Cost repositioning - an institutional case study

Report
Cost Repositioning – an
Institutional Case Study
Kandice Kottke-Marchant, MD, PhD
Chair, Robert J. Tomsich Pathology &
Laboratory Medicine Institute
Cleveland Clinic
Cleveland Clinic’s Cost
Repositioning Approach
Cost Repositioning
Objectives
• Provide value and ensure affordable care
for patients
• Leading innovation in changing industry
• Transformational cost structure changes
• Balancing the shift: volume to value
Cost Repositioning
2014 - 2016 Goals
* Implemented Savings
(in millions)
$1,000
$800
35
75
$600
10
TBD
140
200
$400
270
$200
$0
10
100
560
Org Chart
Executive Check In
CEO, Chief of Staff, Chief Strategy Officer
Task Force
Physician-Led with Members Representing:
•
Physician Leadership
•
Administration
•
Nursing
•
Marketing & Human Resources
Workstreams
Project
Management
Office
Finance
Human
Resources
Marketing /
Communications
Structure
Executive Leadership
Full engagement & sponsorship
of CEO / Chief of Staff
Physician-Led
Task Force
Cross-functional physician,
nursing and administrative
leadership team
Workstreams
Intentionally not aligned with
org. structure to encourage
transformative change
Workstreams
• Clinical
• Indirect
• Non-Staff
• Staff
• Stewardship
• Research
• Education
• Value Based Care
Project Pipeline
Idea /
In-Process
Approval
Implemented
Clinical
35
17
4
Education
4
0
5
23 teams*
18
0
Non-Staff
10
5
4
Research
33
1
0
Staff
2
0
2
Stewardship
27
18
8
TBD
0
0
134*
59
22
Indirect
VBC
Total
*Each Indirect team will present numerous ideas
As of 4/15/14
Specific Pathology and
Laboratory Medicine Drivers
for Cost Reduction
Transparency and Decreased Reimbursement
Pathology & Lab Med
Cleveland Clinic
452%
of CMS*
406%
of CMS
285%
of CMS
200%
of CMS
100% Medicare
147%
of CMS
45-80%
45-80%
of CMS
of CMS
LabCorp
Quest
Aetna
Anthem
Cigna
MMO
* Reflects new lab pricing; UHC’s current price is 537% of CMS
UHC
Additional Drivers
• Devaluation
- Biopsy codes
- Cytopathology codes
• Revaluation
- IHC codes
• Other changes
- Molecular diagnostic billing codes
Robert J. Tomsich
Pathology & Laboratory
Medicine Institute
Approach
RT-PLM Cost Repositioning
Summary
• Reduce cost per test by 30%
• How?
- Assess current operations
- Develop enterprise-wide transformational
strategies: optimize laboratory resources
- Implement
2014
12%*
2015
10%
*2.6% from 2014 budget + 9.4% new in 2014
2016
8%
Major Projects
•
•
•
•
•
•
Department Reorganization
Administrative Reorganization
Lab consolidation
Pathology sub specialty consolidation
Allogen: transplant lab reorganization
Preanalytics optimization
Big Picture: How We Are Saving
IT
3%
Other
6%
Restructuring
16%
Preanalytics
11%
Test
Consolidation
13%
Attrition
9%
CCL
5%
Pathology
Subspecialty
Consolidation
14%
Allogen
11%
Sendouts
12%
Department and Administrative
Reorganization
Robert J.
Tomsich
Pathology &
Laboratory
Medicine
Institute 2013
Molecular
Clinical
Laboratory
Pathology
Medicine
Dr. Hsi
Dr. Stagno
Vice Chair of
Operations
Dr. Marchant,
Inst. Chair/
J Seestadt,
Admin
Cleveland Clinic
Laboratories
Dr. Bosler, Head
D Helmick,
Finance Director
Departments
Molecular
Pathology
Pathology
Anatomic
Regional
Dr. Goldblum
Pathology
Regional
Pathology
Dr. Goldblum
Cleveland
Clinic
Laboratories
Preanalytic Services
Centers
Family Health Centers (NEW) Dr. Procop
Enterprise Test Utilization/Consultation
Test Development
Pathology Informatics
Internal Assessment & Compliance
Continuous Improvement
Biorepository
Research
Education
Florida
Dept. of
Pathology
Administrative Restructuring
1st Tier:
Clinical
Operations
FORMER: 41 FTE
REVISED: 23 FTE*
REDUCTIONS: 13 FTE
PreA
PreA
2nd Tier: Lab
Med and
Preanalytics
Non-Clinical
Operations
FORMER: 25 FTE
REVISED: 23 FTE
REDUCTIONS: 2 FTE
FORMER: 45 FTE
REVISED: 34 FTE
REDUCTIONS: 12 FTE
FHC
1
CP
MP
Lab
Med
RP
AP
Path
• Align management
(regional hospitals)
• Accountability
• Supervisor + team
leader/coordinator
•
•
•
•
•
Lab Admin
Quality
Informatics
Finance
Education
Lab Consolidation
Lab Medicine
Consolidation – Why?
