk

> Common practice for APPs to bill activities under physicians; a significant regulatory risk with potential for steep fines (CMS/OIG)

Hospitals can’t fix these

issues because there is

no system to track

and manage APP

activity

Economic losses are

huge: lost revenue is

$1.5 mm per hospital*,

and $4B nationally

*Assumes hospital = 100 APPs

ProblemCurrent practices leave revenue on the table and expose hospitals to risk of fines

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Three issues relative to APPs:Opportunity & Unmet Need in Healthcare

Lack of Benchmark Info -APP Staffing Management Lack of Benchmark Info -

APP Staffing Management

Lost or Misapplied Financial RevenueLost or Misapplied Financial Revenue

Employer Organization LacksCompliance Record

Employer Organization LacksCompliance Record

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Simple mobile app for rapid + easy APP data entry and

charge capture

Eliminates lost billings, cuts charting time, and reduces

coding issues

Data management, analytics, and reporting tools. Visual Dashboard

Enables supervisors to track performance, set targets/quotas,

and improve efficiency

SolutionSoftware for APP task entry, charge capture, and coding compliance

Providers (APPs) Managers

Winner                          2016     

Innovation Excellence Award

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Market sizingPotential financial benefit

$ 43 M / yr.

value created

$15,000 per APP/yr in value

1% utilization = ~2,900 APPs

(~30 hospitals, @ 100 APPs / hospital)

~ 288,000 APPs licensed in U.S.

5,600 hospitals in U.S.

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Architecture of the platform

Snapp iOS (#4)Snapp Android (#5)

Azure SQLDatabase (#1)Azure Mobile

Services (#2/#6)

Windows DesktopQuestion Generator(#3)

App Steps 4 & 5:Decision Engine LogsAPP/Physician Patient Encounter

Windows DesktopData Tools(#7)

Android: mobile “front‐end” collection iOS: mobile “front‐end” collection

Snapp database

“back‐end” reportcustomization

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Enter basic info for task as it is completed

Answer a few simple questions

System renders coding decision; APP approves.

Done in 7 seconds

SUBMIT CHARGE85% of Usual/Customary

Nurse Practitioner

TRICARE

Michael McEvoy

MUSC Tax ID.

Billing Level: 1

Billing Code: 99238

APP user interface:Easy, accessible, effective

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Demo Video

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Backend: admin userPowerful data analytics and visual management

Dashboard

• Track APP daily performance and take action as needed

• Views are by user, task, billing and compliance

• Drive achievement and teamwork through public display of performance

Admin Interface

• Set and achieve billing, productivity, and compliance targets

• Generate analytics, reports, and notifications

• Support auditing, internal and external

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Value StreamsSnapp’s pilot verifies the scale of inefficiencies, resulting in major opportunities

Reduce Lost Billings >12% of billable tasks not captured

DEMONSTRATED

Reduce Admin Overhead >50% of time spent on administration

DEMONSTRATED

Reduce Compliance Risk >11% of APP tasks incorrectly billed by MD

DEMONSTRATED

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Value creationPilot demonstrates Snapp creates ~$14,000 per APP in value for a user hospital

$ per APP/yr

$1.4 Million Revenue Per

Hospital*

> $4 BillionNationally

(*Assumes Hospital = 100 APPs)

6,200

5,500

2,000

13,700

Billings slippage TotalComplianceAdministrative inefficiency

Based on initial pilot product using only 36 codes; current product has over 600 codes results in higher

charge capture value

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Pilot trial objectives• Demonstrate that the issue exists and is

significant

• Quantify the opportunity for improvement

• Demonstrate that APPs do not document all their work in the EHR, and/or they do not capture all of the tasks and billing codes fully and accurately.

• Demonstrate that Snapp prevents compliance errors

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Pilot trial design

Term 30-60 days, depending on department

Departments additional depts = Endocrinology, Heme-Oncology, Pediatric Surgery, Neurosurgery, Orthopaedics

# of APPs 23 APPs enrolled in the trial use

Data set Encounters = 1,667Time = 1,472 hours (234 workdays)

Reconciliation Compared results of Snapp collections to Epic datafile for APPs (in each dept. of Ortho, Endo, and Heme-Onco)

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First step: market survey(75% response rate)

150 APPs MUSC

Outpat. Clinic

50% unbilled100% admin.

support service unbilled

In-Hosp.

90% unbilled

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Encounters

APP-BilledEncounters

Physician-BilledEncounters

UnbilledEncounters

Time

APP-BilledTime

Physician-Billed Time

Unbilled Time

Pilot data overview(5 departments – e.g. med. & surg.; in & out-pat.)

