October 11, 2011Texas Health Law Conference

Ken Davis, MDChief Medical Officer

San Antonio Methodist Healthcare System

Quality and Reimbursement: The New Payment World

The Truth

The public and payers demand care that is:– Accessible– Coordinated – Affordable– Evidenced-based– Free of avoidable complications– Transparent in clinical outcomes

This will require new systems of care delivery,

reimbursement and oversight

Who better than physicians to lead this change?

“If the rate of change on the outside exceeds the rate of change on the

inside, the end is near.”

Jack WelchFormer Chairman and CEO

General Electric Corp.

How Important Is The Rate Of Change?

2018 2019

Hospital Value-Based Purchasing (1-2%; Phased in over 4 Years)1.00% 1.25% 1.50% 1.75%

2016

2.00%

2011 2012 2013 2014 2015 2017

Hospital Acquired Conditions (1%)1.00%

Hospital Readmissions (1-3%; Phased in over 3 Years)1.00% 2.00% 3.00%

Total 2% 3.25% 5.5% 5.75% 6% ->

CMS Value-Based Purchasing:Linking Federal Reimbursement to Clinical Performance

Transformational Change

• Structure

• Measurement

• Leadership

• Structure– Organization– Care Process– EHR

• Measurement

• Leadership

Transformational Change

Methodist Healthcare, San Antonio Market

MHS Hospital Santa RosaMHS Surgery Center TexSanBaptist UniversitySTRIC Imaging Nix & SWG

Legend

343

43

4

43 43

5

43

6

$

Timberwood Park

Fair Oaks Ranch

Scenic Oaks

Cross Mountain

Helotes

China Grove

Live Oak

Windcrest

Kirby

Elmendorf

Somerset

Converse

Lackland AFB

Grey Forest

Lytle

Selma

Schertz

St. Hedwig

Cibolo

10

10

35

35 37

37

410

151

16

281

16

90

281

87

181

1604

1604

MethodistBoerneMedicalCenter

NortheastMethodistHospital

MethodistAmbulatory

SurgeryHospital

MetropolitanMethodistHospital

Methodist HospitalMethodist Heart Hospital

Methodist Children’s HospitalMethodist Specialty &

Transplant Hospital

MethodistStone OakHospital(2008)

MASC - MC

MASC - NC

STRIC

STRIC (2 Loc)

STRIC (8 Loc)

STRIC (2 Loc)

STRIC

STRIC

STRIC

STRIC

- 8 Hospitals- 2000 beds- HCA/Meth Min- 2700 physicians

MSOH MH MSTH MCH MMH MNE MTHMASH

Medical Board

Community Board

MHS Governing Board: MHM/HCA

Quality ImprovementPhysician ResourcePt Care Exp and SafetyMedical recordsTransfusionBioethicsCancer

MECs

CredentialsInfection ControlPharmacy & TherapeuticsPeripheral Vasc InterventionSpecial Care Utilization Review

BoardBoard

MHS Medical Staff Structure

Cardiovascular (Cardiology, CV Surgery, Heart Transplant, PV) Surgery (General, Trauma, Bariatrics, Renal/Liver Transplant) Hematology/Oncology (Adult and Pediatric BMT) Medicine (FP, IM, Hospitalists, Intensivists) Neurosciences (Neurology/ Neurosurgery) Orthopedics/Spine Surgery Pediatrics Women’s Services Psychiatry Post-Acute Care – Home Health, Rehab, SNF, Pharmacy Ambulatory Clinic Care

Emergency Svcs. Anesthesia Radiology Pathology

System Service Lines

Supporting Services – may have representatives on multiple Service Lines

Customer Sub-segmentation Requirements Data Source

Patients/Families In-patientOut-PatientEmergencyClinics

*Care Measures: Process Outcomes Efficiency Safety Experience

MHS Monthly Quality Reports

Staff VolunteersEmployedStudents

Opportunity to advance/learnCommitment to qualityConfidence in senior leadersTreated with respect

Employee Survey Results

Physicians AdmittingNon-admittingContractedEmployedPHONon-affiliatedIn Training

Care Measures: Process Outcomes Efficiency Safety ExperienceWorkflow EfficiencyInput into strategic planning and day-to-day operationsCommunicationCompetent Staff

MHS Quality Reports

Premier Efficiency ScoresSWOT analysis by SL

Phys Engagement SurveyMHS Competency Data

Customer Segmentation

Customer Sub-segmentation Requirements Data Source

Owners HCAMethodist Ministries

Economic returnCollaborative governanceInput into strategic directionEthical conductClinical outcomes

