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GPOs – Valued Partners in Healthcare
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The healthcare group purchasing organization (GPO) members of HSCA work closely with their provider partners across the continuum of care to reduce cost, add value, and improve outcomes for patients. Below you'll find some narratives that help to demonstrate why GPOs are valued partners in healthcare.

 

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University of Pittsburgh Medical Center Adds $30 Million to Bottom Line

Posted By HSCA, Thursday, January 14, 2016

In 23 years, University of Pittsburgh Medical Center (UPMC) has aggressively grown from a single medical center to an integrated global health enterprise that boasts 20 hospital locations with 4,500 licensed beds, more than 400 outpatient sites, 55,000 plus employees and $10 billion in annual revenue. In the summer of 2012, UPMC East, a newly constructed hospital near Pittsburgh in Monroeville, Pennsylvania, will open and add another 156 beds and seven operating rooms.

In 2005, UPMC selected MedAssets to support its goals for supply chain and revenue cycle management automation. The ability to drive contract compliance and improve productivity using MedAssets Procure-to-Pay Solutions has resulted in exceeding world-class benchmarks and, most important, creating a $30 million positive impact to UPMC’s bottom line. Also, by enabling linkage between the health system’s supply chain to the revenue cycle, MedAssets Cost Analytics support correct and complete billing for optimal revenue enhancement, on a daily basis.

Challenge

Supply Chain Management

UPMC buys supplies in tremendous volume—with $1.8 billion in spend, 4,000 purchase requisitions processed per week and 70,000 invoices per month all managed by a 370-member team. In addition, 1.1 million packages come through the central distribution center annually. Like many other healthcare purchasing organizations across the country, UPMC was struggling with waste and inefficiency even though they had taken steps toward automation with another vendor’s system. Despite the technology investment, its supply chain remained completely paper-based. Generic descriptions on requisitions frustrated end users and caused a 20-day backlog on purchase orders. Contract compliance was limited with more than 50 percent of UPMC’s purchases occurring outside of the established supply chain processes. UPMC implemented MedAssets Contract Catalog database and Cost Analytics tools to manage data and reporting.

Access and Reimbursement

Related to Revenue Cycle processes, UPMC’s Patient Financial Services department manages the full continuum of services—from pre-registration and patient access, to claims submission and follow up. According to Don Riefner, twenty-three year veteran and UPMC’s chief revenue officer, while collaboration between the supply chain and revenue cycle functions is key to proper reimbursement, little of it existed between these two areas. Riefner asserts that information technology has been the linchpin of the organization’s success in meeting the integration needs necessary to maintain the highest level of care for patients while accommodating the exploding volume.

“The Charge Description Master (CDM) is where the supply chain meets the revenue cycle,” he explains. “The supply item needs the correct billing code (HCPCS) for charges to be captured. The same correct HCPCS code is needed for clean claim processing so that the hospital gets paid. At UPMC, like all hospital revenue cycle departments, we’re dependent on our patient accounting system. Our aging system, however, didn’t offer the functionality for the CDM to be standardized across our 20 different hospitals. Our current technology environment made appropriate coding extremely difficult.”

Solution

UPMC conducted a request for proposal and ultimately selected MedAssets based on a proven track record in procurement, supply chain management and revenue cycle management.

Streamline Purchasing Operations

A team was formed to manage content in the MedAssets Contract Catalog to assure contracts were complete and accurate before entering them into the database. Since 2010, Contract Catalog has enabled UPMC to maintain both local negotiated contracts, such as Physician Preference Items (PPI) for spine implants, as well as MedAssets National Contract Portfolio contracts. The improved quality of data enables UPMC to connect its supplier-hosted catalog with the eProcurement Services MarketPlace, powered by Prodigo Solutions®, tool, providing access to 200,000 items in the online tool used by 7,000+ end users. The Web-based technology also provides streamlined reporting for spend analytics, including a single report to compute the compliance rate.

eProcurement Services MarketPlace was deployed as an extension to the existing PeopleSoft ERP eProcurement module enabling UPMC to move from paper-based requisitions to full e-procurement. eProcurement Services MarketPlace provides detailed descriptions and pictures and drives contract compliance with a single online “marketplace” to buy contracted supplies. Today, more than 900 suppliers are connected to the tool, which includes contract compliant content from a number of sources; the UPMC Item Master, supplier punch-out sites and the MedAssets Contract Catalog.