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40% 48%

12%

34%

15%

51%

18

4%

6%

6%1%

2%2%

EncountersNon-Clinical

Un-Billable

Global

No Charge

Other Insurance

Clinical Phone Call

AdministrativePhone CallUpdate Hx/ExamPaperworkFMLA Paperwork

4%

1% 4%7%

2%1%

TimeNon-Clinical Time

Un-Billable Time

Global Time

No Charge Time

Other Insurance Time

Clinical Phone CallTimeAdministrative PhoneCall TimeUpdate Hx/ExamPaperwork TimeFMLA PaperworkTime

Detailed data5 depts

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12%

16%

51%

81%

23.5%

6.6%

15.6%

54%

Billed ‐‐ APP

Billed ‐‐ Physician

Unbilled ‐ APP w/ patients

Unbilled ‐ APP admin activity

Results: APP time spent

Total Time = 1,472 hours (234 workdays)

Encounters Time

Billed ‐‐ APP 47.2% 23.5%

Billed ‐‐ Physician 10.4% 6.6%

Unbilled ‐ APP w/ patients 42.5% 15.6%

Unbilled ‐ APP admin activity 54.4%

Total 100.0% 100.0%

Problem identified

• 70% of all APP time is spent on non‐billed activities

• ~54.5% of all APP time is spent on administrative tasks

Opportunity for Snapp

• Track efficiency metrics for performance management of APPs

• Increase efficiency = reducing non‐billable time by speeding up APP processes

Time spent by avg. APP

Administration is >50% of APP workload

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Problem identified

• Admin time ~55% of all APP activities 

• If only 3% of total time were used for clinical/billable activities, it would be worth $6,200 in revenues per year per APP on average (10% increase)

• Top performing APPs spend the same amount of time on admin tasks as lesser performing APPs

Opportunity for Snapp

• Managers can shift APP time away from admin tasks and generate  10%+ increase in collections

3% efficiency gains are worth >$6,200/APP per year

Value of reducing admin time

$60,070

$99,827

$6,214

$10,877

Average APP Top APP

Actual collections Efficiency improvement

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312 

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Billable encounters

Snapp, additional

Epic

Billings slippage

Problem identified

• EPIC does not capture all APP billable events

• Some APPs are missing 16% of their billable events

• Average slippage is 9%

• Annualized, this is 85 total encounters / 72 hours per APP, or $16,333 per year

• Collections rate is 33%, therefore lost revenue is ~$5,500 per year 

Snapp Opportunity:

• Capture all billable events and eliminate slippage

340 9% of APP billings are not captured by Epic

• Lost billings 9% of total, loss of >$16k per APP annually

• With 33% collections rate, lost revenue is ~$5,500 per year

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Compliance risk

Problem identified

• In normal departments, 11% of APP encounters are misbilled to physicians 

• Certain APPs bill all (100%) of their encounters under a physician's name 

• This represents a major compliance hazard for the hospital, and could result in multi‐million dollar fines

Opportunity for Snapp

• Allocate billings to the correct provider, avoiding compliance risks

• >10% of APP encounters are incorrectly billed by physicians

• Estimated cost of this risk is ~$2,000/APP per year

352 40 

APP encounters tracked

by SnApp

Encounters misbilled to

physician in Epic

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MedAptus1Ingenious

MedicalPMD ZirMed MD Tech

2patientkeeper

Solution for APPs Experienced healthcare IT startup team Drives all three improvement levers Hospital earns majority of financial benefit

Simplicity of implementation and use

National selling partnerships

Competitive landscapeIndirectDirect

Little direct competition; Snapp is a superior, full‐spectrum solution

1Acquired by North Bridge Oct. 20142Acquired by HCA Sept. 2014

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Compliance ConsiderationsSnapp is designed to improve compliance, not encourage misuse and fraud

Snapp uses a number of mechanisms to prevent errors and fraud

• The application engine matches encounters, payors, and APPs in legitimate combinations only to reduce errors and false coding.  

• The engine checks for and eliminates keystroke errors and double entries.

• The application produces a summary report on the users mobile device so that each APP can check their daily entries for accuracy and completeness and against the data in the electronic health record.

• Most importantly, the application produces a comprehensive detail time‐stamped record that is easily audited with internal resources to identify potential fraud.  The auditable information is not currently available without the application.

• The application cannot prevent all billing errors.  If a physician instructs an APP to not bill an encounter that the APP completed, the system cannot prevent that fraud.  An audit will likely be able to identify this fraud after the fact.

