webinar: performance improvement for children’s hospitals – key steps in developing a...

© 2014 Huron Consulting Group. All rights reserved. Proprietary and confidential.

1

Performance Improvement for Children’s Hospitals

Key Steps in Developing a Transformation StrategyOctober 28, 2014


2

Protocols for Webinar Participation Participant lines will be muted upon entry. To keep interactive, we can respond to questions:

– Submitted through the “chat” box to the side of the screen– Q&A at end

All participant lines will be opened during Q&A– Please mute your individual phone line to reduce background noise for everyone– Please do not place the call on hold

2


Presenters

3

Larry Burnett

Managing DirectorHuron Healthcare

Michael Pou


Laura Yaeger

Executive Vice PresidentHuron Education

Dan May



4

A Complex DynamicChildren's hospitals are challenged to:Provide exceptional care for childrenManage the input and expectations of involved family members


5

The Changing LandscapeCurrent healthcare changes combined with complex reimbursement updates are creating challenges for the healthcare and research missions of pediatric facilities

Changes are affecting:

Billing and Payment Delivery of care Revenue

These challenges create the need for:

Hospital roles and structure Federal reimbursement Research and teaching missions

Coordinating care Reducing patient length of stay Clinical documentation knowledge

Managing labor and resources Improving non-labor expenses Managing the research enterprise


6

Healthcare Transformation for Children’s Hospitals

Revenue Transition Model financial implications of

revenue transition Evaluate cost and revenue

alignment; move to align Update revenue

management capabilities Expand market reach

Clinical Transformation Improve access to care Establish proactive case

management Establish interdisciplinary care

coordination Reduce care variation Establish and implement strategy

for managing health Engage physicians and patients

Operational Excellence Translate strategy and intention

into transformation plan Establish balanced objectives

and metrics in support of plan Align organizational structure

and talent to strategy and plan Maintain governance with data

driven decision making and accountability

Scale and Integration Define delivery and growth

assumptions of strategy Assess hard and soft assets

against assumptions Design and implement delivery

model – aligning assets Integrate non-clinical operations


7

Research Transformation for Children’s Hospitals

1. Organization Structure: How does your research support structure help empower business leadership, academic leadership, and faculty to achieve its goals?

2. People: Do you have the right quality and quantity of people with the competencies to effectively provide service and stewardship for your institution?

3. Business Process: Are you deploying effective and efficient business processes to serve customers?

4. Performance Measurement: What measures do you use to evaluate the effectiveness of performance – financial, customer service and compliance?

5. Technology: Have you effectively leveraged technology to make business processes more efficient, effective and compliant to provide adequate information to internal and external stakeholders?

A comprehensive approach to assessing the research support structure to improve operating performance incorporates five key elements of an organization.

© 2014 Huron Consulting Group. All rights reserved. Proprietary and confidential.8

Clinical Transformation


9

Clinical TransformationLeveraging Change Across the Continuum

Interdisciplinary Care

Coordination

Ensures patients access the right care setting and provider at the right time to improve outcomes and maximize the use of valuable resources.

Clinical practice redesign that improves the reliability, quality, and safety of patient care by integrating and coordinating medical, nursing, and ancillary practice while decreasing process and supply variation.

Proactive management of patients across the continuum driving quality

and cost effective care. Strong case management reduces avoidable admissions and

minimizes delays in clinical settings.

Increases communication with the care team, ensures continuity of care, provides

seamless transitions for patients.


10

Clinical Variation ManagementA Holistic Approach to Cost and Quality

Focusing on all components of cost and quality creates the ability to see interdependencies and maximize savings more holistically.