In 2008, UPMC and MedAssets tackled a strategic initiative to reduce food service spend. With $60 million in annualized spend and more than 900 manufacturers supporting 48 cost centers the food service division of UPMC began a vigorous process of standardization. The process included movement from local agreements to distribution agreements, minimizing non-contracted spend, streamlining SKU’s and standardizing the vendor and distribution paths UPMC, with the support of MedAssets, also conducted a collaborative analysis detailing potential areas of opportunity.

Two food distributors were added to eProcurement Services MarketPlace and the MedAssets Cost Analytics tool was used to aid in contract management, compliance, consistency and pricing validation. Buying patterns of the internal staff were adjusted and a reverse order guide was implemented. “UPMC and MedAssets are managing food costs like no other hospital system,” says Brenda Jones, UPMC’s senior sourcing agent. “We’re a healthcare system that thinks like world class retailers leveraging all our buying power. MedAssets enabled the process for success—UPMC’s ability to purchase in volume, minimize the manufacturer base and standardize products. Enhanced management of the distribution chain results in better control of purchasing decisions and lowering costs while not compromising quality or patient satisfaction.”

Revenue Performance Improvement

Related to revenue cycle, MedAssets also led the UPMC Patient Financial Services team through standardization of the charge description master. UPMC used MedAssets CDM Master® solution to transition from multi-hospital charge description masters to a single corporate standard to make it easier to access appropriate coding for correct billing. In addition, a built-in repository serves as a reference manual to look up Medicare CPT codes. By finding missing codes, MedAssets technology is supporting UPMC staff to know that anything that can be charged will be charged, providing additional revenue enhancement.

Results

“UPMC’s supply chain is highly automated,” states James A. Szilagy, UPMC’s chief supply chain officer. “Technology is enabling us to drive more automated transactions and to dedicate fewer FTEs to tactical activity than other companies. We can point to 25 FTEs, at a minimum, that were redeployed or eliminated because of automated processes. In all, MedAssets procurement automation tools supported the ability to enforce contract compliance have delivered $30 million to UPMC’s bottom line.”

UPMC went from a 20-day backlog on purchase orders to less than a two-day turnaround, which far exceeds the industry standard. Within 10 months, UPMC’s purchase order transactional productivity rose to a level that is more than 245 percent above the industry average and 58 percent above the world-class benchmark. Invoice transactional productivity, the cost to process an invoice, also tops the highest industry benchmarks. Because the process is now electronic, UPMC’s rate is more than 40 percent below the world-class benchmark. Processing cost per purchase order has improved by 18 percent and is significantly lower than both the cross-industry average and the world-class benchmark.

As a result of eProcurement Services MarketPlace, UPMC processes 100,000 purchase order lines per month and 81 percent of those are now processed from requisitions that start in eProcurement Services MarketPlace, effectively creating contract compliance at the point of requisition. In addition, 45 percent of the purchase orders automatically generated from those requisitions are sent electronically via electronic data interchange (EDI) exchange directly to the vendor without any buyer involvement. Since the creation of the catalog team, and new processes to support data integrity, UPMC has reduced the EDI pricing discrepancy rate by 92 percent. The error rate of 1.54 percent translates to fewer vendor invoices failing as a match exception on the ERP system.

“MedAssets technology coupled with improved processes has given us more efficient and reliable spend analytics coming out of the Spend Analytics Basic tool,” states Lynn Koziak, UPMC’s director of finance for supply chain management.

“UPMC’s overall objective is to drive supply chain efficiencies by rationalizing spend, lowering purchasing and products costs such that more volume flows through high quality preferred suppliers, while increasing patient satisfaction. Food costs cannot be overlooked,” states Jones. “Working with MedAssets and changing internal processes is the driving force to our ability to lower costs.” In 2010, successes of this methodology yielded UPMC $2.4 million in MedAssets contract savings and $1.4 million in locally negotiated contract savings. Further, 100+ manufacturers were reduced to seven (7) yielding an additional $800,000 in savings.