• Increased efficiency and decreased cost/test
• Enterprise subspecialty lab oversight
• Standardize enterprise quality and
compliance
• Enterprise-wide oversight of laboratory
operations and preanalytics
• Consolidated pre-analytics will improve
quality and decrease errors
H
Ashtabula CMC
H
Euclid Hospital
H
Cleveland
Clinic
H
Lakewood Hospital
H
Hillcrest Hospital
H
South Pointe
Hospital
Lutheran Hospital
H
Marymount Hospital
H
Fairview Hospital
Following the completion of lab
and pathology consolidation, main
campus will ultimately see about a
32% increase in billable tests.
H
Medina Hospital
Lab Consolidation Process
Highlights
• Enterprise Optimization Committee
- Members from across the enterprise –
• Hospital presidents/COO
• pathology and laboratory medicine (SME)
• Nursing
• IT, logistics, preanalytics, finance, quality
- Defining required service levels between main
campus and regional hospitals.
- Scope: Daily draw times, standardization, TAT,
couriers (q2hr), billing, communication
Lab Test Consolidation Plan
Hospitals
P
I
L
O
T
Stage 1
Operational Stages
Stage 3
Stage 4
Stage 2
Stage 5
Stage 6
Marymount
Lutheran
N
O
N
P
I
L
O
T
Euclid
Medina
Lakewood
South Pointe
B
U
S
I
E
S
T
Hillcrest
Fairview
*Marymount includes Marymount South facility for chemistry
FTEs (Sep 2013) - 375
FTEs (May 2014) - 328
Stage savings (in millions)
AFB / Mycology / Parasit (IP/OP)
Chemistry OP
Hematology OP
Micro OP / IP (Non-stat)
313
$
0.9
292
$
1.3
274
$
1.1
268
$
0.3
FTEs Absorbed
Chem/Heme Routine IP
Chem/Heme Daily Draws
Blood bank OP / Routine IP
Savings
Sep 2013 - May 2014
46
$2.8M
Consolidation Plan Reductions
60
$3.6M
106
$6.4M
Total
Pathology Consolidation Why?
• All enterprise pathology specimens with
subspecialty signout
• Improve histology and cytopathology
processing efficiency: decrease cost/test
• Pathologist RVUs 80th percentile target
• Standardize frozen section & cytology
rapid reads - ePathology
Pathology Consolidation
• Professional Subspecialty Service Model
- Frozen Section Coverage
- Surgical Pathology & Cytopathology subspecialty plan
- Credentialing
• Consolidate Technical Operations
- Accessioning, specimen tracking, courier deliveries,
histology, cytology, billing, etc.
• Facility & Equipment Prerequisites
-
Main campus office space
Biopsy cell
Digital scanners and web cams
Scheduling system
AP Consolidation (Regional to Main)
2013 Workload by Subspecialty
•
•
•
•
•
•
•
•
•
•
•
•
Subspec.
GYN
GI
Breast
SFT
Ortho
GU
HPB
ENT
Derm
PUL
Wt. FTE Need^
2.82
2.06
1.06
0.92
0.90
0.77
0.66
0.44
0.30
0.27
10.20
•
Cyto
2.15
•
BM/Lymph
1.25 (EH)
Pilot Metrics
•
•
•
•
•
•
•
•
•
•
•
•
Lost specimen rate by site of origin
Critical Value Performance for test that are moving
# calls to AP pathologists for coverage (New for AP)
Clients Service performance metrics
% or # of STAT orders for tests that are moving
Length of stay metrics by hospital
TAT for top 10 tests by volume
AP Bx TAT
Logistics Measures
- % on time pick ups and % of scheduled pickups complete
- Duration of routes and time spent at each site for pickup
% that short notice Pathologists arrive within 60 minutes (New to
Pathology)
Revenue
- Denial Rate performance
Productivity Impact
- Earned FTE vs. Actual FTE at pilot sites (Productivity Report)
RT-PLMI Cost Repositioning
2014 Timeline
First RTPLMI Ent.
Opt.
Meeting
October
August
First Pilot
Meetings
with
Lutheran
and
Marymount
Pathology
Consolidation
Pilots
Begin
December
Dept + Admin
Restructure
July
May
Approvals
granted
June
New
Managers
Hired
September
2nd Tier
Reorg
Percentage of Savings = 9.4%
Percentage of OpEx Savings by Area
Lab Medicine
3.88%
PreAnalytics
1.46%
Pathology
1.44%
Allogen
1.01%
CCL
Informatics
Test Development
0.70%
0.34%
0.31%
Internal Audit & Control
0.11%
Finance
0.07%
Education
0.04%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
Total 2014: 9.4% new in 2014 + 2.6% from 2014 budget
Challenges
• Long-term, multi-year transformation
• Change throughout organization
• Aligning annual planning timeline /
process
• Organizational engagement
• Communication to all stakeholders
• Setting service level expectations
“….the pathway to improving
quality and safety is the same
pathway to lowering cost, and
that involves relentlessly taking
waste and unnecessary variability
out of our processes.”
Questions?

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