Interdisciplinary Care Coordination

DME

Prof. Services

Ancillary Tests

Drugs

Imaging

Implants

Medical/SurgicalSupplies

Blood

Length ofStay

Patient andStaff

Satisfaction

Readmission

Rate

Complication

Rate

Outcomes

Direct Costs Resources Quality

Critical Care

Palliative Care,

Hospice


11

Case Study: Children’s Hospital LA

Founded in 1901, oldest freestanding children’s hospital in California By the numbers:

- 347 active beds overall- 106 pediatric critical care beds (more than any other hospital in the western U.S.)- More than 5,200 employees and nearly 600 medical staff- Average length of stay: 7.4 days

Annual statistics:- Admits 13,800 inpatients- Nearly 319,000 outpatient visits- More than 70,000 Emergency Department visits- More than 104,000 individual patients- More than 16,000 pediatric surgeries performed

Background


12

Case Study: Children’s Hospital LA

Challenges and Opportunities

Children’s Hospital Los Angeles (CHLA) was forecasting a significant impact to financial stability and needed to take immediate steps to transition to a DRG-based payment structure

The organization embarked on a significant, organization-wide transformative journey, which included major changes to care delivery processes

CHLA fully engaged all members of the care team in innovative ways, enabling them to work in a results-focused, mutually accountable, symbiotic manner, maintaining focus on the patient

Results


13

Clinical Transformation OutcomesMedi-Cal/ Medicaid Average LOS trends by severity

Updated as of March 31, 2014


14

Clinical Transformation OutcomesMedi-Cal/ Medicaid Average LOS trends by severity

Updated as of March 31, 2014


Revenue Transition


16

Revenue Transition Happening at different speeds in different markets Regardless, CEOs are committed to preparing for the shift Organizations must build capabilities needed to operate and thrive under

the value model – while remaining cost effective under the current model Organizations must develop a granular understanding of current and

future top-line revenue sources The type of revenue changes and the rate of change will help each health

system set priorities for healthcare transformation


17

Current and Forecasted Revenue Sources

Are current process and system

opportunities optimized?

What portion of your top-line revenue is from traditional fee-for-service, and what portion is from emerging value-based models

(bundled payment, shared savings, shared risk, capitation, etc.)?

What increases or decreases in utilization are occurring across the health system?

What shifts in utilization are occurring across the

health system?

What portion of revenue is from non-patient care

sources?

What changes are you forecasting for top-line

revenue mix, utilization, and non-patient care revenue?


18

Process ImprovementA comprehensive approach to improving every aspect of the revenue cycle


19

Organizations are Following Multiple Tracks

Transformative change Going beyond traditional revenue and cost improvement initiatives

New patient care revenue Expanding market share and reach, expanding programs and services

Non-patient revenue Exploring cautiously

Ensuring information systems are optimized Work drivers, reporting and accountability is driven through the organization

Optimization/Performance improvement of current processes

Understanding additional dollars that could be collected for services provided


20

Case Study: Connecticut Children’s Medical Center

Challenges and Opportunities

Challenge:Bring more of the hospital's revenue cycle activities in houseImplement a new EHR and ensure process improvements to revenue cycle would support the EHR conversion

Our Approach:Insourced patient financial services supported by proprietary reporting solutionsIncreased productivity and quality with clear benchmarks and productivity standardsImproved the insurance verification processImproved charge capture and managed care Worked closely with CCMC and Epic to ensure seamless integration of the new system

Results


21

Revenue Transition – Key Takeaways

Over-reliance on revenue from inpatient care carries one set of risks,while reliance on new, alternative revenue streams carries another

Moving from volume models is essential, but moving too quickly weakens revenues and puts significant pressure on the organization

Improving quality, improving the patient experience, and improving the cost structure remains the winning combination

Invest now in current processes for leaner times ahead


Operational Excellence


23

Operational Excellence Outcomes

Non-labor/ 340B Labor/ span of control Human Resources

Texas Children’s Hospital

CT Children’s Medical Center

Non-labor/340B Labor


24

Operational Excellence – Best PracticesLabor

Implement prospective labor tools to assist managers to adjust staffing in variable departments every 4 hours; include organization and enterprise-wide views

Implement retrospective labor tools to assist managers to monitor results and identify data trends

Implement predictive volume forecasting tool(s), especially important given the seasonality of some clinical events (e.g., asthma)

Capture data on key cycle times (e.g., order communication to fulfillment) and quality measures (e.g., no show rates in OP areas); incorporate the data into business driver dashboard by function to focus on identifying and resolving root causes of outlier performance