Cost Analytics provided visibility into spending on food contracting services to realize $2.4 million in contract opportunities and  $1.4 million in rebates with locally negotiated vendors. Examples can be seen in many of UPMC’s market basket, one significant area reviewed was the protein line. Eighty-six manufacturers were utilized at a spend of $3.2 million, today UPMC uses five manufacturers and successfully realized a savings of $335,000. UPMC has many examples where standardization and streamlining have “paid-off.” In 2010 UPMC successfully remained 2 percent below the inflationary rate of 5 percent throughout the year.

“MedAssets is a perfect fit for UPMC into the future,” adds Riefner. “Hospitals rely on specialized technology, like CDM Master, to automate the functionality of today’s aging patient account systems. MedAssets has been key to our ability at UPMC to meet our mission of integration.”

Tags:  Cost  MedAssets  Pennsylvania 

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Member Best Practice Spotlight: Verde Valley Medical Center – Medication Strategy for Value-Based Performance

Posted By HSCA, Thursday, January 14, 2016

As we recognize American Diabetes Month, this week’s blog post looks at how Verde Valley MedicalCenter initiated a medication compliance program to benefit patients with chronic conditions including diabetes.

Issue
Verde Valley Medical Center’s (VVMC’s) performance data identified an opportunity to meet the needs of the diverse local community of Native Americans (Yavapai Apache Nation), Mexican immigrants and senior citizens who face challenges in medication compliance.

Solution
Through a collaborative effort involving pharmacy, nursing and medical staff, VVMC identified the most common medications a patient is prescribed at discharge and developed unique cards to enhance performance outcomes – 18 “drug family” cards and two “take home facts” information cards. The cards are provided to patients during care as medication is dispensed and at discharge during medication reconciliation. This gives the caregivers and the patients easy-to-understand information “in hand” and provides the opportunity for caregivers to have ongoing discussions with patients, especially in the management of chronic conditions – diabetes, cardiac and respiratory therapy, as well as pain and antibiotic use.

Outcome
The data improved from patient satisfaction and government mandated value-based purchasing perspectives. Re-admission rates decreased while patient satisfaction, education and discharge instructions increased. Additional stakeholders in the community were identified.

About Verde Valley Medical Center
Formed in 1939, Verde Valley Medical Center is a full-service, 99-bed, non-profit hospital serving North Central Arizona. Four locations serve the Verde Valley and surrounding communities: Cottonwood campus, Sedona campus, Camp Verde Health Center, and Village of Oak Creek Health Center. More than 800 professional and support staff are employed at VVMC. The Medical Staff is comprised of nearly 100 physicians representing 25 medical specialties. We are a member of Northern Arizona Healthcare, which also serves patients through Flagstaff Medical Center, Northern Arizona Homecare and Northern Arizona
Hospice.

Tags:  Arizona  Intalere  Safety/Quality 

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Seattle Children’s Achieves $965,000 in Additional Realized Value

Posted By HSCA, Friday, October 16, 2015
Updated: Friday, November 27, 2015

CHALLENGE

Seattle Children’s wanted to improve its supply pricing and benchmarking, as well as obtain leverage to improve vendor negotiations, when it signed up for Vizient's Predict|Price Performance solution in August 2013. And while Dan Salmonsen, Seattle Children’s director of strategic sourcing and value analysis, felt that the hospital’s item master was in fairly good shape, he enrolled in Optimize|Item Master as well.

SOLUTION

The Price Performance solution identifies cost-reduction opportunities and specifically addresses benchmarking needs by helping users:

·         Leverage benchmarking data from the industry’s largest, most robust database comprising more than 7 million products, 2,500-plus hospitals and more than $70 billion in spend information

·         Receive a true market view of pricing trends, including both contracted and noncontracted items

·         Review historical pricing to analyze market fluctuation

·         View trend performance by hospital, vendor manufacturer or the United Nations Standard Products and Services Code® (UNSPSC), and drill down to line-item details

“This is just one tool that I can provide my employees for their toolbox to help them do their jobs and allow us to drive supply savings and help Seattle Children’s reduce costs,” Salmonsen said. While Price Performance has revealed some surprises, it also has provided validation for strategic sourcing. For example, the solution showed that while the department had secured a reasonably good price on a spinal implant request for proposal in 2011, there was still money left on the table.

