Improving clinical quality and sharing the profits with your physicians.In the world of health care today, it is widely recognized that quality initiatives must be implemented to: * Reduce needless mortality and morbidity morbidity /mor·bid·i·ty/ (mor-bid´it-e) 1. a diseased condition or state. 2. the incidence or prevalence of a disease or of all diseases in a population. mor·bid·i·ty n. * Provide best practice care * Reduce variation in methods of care * Develop a reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. system that rewards best practices and penalizes unacceptable and unnecessary care * Reduce costs through substantial elimination of overuse overuse Health care The common use of a particular intervention even when the benefits of the intervention don't justify the potential harm or cost–eg, prescribing antibiotics for a probable viral URI. Cf Misuse, Underuse. and misuse of health care resources The health care industry cannot sidestep side·step v. side·stepped, side·step·ping, side·steps v.intr. 1. To step aside: sidestepped to make way for the runner. 2. these changes. As a result, "pay-for-performance See pay-per-click. " initiatives by insurers and employers that offer some form of financial incentive to either physicians or hospitals for delivering the "right kind of care" are quickly spreading throughout the country. These initiatives, however, have not yet been applied to hospitals and physicians working together because of perceived practical difficulties in collaborative col·lab·o·rate intr.v. col·lab·o·rat·ed, col·lab·o·rat·ing, col·lab·o·rates 1. To work together, especially in a joint intellectual effort. 2. physicianhospital relationships and various legal impediments IMPEDIMENTS, contracts. Legal objections to the making of a contract. Impediments which relate to the person are those of minority, want of reason, coverture, and the like; they are sometimes called disabilities. Vide Incapacity. 2. . But they'll they'll Contraction of they will. they'll will be commonplace soon. Who's who's 1. Contraction of who is. 2. Contraction of who has. who's who is or who has who's short for who is, who has. behind the demand? Six industry forces are supporting new and wide-ranging wide-rang·ing adj. Covering a wide area; including much: a pianist's wide-ranging repertoire; a wide-ranging interview. demands on hospitals and physicians for patient safety and clinical performance improvements. 1. Scientific leaders -- The IOM's 1999 report. "To Err is Human "To Err is Human: Building a Safer Health System" is a groundbreaking report issued in 2000 by the U.S. Institute of Medicine which resulted in an increased awareness of U.S. medical errors. The push for patient safety that followed its release currently continues. ," which focused on clinical quality, patient safety and avoidable deaths in hospitals, led to a continuing series of IOM IOM See: Index and Option Market reports calling for key changes in the organization, delivery and reimbursement of hospital-based care. 2. Buyers -- The Leapfrog Group, one of the nation's leading employer coalitions, adopted some of the IOM's recommendations and is focusing its efforts on the adoption of quality and safety standards Safety standards are standards designed to ensure the safety of products, activities or processes, etc. They may be advisory or compulsory and are normally laid down by an advisory or regulatory body that may be either voluntary or statutory. for hospital care, payment programs based on incentives and rewards, public recognition and a shift of volume to hospitals and doctors who meet Leapfrog standards. 3. Financial intermediaries Financial intermediaries institution that provide the market function of matching borrowers and lenders or traders. -- Insurers, managed care organizations and the Centers for Medicare and Medicaid Services The Centers for Medicare and Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), is a federal agency within the United States Department of Health and Human Services (DHHS) that administers the Medicare program and are implementing pay-for-performance programs that provide rewards for physicians and hospitals that meet their established quality and cost targets. 4. Consumers -- Patients are becoming more empowered through easy access to performance-related information on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and are being put more at risk for the cost of their health care benefits as their employers shift to defined contribution plans Defined contribution plan A pension plan whose sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants. Related: Defined benefit plan . 