25

Operational Excellence – Best PracticesNon-labor

Develop a strategy to drive standardization. This is the next big area of opportunity for children’s hospitals

Implement data tools to improve your ability to analyze and manipulate non-labor pricing and utilization data

Develop a strategy to benchmark and renegotiate physician preference items and purchased service contracts not covered by Novation (approx. 50% of your spend)

Work with Novation to optimize GPO commodity pricing and standardization rebates (approx. 50% of your spend)

Work with Novation to convert old Premier contracts that were not exact matches to the Novation portfolio in order to collect admin fees from Novation


26

Operational Excellence – Best PracticesHuman Resources

Combine time-off with pay programs to align use of time away from work for its intended purpose and to manage the organization’s liability

Implement comprehensive leave of absence policy

Implement vendor management for contingent labor that standardizes rates by job, limits the number of vendors, and provides automated tools

Adopt premium pay policies that provide inflationary control, create equity across job families, and are competitive within the local market

Structure health plans and employee costs to provide recognizable value choices among options and support personal accountability for health


Scale and Integration


28

Scale and IntegrationSHARED

DECENTRALIZED CENTRALIZED

OUTSOURCED

RedundantInefficientCreativeNon-StandardizedFlexibleCloser to the “Action”

Command & ControlInflexible

UnresponsiveEfficient

Cost Allocation

Service Culture

Leading Practices

Efficient Delivery Model

Infrastructure

Independent Entity

Economies of Scale

Not Mission InvestedCan be Held AccountableDetached from Business

Service Agreements

Customer-FocusedBusiness Intelligent

LeveragePurchasing

PowerStandard

Processes


29

Examples of Potential Shared Services Functions

29

Information Technology Payroll Integration

Facilities Decision Support Analytics

Human Resources Accounts Payable Media Relations

Legal Community Relations Cancer Support

Supply Chain Clinical Support Services Patient Experience

Dietary Quality and Patient Safety Performance Improvement

Risk Management Compliance Infection Control

Safety/Security Business Development Medical Staff Credentialing

Clinical Operations Payer Contracting Strategy

Physician Services Physician Contracting Accounting

Research Foundation Nurse Education

Communications Government Relations Budgeting

Marketing Revenue Cycle Grants Management Services

Finance Behavioral Health Administration Health Information Management

Accounting Real Estate Float Pool

Internal Audit Governance Others . . .


30

Louisiana Children’s Medical Center TEAM ProjectIntegrating an academic medical center, children’s hospital, and two acute hospitals into an integrated health system to effectively serve Louisiana patients

Academic Medical Center – Interim LSU Hospital (ILH)Integrating ILH operations into LCMC while balancing their tripartite mission of providing medical education, research and patient care

Inte

grat

ed s

ervi

ces

to m

eet

patie

nt n

eeds

Pediatric Hospital – Children’s Hospital New Orleans (CHNOLA)Integrating CHNOLA operations into LCMC while continuing to provide high quality clinical care to children in the New Orleans market

Acute Hospitals – Touro Infirmary and New Orleans East HospitalIntegrating TI and NOE hospitals into LCMC while continuing to provide state of the art clinical and surgical services to adult and elderly patients

Integrated Health System - LCMCDeveloping LCMC’s shared service capabilities (revenue cycle, supply chain, HR etc.) with standardized back office operations to reduce costs and improve efficiency


Research Transformation


32

Research Enterprise Management

CH

ALL

ENG

ESResearch is small part of the business and often lacks the appropriate support mechanisms.

Culture of autonomy among units engaged in research inhibits enterprise change.

Silos of custom systems to support research impede effective data sharing.

Obtaining actionable data is slow and difficult. Benchmarking information is more limited than in clinical.