Financial ReportsCommittee AttendanceStrategic Planning Process MHS Monthly Quality Reports

Partners STRICRural HospitalsUniversityASCsJoint Ventures

Economic returnStrategic Input

Financial ReportsStrategic Planning Process

Payers Physician Risk GroupsGovernmentEmployersInsurance CompaniesBrokers

Value (Quality/Cost) MHS Monthly Quality ReportsFinancial Reports – Cost/Discharge

Customer Segmentation

Customer Sub-segmentation Requirements Data Source

Community EMS/STRACElected Officials, Business/Leadership, Schools, Church, Military, Neighborhood Associations, Schools, Health Associations/Groups Consumers (potential patients) Media (awareness and perception)

Appropriate accessResource for health information and education: Improve community/personal

health Improve health delivery systemInput, Involvement in strategic

planning and operationsTransparency- clinical/ethicalCorporate citizenship: Charitable contributions Economic opportunity Support growth initiatives

Preference and perception for/and of Methodist services, access to services (e.g., physician referral, health information)

High regard for services, first stop for health information

External EMS/STRAC ReportsEvery three-year Health Collaborative Community Health Assessment Report, HCAPS Community Assessment Reports, media activity reports, donation reports, Chamber of Commerce yearly economic studies (annual report and industry segment reports), Market share reports (internal and competitive)

National Research Corporation, Target SA – preference and perception reports, Contact Center internal reports

Monthly Media Valuation report and internal competitive analysis

Customer Segmentation

Methodist Healthcare Strategic and Business Planning Process• Serving Humanity to Honor God• Supporting the health status of

the community• Constantly improving quality

Mission

• A commitment to greatness• Creating healing experiences• Never-ending improvement• Preference for MHS by all served

Vision

Values

Review of Organization’s Critical Issues

Market Environment

Scan

Understanding Customer Demands

SWOT Analysis Board, Senior Leaders,

Physicians, Staff, Patients/Families,

Community, Payers, Owners, Partners,

Suppliers

How To:Maximize Strengths

Minimize Weaknesses Seize Opportunities Eliminate Threats

Breakthrough Strategies

People Service Quality Growth Finance Community

Development of System Yearly Business Plan

People Service Quality Growth Finance Community

Validation and EducationAcross the Enterprise

Budgeting Process

Finalize and

Deploy Yearly

Business Plan

Continuous Performance

Review

Validation and EducationAcross the Enterprise

Validation and EducationAcross the Enterprise

Evaluate and Improve

Strategic and Business Plan Process, and Deployment

Development of Facility

Yearly Business Plans

• Creating an appropriate work environment

• How we treat each other• How we treat our customers

1st Q

4th Q

3rd Q

2nd Q

2nd Q

90 day Action Plans

Plan Analysis Plan Development Plan Deployment

Methodist Healthcare Ministries of South Texas

Serve low income and uninsured families in South Texas

72 county service area Clinics:

– Primary care medical and dental– School-based– Church-based– Counseling, case management

social services 1998 – 2010

– $ 340 million– 3.24 million client encounters

2010 – $ 52 million– 516,000 client encounters

Opportunities for Cost Reduction & Quality/Safety Enhancement

CARE85%

OLD Cost Drivers

15%

Creating a Process Driven Organization

Everything we do is:

Defined - by customer need

Measured - by repeatable data

Improved - in a structured methodology–DMAIC

Aligned - across the organization

Improving customers’ Value (Quality/Cost)

Process-Driven Work

Inputs

Resources

Requirements

OutputsWork: - Systems - Processes - Measures

SA Methodist Healthcare System – SIPOC

Customer Value

(Quality/Cost

Key Work Systems

Enab

lers

Human Resources

Information Technology

Revenue Cycle and Finance

Supply Chain Management

Facilities and Infrastructure

Information Technology

Public Safety

SupportSystem

Suppliers

Management Systems

LeadershipSystem

Organizational Belief Systems

Strategic Planning System

Organizational Perf. Imp.