“We again completed a spine RFP in 2014 and leveraged the price points we now have using the Price Performance tool,” Salmonsen said. The results were positive, driving significant savings. “The tool definitely provides us with significant leverage in many instances like these,” he added.

The solution also provides analysis that reveals vendors’ spend for like items that have been purchased via UNSPSCs. “This gives you significant influence to persuade your incumbent vendors to lower their prices, or move the business to competing vendors who will provide lower prices,” Salmonsen said.

The hospital has achieved cost-reduction success by taking a holistic approach for items it already purchases. “When the Price Performance tool shows that we’re paying too much on one item, we look at the entire book of business with that vendor instead of focusing on just that one item,” Salmonsen said.

He offered this example: Of 10 items purchased from a single vendor, the solution showed a high price index on two items and an average price index on the remaining eight. “By looking at the entire book of business, we’re able to lower the price on all of the items — even those where our pricing wasn’t that bad initially,” Salmonsen said. “We wouldn’t have driven as large a savings if we’d just focused on the two initial items.”

Seattle Children’s also worked Price Performance into its value analysis process for new items. “Previously, we had no way of knowing if the price the vendor offered was market fair, so often, we just negotiated for a target cost savings and accepted the reduction in price,” Salmonsen said. “But now we do know, thanks to these benchmarking capabilities.”

Salmonsen said that Price Performance has helped his organization do something it was not able to do previously. “Because we can now benchmark proposed pricing on new items before they’re approved, we can get in front of negotiations instead of discovering after the fact that we’re paying too much.”

Vizient’s Price Performance provides not only data, but also the expertise to gain actionable results quickly. It also:

·         Reduces valuable time necessary to analyze spend, validate data and synchronize item masters

·         Improves and implements work flow capabilities by monitoring trending, prioritizing opportunity and tracking overall progress

·         Offers efficiencies through enhanced/effective processes using the solutions/support offered through the service

 

 

RESULTS

Seattle Children’s has successfully negotiated 37 new vendor contracts since launching the tool almost two years ago, resulting in more than $680,000 in savings, with an additional $285,000 in cost avoidance.

Salmonsen cautioned his peers that while having an analytics tool is absolutely necessary, the tool itself isn’t all-knowing. “Your data needs to be accurate, and you must do your own due diligence using your organization’s purchase history to see what the true payout will be,” he said.

“Even though you may have Price Performance data that shows your prices to be high in the market, you still have to perform old-school negotiations to reduce your costs,” Salmonsen continued. “Vendors don’t just look at the data and say, ‘Sure, we’ll give you the lower cost.’ But, with this tool, we have a more level playing field with our vendors. They definitely have to come to the table more prepared, and it’s allowed us to hold them more accountable.”

Tags:  Cost  Vizient  Washington 

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Arkansas Children’s Hospital Implements $1.3 Million in Annual Savings in 90 Days With Predict Price Performance

Posted By HSCA, Thursday, October 1, 2015
Updated: Friday, November 27, 2015

Arkansas Children’s Hospital, the only pediatrics medical center in Arkansas, spans nearly 30 city blocks and has 370 beds. ACH has a staff of approximately 500 physicians, 95 residents in pediatrics and pediatric specialties, and more than 4,400 employees. Its physicians are consistently named to local and national “best” and “top” doctors lists.

CHALLENGE

Lisa Farmer is the first to admit she’s a skeptic. To put it simply, she said her job as director of Materials Management requires it. “I listen to people all day every day tell me how great things are — that’s the nature of sales,” she said. “But I’m always questioning things. If I believed it all, we would buy everything from everybody. My job is to find the melody within the noise.”