5. Technology vendors -- The use of continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. evolving hi-tech hi-tech adj. Variant of high-tech. hi-tech Adjective using sophisticated, esp. electronic, technology Adj. 1. capabilities such as computerized computerized adapted for analysis, storage and retrieval on a computer. computerized axial tomography see computed tomography. physician order entry, electronic medical records, clinically oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. information systems, evidence-based protocols and clinical process redesign re·de·sign tr.v. re·de·signed, re·de·sign·ing, re·de·signs To make a revision in the appearance or function of. re , while expensive, are becoming almost mandatory to meet the expectations of purchasers. 6. Capital markets -- Lenders are quite willing to make investment capital available for these investments to credit-worthy adj. 1. having an acceptable credit rating; worthy of having credit extended; as, a credit-worthy customer s>. hospitals, and credit-worthiness is best demonstrated by a track record that shows consistently above-average returns on such investments. The measurements of quality Health care technology vendors are offering hospitals an array of sophisticated computerized information systems that support proactive management of the clinical care process. Severity-adjusted comparisons of clinical quality at the subspecialty subspecialty, n a limited portion of a narrowly defined professional discipline. E.g., surgery is a specialty of medicine and pediatric vascular surgery is a subspecialty. level permit physicians and managers to identify poor outcomes and then set priorities for the investment of scarce staff time and resources to redesign clinical pathways clinical pathway Critical pathway, treatment pathway Clinical medicine A standardized algorithm of a consensus of the best way to manage a particular condition Modalities used Teletherapy, brachytherapy, hyperthermia and stereotactic radiation. that obtain the greatest return on investment in terms of improved clinical outcomes and cost per case. (Figure 1) Similar comparisons of outcomes among physicians can allow a hospital to identify which have better/worse outcomes and test hypotheses on relationships between differing practice patterns and outcomes. At the payer level such comparisons permit hospital managers to identify problems with contract terms, payment rates and cost per discharge that can be used to reveal unexpected numbers of denials, serve as a basis for renegotiating some contract terms, or even focus on resource consumption patterns. Moreover, such comparisons may allow managers to negotiate better payment terms so that the hospital, as the investor in quality improvement initiatives, will share the return on investment with the payer. Direct physician involvement is an absolute must in accomplishing clinical performance improvements, some of which are directly physician-driven (such as over-ordering imaging studies) while others are a function of the hospital's operating policies (such as delays in reporting imaging results). In either case, physician understanding and support is critical to identify, implement and monitor improvements. (See figures 2 and 3 for examples of clinical performance measures.) Quality gain sharing takes root Quality gain sharing programs are being developed to actively engage physicians in the clinical improvement process and overcome their frequent lack of interest and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. resistance to participating in hospitals' quality improvement efforts. Four factors are key to the success of gain sharing: 1. A sufficient number of improvement opportunities 2. Available cost savings to be shared with participating physicians 3. Ongoing objective measurement and monitoring to assure that the results support the performance improvement goals and merit sharing of related cost savings 4. An appropriate legal framework The program's success is based directly on achieving measurable cost savings that are tied directly to clinical performance improvements. To accomplish this, the program: * Clearly identifies process improvement targets * Is built on a foundation of explicit performance measures, computerized monitoring systems, accurate clinical process and outcome data, and ongoing evaluation of clinical quality improvements, care process changes and cost savings * Develops a payment distribution policy with participating physicians * Formalizes legal and contractual relationships between the hospital and participating physicians * Requires that predetermined pre·de·ter·mine v. pre·de·ter·mined, pre·de·ter·min·ing, pre·de·ter·mines v.tr. 1. To determine, decide, or establish in advance: quality improvement thresholds are met before cost savings can be shared * Provides explicit safeguards that neither quality nor needed services will be diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. Potential limitations in customizing a quality gain sharing program must also be considered: * Sophisticated clinical and financial information systems are needed to monitor and manage the incentive payment program * Incentive payments may not be sufficient to change physician