System

Clinical Support Services

Support Services

Learning and Innovation

Direct Care

Suppliers

Patient and Stakeholder Relationship Management

Processes: Patient Access Assessment/Diagnosis Care Delivery Discharge/Education Continuum Of Care

Care Measures: Process Efficiency Safety Outcomes Experience

Systems: Inpatient Outpatient Emergency

}

Voice Of The Customer

Legal, Ethical, Governance

System

Suppliers Inputs Processes Outputs Customers

Individual Patient Care

Standard Care by Protocol

Direct Physician Intervention

MHS Order Sets and Protocols

Additional Review

by EBCT and Specialty

Group

Implement Measure*

CreateRevisePilot

Medical Record Committee

Medical

Board

*evaluate adoption, periodic review, revision based on clinician feedback

yes

no

Evidence Based Care Team

Multidisciplinary System-wide

Approval

• Lab, Pathology, Microbiology• Radiology, Cardiology, General

Transcription• Filter Preferences

– Result, Patient Type, Physician Role– No Duplicates

• Private, Secure, Audited Exchange

• Browser View• Filter / Sort• Batch Print

HL7

EMR

Hospital Assistant

Fir

ewal

l

Practice – No EMR

EMR

PDF

• Discrete Data• Directly Into

Chart or Worklist

• Alerts & Flowsheet

• Image Data• Manual

Indexing• Filename

Based on Patient Data

Office Assistant

Practice – EMR, No HL7

Practice – EMR / HL7

Firew

all

Data ExchangeServer

MHS: Hospital-Clinic Data Exchange Server

HITECH Timeline

MHS IT Roadmap Oct Nov Dec Jan Feb Mar Apr May Jun Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2010 2011 2012 2013 2014 2015

HITECH

Meaningf

ul Use

Prepare/Deploy for Stage 1 Req Prepare/Deploy for Stage 2 Req Prepare/Deploy for Stage 3 Req

Meet S1 Meet Stage 1 Req Meet Stage 2 Req Meet Stage 2 Req Meet Stage 3 Req

Deploy CPOE Medication Orders 30% Deploy CPOE All areas 60% Deploy Total E.H.R. ED System Inpatient Adv Clinicals Deploy All Adv Clinicals

Meaningful Use - 19 Objectives Meaningful Use - 24 Meaningful Use - TBD OCR Audit/HITECH Security Stage 1 Security Stage 2 Security Stage 3

Meditech 5.6.4 Pmt 1

Pmt 2 Pmt

3 Pmt

4

Meditech eSignature

Continuity

of Care

HUB Enterprise ( Patient Information to Physician Practice)Physician Practice to MHS Integration

Simplified Physician Access Cardio PACS CCSA - HITECH Stage One HCAPS EMR Deployment

Affiliated Physician EMR DeploymentHCAPS Physician Practice Acquisition and Support

Rural Hospital Outreach and IT Systems and ServicesHospital Expansions

Core &

Support Clinical

Systems

Clinical Repository & Quest Program ICD 10Real-time Location - Assets Real-time Location System - Patients

Automate and Streamline Workflow to Improve Clinician EfficiencyCSG Clinical Transformation

Bar Coded Transfusion Clinical Monitoring Integration Staff Scheduling

Medical Staff (Cactus) Case Management (Midas)

Facility Construction Projects

• Structure

• Measurement– Care

• Process• Outcome• Efficiency• Safety• Experience

• Leadership

Transformational Change

Clinical Quality Measures

Care– 1. Process – 2. Outcomes– 3. Efficiency– 4. Safety– 5. Experience

Each measure segmented by hospital, clinical service, nursing unit and physician

Profiles: - System - Service Line - Hospital - Nursing Unit - Practitioner

2727

Composite Quality Measures

Care:–Process

–Outcomes

–Efficiency

–Safety

–Experience

1Q

07

2Q

07

3Q

07

4Q

07

1Q

08

2Q

08

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

2Q

11

P

3Q

11

P

80%

85%

90%

95%

100%

81.8%

84.3%

86.9% 87.4%

92.6% 92.5%

95.1% 95.5%96.3% 96.6% 97.1% 96.8%

97.5%96.6%

97.7% 98.0% 97.9% 97.8%98.9%

All CMS/HQA Measures in Each Facility Rolled intoOne Composite Score

Quarter

good

2929

Composite Quality Measures

Care:–Process

–Outcomes

–Efficiency

–Safety

–Experience

Acute Care Inpatient Mortality Rate

Methodist Hospital (5 in 1) ReadmissionsJune 1, 2007 – June 30, 2010

Rate per 100 AdmissionsHospitalcompare.gov

MH CMS Avg.