33

Research TransformationOpportunities: Transforming the management of the research enterprise

Closely-coordinated, metrics-based, highly-responsive administrative processes

Highly-integrated yet administratively distributed Research Enterprise Systems

Easily accessed, actionable data

Measurably improved investigator service


34

Research Transformation

Assess to diagnose &prioritize improvementopportunities: Organization People Technology Metrics

Assess Implement

Hands-on Implementation

Metrics to confirm project success & establish future priorities

Plan implementation of change:` Organizational structures that align

optimally within the AMC enterprise and allow for enhanced collaboration to support researchers

Clear roles & responsibilities for professionals who support research & promote compliance

Efficient & effective processes that minimize PI burden

Integrated & flexible systems to support researchers & provide data for decision making

Plan


35

Case Study: The Children’s Hospital of Philadelphia

Goal: Best support and manage a growing research enterprise.

Scope of Improvement Areas:Research administration support structure and compliance program effectivenessEnterprise systems planning and implementation – Lawson Grants, Click CommerceAAHRPP accreditation assistance (human subjects protection program)Financial performance improvement – optimize cost recovery from federally sponsored programs (indirect cost rate, recharge centers, etc).

Strong, responsive strategic planning methodologies & approaches

Mature research administration infrastructure Highly-motivated, incentivized, and well-

credentialed support staff Supportive institutional risk profile Complementary compliance programs built

around common core elements AAHRPP-accredited program for the protection

of human subjects Enabling technology platforms for compliance

and the administration of sponsored programs, fund accounting, research billing, receivables, and research contract administration

Maximal indirect cost recovery rates

Challenges and Opportunities Results

Research Support Model Transformation


36

Case Study: The Children’s Hospital of PhiladelphiaOverview of Research Support Structure

Deputy Scientific Director

CHOP Chief Financial Officer

Chief Scientific Officer, Executive Vice President

Office of Clinical & Translational Research

Director

Deputy Administrative Director, Vice President

Research Information

Systems

Director, Environmental Health & Safety

Office of Research Compliance and

Regulatory Affairs

Office of Faculty Development

Office of Technology

Transfer

Office of Research Safety

Laboratory Core Facilities

Clinical and Translational

Research Center

Office of Responsible

Research Training

Office of Postdoctoral

Affairs

Clinical Research Support Office

Clinical Core Facilities

Core Facilities Administration

Research Finance

Research Resources

Clinical Trials Financial

Management

Research Communications

Lab Animal Services

Sponsored Projects & Research Business

Management

Policy and Procedure

Documentation


37

Case Study: Children’s National Medical Center

Challenges:Research volume had increased by 18% per year compounded from ’98 ($12M) to ’08 ($63M)Pre-award reported to the VP/ResearchPost-award reported through the Controller to the CFO Research community had little support from, or confidence in, administration Staff levels were too low to provide controls, training, outreach and support to PIs Staff turnover was highOur Approach:Developed & implemented a new organizational model for providing supportRevised policies & proceduresAssessed backlogs (financial reporting, cash management, and other key risk areas)Implemented new research administration and financial systems

Single point of accountability- All report to Executive under VP/Research

“Dotted line” to Finance maintains internal controls and financial integrity

A new Financial Coordinator position serves as liaison/support to PIs

Pre-award, Post-award & Financial Coordination teams with own managers- Aligned to support 4 major research institutes

Enhanced staffing levels improve service to researchers

Improved internal controls Increased process efficiency and effectiveness Has enabled continued growth in the research

enterprise

Challenges and Opportunities Results

Research Administration Transformation


38

Key TakeawaysTo thrive in the changing healthcare environment, most children’s hospitals face the need to improve performance between 5-15 %

Achieving this level of improvement requires a strategic transformation plan

To be successful, the healthcare and research strategies should span the enterprise- Healthcare: Clinical transformation, revenue transition, scale and integration,

operational excellence- Research: People, organizational structure, business process, technology,

performance measurement


Contacts

39

Larry Burnett

Managing DirectorPhone: [email protected]

Michael Pou


Laura Yaeger

Executive Vice PresidentPhone: [email protected]

Dan May



Questions

40

41

Title and Date

webinar: performance improvement for children’s hospitals – key steps in developing a...

Healthcare

huron consulting group

effective care

care variation

clinical transformation

healthcare transformation

continuity of care

exceptional care

care team