behaviors * Special arrangements will likely be necessary to reward physicians who already comply with targets for clinical outcomes * Potential legal and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. need to be addressed, including those related to the civil money penalty statute, anti kickback The seller's return of part of the purchase price of an item to a buyer or buyer's representative for the purpose of inducing a purchase or improperly influencing future purchases. law, Stark Law Stark law Physician self-referral law, 42 USC 1395nn Medicare A law that prohibits a physician from making a referral to an entity with which she or her immediate family has a financial relationship if the referral is for the furnishing of designated health and tax-exempt tax-ex·empt adj. 1. Not subject to taxation, as the capital or income of a philanthropic organization. 2. Producing interest that is exempt from income tax: tax-exempt bonds. n. hospital laws * Life expectancy Life Expectancy 1. The age until which a person is expected to live. 2. The remaining number of years an individual is expected to live, based on IRS issued life expectancy tables. for sharing of savings for a specific improvement initiative is generally limited to two or three years Although most, if not all, members of a hospital's medical staff may be eligible to participate in a quality gain sharing program, some groups of physicians may be better candidates during the initial phase of the program. For example, hospital-employed physicians (including hospitalists), physicians in specialties that are procedure-oriented or who are generally comfortable using clinical protocols, and physicians/groups who champion clinical improvement efforts, are all likely to be well-suited to participation in early efforts. There are many opportunities to engage physicians in valid clinical improvement activities for a gain sharing program. Examples include the creation and application of evidence-based clinical protocols, utilization and participation in quality education sessions, routine screenings and participation in provider recognition programs. (Figure 4) Sharing the cost savings with participating physicians could include an established fair-market value fee for a physician's participation in the creation of evidence-based clinical protocols, provider recognition protocols or education programs. If the physicians participate in a clinical protocol that results in quality improvements and significant cost savings, the physicians could participate in a percentage of the cost savings so long as: * The quality improvements and clinical cost savings are monitored and certified See certification. by independent third parties * The payments to the physicians are not based on the volume or value of services * The payments are at fair market value and satisfy the legal requirements Obeying the law Compliance is required to ensure that the payments made to the physicians as part of a quality gain sharing initiative meet relevant regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. . Here are some issues to consider: 1. Clinical and financial transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. of quality indicators: * Use of specific, objective, generally accepted clinical indicators clinical indicator Patient care An objective measure of the clinical management and outcome of Pt care * Separate calculation for each quality indicator 2. Safeguards against adverse impact on patient care: * Based on credible, objectively measured medical support * Ongoing monitoring and measurement The Monitoring and Measurement (MOME) initiative is a coordinating action within the 6th framework of the European Commission. It is aiming at fostering knowledge on Internet monitoring tools and exchange of information about Internet data traces. by independent third parties to determine the program's success and to confirm that the program is not having an adverse impact on clinical outcomes 3. Safeguards against disproportionate dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por federal health care program
costs:
* Absence of procedures that are disproportionately dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis pro·por performed on
federal health care program beneficiaries