AMI(991 pts)

18.7 19.8

HF(2124 pts)

22.8* 24.8

PN(1444 pts)

17 18.4

* Statistically different

3232

Composite Quality Measures

Care:–Process

–Outcomes

–Efficiency

–Safety

–Experience

2010 MHS Average Length of Stay (ALOS) Comparison

MH MCH MSTH MMH NEMH MSOH0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

5.00

Expected ALOS - CS Sel Expected ALOS - CS StdObserved ALOS

Day

s

Please Note:CS Sel – CareScience SelectCS Std – CareScience Standard 33

Total Opportunity Days (0.5d-19d) for Calendar Year 2010

• ALOS Observed vs. ALOS Expected (CS Std)

MH43%

MSTH11%

MCH14%

NEMH11%

MMH15%

MSOH6%

MH MSTH MCH NEMH MMH MSOH

35,941

8,689 11,376

9,095 12,630

4,921

MHS = 82, 651 total opportunity days at $450/day translates to

$37 million. Opportunity Days are admitted days

beyond the expected LOS

34

3535

Composite Quality Measures

Care:–Process

–Outcomes

–Efficiency

–Safety

–Experience

50100150200250300350400

2007 2008 2009 2010 2011 YTD

Hospital Acquired Conditions

MHS Hospital Acquired Conditions

3737

Composite Quality Measures

Care:–Process

–Outcomes

–Efficiency

–Safety

–Experience

Service – HCAHPS Composite

• Structure

• Measurement

• Leadership–Culture–Training–Measurement

Transformational Change

Definition: Leadership Culture

How leaders influence others to get the work done

Organizational culture where:– leaders use their skills of influencing people – to enthusiastically work towards goals

identified as being for the common good –with character that inspires confidence

James C. Hunter

Definition: Leadership Culture

Transformational Change

Greatest Health System Leadership Cultural Change:

Engaging Clinicians

Empowering Clinicians

MHS Leadership:Alignment/Deployment

GOALS System Hospital Department or Svc. Line

Unit Individual

People

Service

Quality

Finance

Growth

Community

One System goal per Pillar Goals tied to System Pillar goals LEM goals

Leadership - Skills Training

Management Leadership Training

Physician Leadership Training

Nursing Outcomes College

Board Education and Planning Retreats

Clinical Outcome Manager Training – (Clinical Nurse Leader)

Physician Leadership Development:“Training Physicians for Empowered Leadership Positions”

Elected Physician leaders and those delegated by MECs

Two year leadership training program Topics:

– Comparative Clinical Outcome Measures– Servant Leadership– Crucial Conversations– Scripted Patient Communication “AIDET”– High Performing Teams– Integrated Delivery Systems– Creating a Safety Culture– Strategic Planning– Hospital Finance– Health Law– Value Based Purchasing– Others…

Leadership Model:Servant Leadership

Character Development

Listening

Accountability

Results

– Not only What you achieve , but How you achieve it

Leadership Skills:Crucial Conversations

Patterson, Kerry. Grenny, Joseph. McMillan, Ron. Switzler, Al. Crucial Conversations, Tools for Talking When Stakes are High. McGraw Hill 2002.

Dialogue (free flow of information)

Group decision

Shared pool of information

Commitment to act

Leadership 360 Feedback

Honest- Is someone people can trust - Is a leader people feel confident following

Respectful- Treats people with respect - Does not engage in backstabbing, (talking behind backs, “managing down”)- Does not embarrass or punish staff in front of others

Committed- Makes clear to staff what is expected - Holds staff accountable for care standards - Works with staff in a team approach - Holds others accountable for care standards

Humble- Is a good listener - Is not overly controlling or domineering

Adapted from James C. Hunter “The Worlds Most Powerful Leadership Principle”

Leadership 360 Feedback

Patient- Shows patience and self-control with others - Has a consistent manner and stays calm

Kind- Shows appreciation to others - Gives encouragement to others - Gives credit to those who deserve it

Selfless- Meets legitimate needs (as opposed to wants) of others - Is sensitive to implications of their decisions on others

Forgiving- Is able to forgive mistakes and not hold grudges - Spends time on the problem, not assigning blame

What are the greatest leadership strengths/skills this physician possesses?

What leadership skills does this physician need to work on and improve?

Adapted from James C. Hunter “The Worlds Most Powerful Leadership Principle”

Ask yourself everyday:

“Are you trying to do something or be somebody?”

Leadership Culture and Accountability