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Client ROI of 300% = $1.05 million in margin (per 100 APPs)

Compliance

Admin

Billing

Cost Value

$3,500

$14,000

330% ROI

$ Per APP/Yr

Client Return300% makes Snapp a clear-cut purchase decision for hospitals

Highly Attractive Purchase

• High ROI > 250%

• Low entry fee, costs are

primarily monthly expense

• Simple SaaS implementation

• Small # of users

• Low maintenance

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MedAptus1Ingenious

MedicalPMD ZirMed MD Tech

2patientkeeper

Solution for APPs Experienced healthcare IT startup team Drives all three improvement levers Hospital earns majority of financial benefit

Simplicity of implementation and use

National selling partnerships

Competitive LandscapeIndirectDirect

Little direct competition; Snapp is a superior, full‐spectrum solution

1Acquired by North Bridge Oct. 20142Acquired by HCA Sept. 2014

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MarketLarge market, strong interest, immediate access

~5,600 hospitals in the U.S., with 305,000 APPs

Estimated 1,400 hospitals (22%) with >100 APPs

Advanced discussions with healthcare national aggregators to regional network organizations

Potential to deploy to >400 hospitals, representing a $250 mm revenue opportunity

Management team has direct relationships with >25 major hospitals / networks

Represents $50+ mm revenue opportunity

Current engaged 4-5 initial partnerships

Next target acute care facilities deploying 25-100 APPs

Quickly extend sales efforts to very large institutions with >200 APPs

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New CEO (Matt Weismiller)

• 35 years in health IT / med. devices:

management, strategy, R&D, and sales

• Led two successful exits, including

recent $172 mm sale to Stryker

Successful Live Customer

Pilot at MUSC

Multiple customers

engaged for early

partner implementations

Mobile app v5.0, web

interface/dashboard

v2.0 in development

Seed Round Anchor

($200k) Committed,

Closed mid November

Product Developed

v1.0-v4.0

TractionMajor milestones met over two years; progressing rapidly

Winner of 2016 Vizient Innovation Excellence

Award; visibility/access to 3,000+ hospitals

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Seasoned healthcare

entrepreneurial team with decades

of success

$1 billion and growing market

Powerful and differentiated

solution drives improvement in

all three value streams

Hospitals realize $ millions in

new revenue and margin

SnappTHE FIRST PERFORMANCE WORK MANAGEMENT SOLUTION FOR APPs

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Barton L. Sachs, M.D., MBA, FAAPL, FACHEMedical University of South Carolina

sachs@musc.edu

Bart Sachs, M.D. is the Director of Medical University of South Carolina Health System 

Innovation Center (MUHIC.)  He holds fellowship in American College of Physician 

Executives and American Assoc. Physician Executives.  As an Orthopaedic spine 

surgeon, he maintains fellowship status in American Academy of Orthopaedic 

Surgeons, American College of Surgeons, and American College of Spine Surgeons.

Dr. Sachs received the South Carolina ACHE Regents Award for 2015 Senior Leader.  

Under his leadership, MUHIC at MUSC received Vizient's 2016 Top Award for 

Innovation Excellence from their 3,000 hospital membership.  He has promoted 

innovative ways to reshape MUSC health provider workforce, thru more efficient use 

of Advanced Practice Providers.  Dr. Sachs has been instrumental in leading MUSC 

through many innovations and improvements in access, quality, cost effectiveness, 

safety, efficiency, and supply chain management.  One project demonstrated $5.5m 

savings over five years for surgical spine implants. 

SnApp   ‐‐ bart@snapptec.com

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Bibliography/References• Optimizing Advanced Practitioner Charge Capture in High-Acuity Surgical

Intensive Care Units. Butler KL, Calabrese R, Tandon M, Kirton OC. Arch. Surg./Vol.146 (#5), May 2011; 552-555

• Avoiding Charges of Fraud & Abuse: Developing & Implementing an Effective Compliance Program. Bolin JN, Clark LS. J.Nursing Admin.; Vo.34, #12; Dec.2004, 546-550

• The Productivity of Physician Assistants 7 Nurse Practioners & Health Work Force Policy in the Era of Managed Health Care. Scheffler RM, Waitzman NJ, Hillman JM. J. Allied Health. Sum. 25(3), 1996, 207-17

• State False Claims Act Reviews. An Official Website of U.S. Gov. effective Mar. 15, 2013 https;//oig.hhs.gov/fraud/state-false-claims-act-reviews/index.asp

• Physician Assistant & Nurse Practitioner Utilization in Academic Medical Centers. Moote M, Krsek C, Kleinpell R, Todd B. Am. J. Med, Quality. Pub. May 9, 2011

• Effective Utilization of Physician Assistants (PAs) & Best Practice in Billing & Reimbursement. Pagel JK, Powe, M. white-paper report. June 16-18, 2014

• Big-Bang disruption: A New Kind of Innovator. Downes L & Nunes PF. HBR. Mar. 2013; 44-56

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Thank you

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