* Payments to the physicians based on all procedures with respect to each performance indicator regardless of the patients' insurance coverage * Capping potential savings * Calculations based on the hospital's actual out-of-pocket out-of-pock·et adj. 1. Calling for the spending of cash: out-of-pocket expenses. 2. Lacking funds: hungry, cold, and out-of-pocket travelers. Adj. acquisition costs and not on accounting conventions * Absence of steerage steer·age n. 1. The act or practice of steering. 2. Nautical a. The effect of the helm on a ship. b. The steering apparatus of a ship. c. 4. Safeguards against inappropriate reductions in service: * Use of objective historical and clinical measures * Use of baseline The horizontal line to which the bottoms of lowercase characters (without descenders) are aligned. See typeface. baseline - released version thresholds 5. Meaningful patient and physician disclosure and freedom of choice * Use of a program mission statement * Voluntary physician participation * Termination of physician participation if non-compliant * Disclosure of program in writing to patients 6. Limitations on financial incentives to participating physicians: * Payments may only be made to physicians participating in the quality gain sharing program if the quality of care at the hospital is improved as evidenced by satisfying the pre-established quality goals and the cost savings are generated as a result of the program * Financial incentives to physicians are reasonably limited in duration * Fair market-value compensation is defined in advance with the physicians * Payments are based on quality results, not cost savings * Program is not used to attract new referring physicians or to increase referrals from existing physicians * Total savings are limited by meeting appropriate utilization standards Designing a quality gain sharing program The work involved in testing the readiness of the hospital and its physicians to undertake a gain sharing program, developing the final design, implementing the program and continuously monitoring its operations is relatively complex and time consuming. In general, hospitals and physicians should undertake a five-step readiness/pilot/feasibility study before considering full-scale full-scale adj. 1. Of actual or full size; not reduced: a full-scale model. 2. Employing all resources; not limited or partial: implementation of a program. (See Figure 5) Even though the implementation of a quality gain sharing program may require a substantial investment of time and resources, the return on investment in improved clinical quality and financial performance can be considerable. (Figure 6)
figure 1 Severity-Adjusted Comparisons of Clinical Quality and
Efficiency at the Subspecialty Level Permit Managers to Identify Poor
Outcomes
Inpatients by Product Line Clinical Quality
(Subspecialties) Rates above/below expected value:
severity adjusted
Mortality Complications Length
Rate* Rate* of Stay*
All Product Subspecialties -16 -5 +9%
General Surgery -8% -12% -2%
Complicated Newborns +2% +21% +24%
Cardiac Catheterization -92% -6% +11%
Surgical Oncology +48% -1% +16%
Inpatients by Product Line Economic Efficiency
(Subspecialties) Financial Results
Net Revenue Total
Margin* Profit/(Loss)
All Product Subspecialties -9% ($6,805,000)
General Surgery +5% $411,000
Complicated Newborns -13% ($383,000)
Cardiac Catheterization -27% ($876,000)
Surgical Oncology -38% ($672,000)
*Clinical quality values greater than zero are not desirable. Negative
financial results are not desirable
figure 2 Benchmark Comparisons of Clinical Practices, Outcomes and Costs
Medically Managed Acute Myocardial Infarction
Best Practices
Regional Top
Aspirin within 84% 94%
Beta blocker 71% 84%
Cardiac rehab 15% 21%
Use of statin 47% 54%
Clinical Outcomes
Regional Top
Readmission rate 14% 10%
Mortality rate 9% 7%
Length of Stay
Regional Top
ALOS 5.6 5.2
Cost per Discharge
Regional Top
Avg. total cost per discharge $6,495 $6,721
Avg. variable cost per discharge $3,555 $3,274
Note: Table made from bar graph.
figure 3 This Hospital's Mortality Rate Can Be Reduced 17% While Its
Costs Are Cut by $553,000 in This AMI Example
Template for Estimating Potential Benefits of Improving Clinical
Quality/Efficiency and Quality Gain Sharing for a Regional Medical
Center (RMC) and its Physicians
Potential Improvements Required Changes in Number of
in the Clinical Quality Related Care Process RMC
and Efficiency of and Physician Discharges in
Patient Outcomes Behaviors (Up to 5) FY2002
Acute myocardial * Follow pathway
infarction inpatients with and order sets during
PCI: hospitalization
* Reduce inpatient * Aspirin within 24
mortality from 8.9% hours of arrival
* Reduce readmission * Beta blocker within 940
rate from 14.3% to 24 hours
10.2%
* Reduce length of * Increase use of
stay from 4.4 to 4.0 cardiac stepdown
days
* Start cardiac rehab
before discharge
Potential Improvements Estimated Benchmark Potential
in the Clinical Quality RMC Variable For Variable Total Cost
and Efficiency of Cost Per Cost Per Savings for
Patient Outcomes Discharge Discharge RMC
Acute myocardial
infarction inpatients with
PCI:
* Reduce inpatient
mortality from 8.9%
* Reduce readmission $3,862 $3,274 $552,700
rate from 14.3% to
10.2%
* Reduce length of
stay from 4.4 to 4.0
days
figure 4 Some Examples of Performance Improvements that Would Support
the Payment of a Quality-Related Bonus to Participating Physicians
[check] Diabetes Provider Recognition Program (ADA/NCQA)
[check] Patient Education Programs
[check] Establishment of Clinical Information Programs in offices
(Electronic medical records etc.)
