Implementing 4 of AHA's Must-Do Healthcare Transformation Strategies

To help hospitals survive and thrive in the new era of value-based payment, the American Hospital Association’s Hospitals and Care Systems of the Future report identified 10 must-do strategies, four of which are high priority:

  1. Aligning hospitals, physicians, and other clinical providers across the continuum of care
  2. Utilizing evidence-based practices to improve quality and patient safety
  3. Improving efficiency through productivity and financial management
  4. Developing integrated information systems

healthcare transformation strategiesThe AHA has laid out some important guideposts for the journey, but where do you start? Trying to do everything at once is impossible. So how do you decide where to focus first? Based on my experience working with hospitals across the country as a provider and a vendor including one of the founders of KLAS, as the first chief IT executive for Intermountain Healthcare, as a leader of HIMSS on a national level, and now as a member of the leadership team at Health Catalyst, here’s how I see it.

My advice is to begin with Strategy No. 4 – developing integrated information systems. The AHA defines this strategy as including “a comprehensive data warehouse with clinical, financial, demographic, and patient satisfaction data.” Why is an enterprise data warehouse (EDW) so critical to transforming your system? Because without it, there’s no way to move forward; focusing first on Strategy No. 4, will help you accomplish the other three strategies.

For example, accomplishing Strategy No. 1 – getting physicians aligned and engaged – is largely a process of restructuring financial relationships. For instance, providing performance incentives for physicians who meet quality standards under an ACO. But without data to track outcomes, it would be nearly impossible to determine the nature of those financial relationships. Data also help people understand how to get to best practice, which is what Strategy No. 2 is about. Historically, it has taken us years to identify and adopt a new best practice as an industry. Health Catalyst believes we can transform and radically speed the development and deployment of best practices by modeling data around the table with clinicians. This simple-sounding process enables clinicians to literally see first-hand how doing something differently, such as using a better or cheaper part in knee surgery, improves cost while maintaining or improving quality.

Changing Medicine One Step at a Time

Let’s dive a little deeper into the development of best practices, which are so critical to AHA’s second strategy. At Health Catalyst, we believe revolutionizing medicine is accomplished one step at a time. It is an iterative process that relies heavily on data and having the ability to manipulate years’ worth of clinical, financial and patient satisfaction data from across your network in near-real time to uncover the best solution.

One of the tools we use is our Key Process Analysis (KPA) application. It analyzes data to determine which clinical care process families represent the greatest improvement opportunities for a healthcare organization. Specifically, our KPA tool identifies the clinical processes with the highest variation and highest resource consumption.

By analyzing combined clinical, billing, and costing data based on ICD-9 codes and APR-DRGs, the Health Catalyst KPA application sorts each patient encounter into a three-tiered hierarchy:

  1. Clinical program (e.g., orthopedics)
  2. Clinical family (e.g., joint)
  3. Clinical work process (e.g., hips or knees)

With clinical data stratified in this manner and combined with financial data, you can see which clinical programs, families, and work processes have the greatest opportunity for improvement. And then you can combine the analytical data with your knowledge of the organization to identify the best practice that will bring about that improvement.

At its most basic, Health Catalyst is trying to teach healthcare organizations to bring outlier physicians and clinicians back into the normal range. Whether it’s physicians who order too many X-rays for asthma patients or those who spend $5,000 to perform a procedure that others are doing for $2,500, we do this by 1) identifying the changes that promise to deliver the greatest benefit in terms of both cost savings and quality improvements; 2) identifying the best practice that will make the improvement, and 3) ensuring that the best practice not only is deployed but sustained.

The Late-Binding™ Advantage

One reason for the slow progress in identifying and deploying best practices across our industry has been that traditional EDWs are so slow at retrieving information. At Health Catalyst, our  late-binding TM approach to data warehousing delivers near-real-time data so that users of the EDW can model a hypothesis, change parameters, and see what impact the change would have. What if we reduce the length-of-stay by one day for a certain type of patient with no co-morbidities? What if that surgical procedure, instead of taking 90 minutes, took an hour? Using our dashboard, cross-functional teams of clinicians, technicians, quality experts and finance experts can test these hypotheses and see the expected results in real time. Moreover, they can observe how the results change over time as the best practice is implemented.

That just wasn’t possible in the past, when hospitals lacked access to near real-time data from across the network, and the tools to analyze and manipulate the data on the fly. In the past, a quality improvement team might go to a data analyst to ask for a report on a topic, wait three weeks and find that the report wasn’t what they wanted. Through a long trial-and-error process they would gradually narrow the report down to the specific criteria they wanted to measure. Three to six months later, they would finally have the data to test a hypothesis about a best practice.

Can you imagine any other industry in which that three- to six-month lag time would be acceptable? I can’t.

Improving Efficiency Starts with Understanding Costs

The importance of starting first with AHA’s strategy No. 4 and deploying an EDW is evident again when you look at their third strategy – improving efficiency through productivity and financial management. As a first step, AHA recommends that hospitals track expense-per-episode data across every care setting to understand the true cost of care for each episode of care.

Healthcare historically hasn’t done a good job of understanding how much things cost. If you were to go into a Wal-Mart and ask, they know what it costs to deliver a tube of toothpaste and put it on a shelf down to the last penny. But medicine isn’t a tube of toothpaste. Everything is custom and the variation is immense. ICD-10 diagnosis codes have evolved from a few thousand to over 150,000 diagnoses in just a few years. That’s the complexity of the inventory that we’re dealing with.

And yet despite this complexity we have to understand our costs before we can succeed under the new rules of healthcare. Understanding the cost of an episode of care affects how an organization negotiates with an ACO, for example. If I don’t know whether a procedure costs $700 or $1,000 a day, I might negotiate the wrong rate with an ACO and end up losing $300 a day on it.

So how do you get to understanding costs? Our philosophy is to take an iterative approach. Even if we have to start with cost-to-charge ratios, which is all most organizations have, we help you figure out what your high-volume procedures cost, and work from there. And rather than trying to map all your procedures to costs, which can take two or three years, we focus on one clinical area at a time to gradually improve quality and cost in an iterative fashion. Over time, the process is expanded to other clinical processes until eventually you have the data you need to track costs as well as improve care in every area.

People First

At the end of the day, the ability to transform your system depends more on people than data. As AHA’s Strategy No. 1 notes, you have to find people who are passionate about leading the process of change. We always start with clinical champions, people highly motived and interested in making change. We believe it’s critical to identify these champions in different departments and bring them together with a common goal. Part of our “magic sauce” is building these cross-functional teams of committed people to work together on the clinical process they’re closest to.

When we do an installation it includes our technology and clinical improvement services, drawing people together to develop and build in a best practice. We train people to work together and move a project along so that, when we finish, they can go on to do it without us. We teach them how to be consultants and deal with all the people who touch the process or procedure they’re trying to improve.

It’s the old Chinese proverb in action: Give a man a fish and you feed him for a day. Teach a man to fish and he can feed himself for a lifetime.

The AHA has rightly determined that developing a value-based organization is a journey. They’ve laid out strategic priorities that highlight critical areas hospitals need to address to make progress. Starting the journey at the right place is equally critical. From my perspective, it all starts with an enterprise data warehouse. Without the right data at the right time, you can’t get physicians aligned (strategy No. 1), you can’t develop and utilize new best practices (strategy No. 2), and you can’t improve efficiency (strategy No. 3).

But with the right data, and the right process to put it to work, any hospital can reach the destination. One data-driven step at a time.

How far along is your organization in adopting the AHA healthcare transformation strategies? What is your experience in trying to adopt the transformation strategies if you don’t have an enterprise data warehouse?

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