[check] Breast Cancer Screening
[check] Childhood Immunizations
[check] Following nationally recognized clinical care pathways for
certain diseases (e.g., administering aspirin to heart attack
victims within set time frame)
figure 5 This Approach to Developing a Quality Gain Sharing Program
Calls for a Wide Range of Skills, Teamwork and Effective Project
Management
Analytical and Design Tasks Clinical Care Management
Process Physician Consultant
1. Analyze Situation and Quality
Sharing Possibilities:
* Identify clinical process Shared Shared
improvement possibilities
* Consider relevant performance Shared Shared
measures
* Sketch out payment model for Shared Shared
physicians
2. Evaluate Anticipated
Financial Results:
* Analyze related resource Collateral Lead
consumption and financial data
* Estimate financial Collateral Lead
consequences of possible
quality improvements
* Establish hospital-funded Collateral Shared
budget
* Estimate size of physician Shared Shared
payment pool
3. Assess Readiness for
Quality Sharing:
* Clinical opportunities Lead Collateral
* Physician readiness Lead Collateral
* Organizational readiness Collateral Lead
* Clinical tracking Lead Collateral
* Financial tracking Collateral Lead
4. Design the Quality
Sharing Program:
* Clinical process Lead Collateral
improvement targets
* Performance measures Shared Shared
and monitoring
* Distribution criteria and Shared Shared
payment methodology
* Legal and contractual Collateral Collateral
relationships
5. Coordinate/Manage Activities
and Launch Program
* Sequence tasks and Collateral Lead
input/output relationships
* Finalize workplan, Collateral Lead
responsibilities and schedule
* Coordinate tasks, inputs Collateral Lead
and outputs
* Keep project on schedule and Collateral Lead
report on status
* Maintain project budget -- Lead
records
* Prepare program description Shared Shared
and final report
Analytical and Design Tasks Legal Counsel Hospital
Management
1. Analyze Situation and Quality
Sharing Possibilities:
* Identify clinical process Collateral Shared
improvement possibilities
* Consider relevant performance Shared Shared
measures
* Sketch out payment model for
physicians
2. Evaluate Anticipated
Financial Results:
* Analyze related resource -- Collateral
consumption and financial data
* Estimate financial -- Collateral
consequences of possible
quality improvements
* Establish hospital-funded Collateral Shared
budget
* Estimate size of physician Collateral Shared
payment pool
3. Assess Readiness for
Quality Sharing:
* Clinical opportunities -- Collateral
* Physician readiness -- Collateral
* Organizational readiness Collateral Collateral
* Clinical tracking -- Collateral
* Financial tracking -- Collateral
4. Design the Quality
Sharing Program:
* Clinical process -- Collateral
improvement targets
* Performance measures and Collateral Shared
monitoring
* Distribution criteria and Shared Shared
payment methodology
* Legal and contractual Lead Collateral
relationships
5. Coordinate/Manage Activities
and Launch Program
* Sequence tasks and Collateral Collateral
input/output relationships
* Finalize workplan, Collateral Collateral
responsibilities and schedule
* Coordinate tasks, inputs and Collateral Collateral
outputs
* Keep project on schedule and Collateral Collateral
report on status
* Maintain project budget -- --
records
* Prepare program description Collateral Collateral
and final report
Lead = Primary Responsibility Task
Collatreal = Secondary Responsibility Task
Shared = Shared Lead Responsibility For Task
figure 6 Dramatic Improvements In Performance Have Been Documented
Treatment of Children for Asthma Admission
Best Practices
First Year Fifth Year
Standard medication 20% 92%
Use of steroids 64% 91%
Best bronchodilator 90% 100%
Clinical Outcomes
First Year Fifth Year
Return to ER 1.0% 0.7%
Transfer to higher care level 3.5% 1.0%
Readmission rate 2.0% 0.1%
Length of Stay
First Year Fifth Year
ALOS 4.4 1.6
Cost Per Discharge
First Year Fifth Year
Avg. total cost per discharge $1,800 $900
Note: Table made from bar graph.
RELATED ARTICLE: IN THIS ARTICLE ... Take an inside look at quality gain sharing--the legally compliant
James Reynolds James Reynolds may refer to several people:
New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . He can be reached by phone at 212-826-1818 or by e-mail at jreynolds@jxreynolds.com [ILLUSTRATION OMITTED] Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. Roble is a partner at Ropes & Gray. He can be reached by phone at 617-951-7476 or by e-mail at droble@ropesgray.com [ILLUSTRATION OMITTED] |
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