Arkansas Children’s Hospital transitioned along with Children’s Hospital Association from a competing group purchasing organization in July 2012. At that time, Vizient, the Association’s preferred data and analytics partner, introduced Farmer to its Predict|Price Performance application — the industry-leading benchmarking solution that allows users to gain control of their supply chain, negotiate better prices and increase cash flow.

But Farmer had her doubts. ACH had not used a price benchmarking solution previously, and the recent GPO conversion hadn’t really given her team members time to get their feet on the ground with Vizient. “I wanted to do everything we could on our own and then see where the dust settled,” Farmer said.

Would hearing what her peers had to say about Price Performance and seeing some of its results in the coming months be strong enough evidence to change Farmer’s mind?

SOLUTION

Indeed it was. By May 2014, Farmer saw things very differently. “I started seeing examples of savings from other hospitals,” she said. “When I saw what some of our suppliers were negotiating with other hospitals, knowing our compliance levels were at least the same if not better, I realized then that there was something to Price Performance.”

 

The data intelligence offered by Price Performance quickly made Farmer a believer. “I can look at line-item detail and determine exactly where we fall in the grid — whether that’s in the 10th percentile, the 50th or the 75th,” she said. “And knowing where you fall tells you if there’s any room to negotiate.”

Though still early in the process, the solution already has dramatically improved the physician buy-in process at ACH, particularly with spinal implants. Farmer said, “When I met with the physician, he was blown away by the data. I have to explain to physicians that although their relationships with vendors are valued, those same relationships may be costing our hospital money.”

Previously working with Vizient's other pricing solutions made Price Performance even more valuable for ACH, Farmer added. “We had implemented everything we could within Vizient itself before we moved to this tool, so that allows us to strategically negotiate with vendors even further. Overall, we were right in the middle of the bubble graph, so we didn’t have the best pricing or the worst. Knowing where our opportunity is, I can negotiate to move us further to the left on that grid.”

Price Performance has already saved ACH enough to pay for the organization’s subscription several times over, and hospital leadership is thrilled. “Any time I can put hard dollar savings back on the table for them, it’s a great thing,” Farmer said. “Price Performance allows me to break it down by line item so that I can actually show them what we buy, how many, our old price and our new price. It’s not soft dollars — it’s real.”

Nothing beats the feeling Farmer now has when she enters vendor negotiations. “When I walked in before, I was blind. I had no idea what constituted a good price or a good percentage to go after,” she said. “In my mind, if we saved $400,000, that was a good savings. What Price Performance helped me realize was that there was $800,000 still on the table.”

Farmer called Price Performance a no-brainer if one were willing to put the effort into it. “You do have to work the tool,” she said. “It’s not a fountain where someone has tossed in coins and you just pick them up off the ground — but it’s pretty darn close!”

RESULTS

Farmer had established a Price Performance savings goal of $250,000 in the first year. However, ACH saved $1.3 million in just 90 days, including $804,000 in spinal implants and $354,000 in cochlear implants.

“We had several other savings examples of $40,000 and $50,000, and we’ve had some that were $5,000, but whether it’s a dollar or a million dollars, it’s better than what we were previously paying,” she said. “As we continue to position ourselves for health care changes, this is something we all have to do. Price Performance just allows us to do it in a much more strategic fashion.”

Tags:  Arkansas  Cost  Vizient 

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Intalere Member Verde Valley Medical Center Improves Patient Safety and Reduces Patient Falls by 40 Percent

Posted By HSCA, Friday, September 18, 2015
Updated: Thursday, November 26, 2015

The Challenge

Nurses are widely recognized as the foundation of the healthcare system. Oftentimes, they are the leaders in helping an organization achieve successful outcomes in clinical, patient safety, operational quality and regulatory compliance. And with the advent of pay-for-performance models, registered nursing is becoming an increasingly important job with enhanced responsibilities. Such is the case at Verde Valley Medical Center (VVMC) in north central Arizona. When the number of patient falls was rapidly rising within the organization, it was the nursing staff that took the lead at addressing the issue and helping to create a system-wide improvement initiative. 

VVMC began as a small outpatient clinic in 1939, but has since grown into a full-service, 99-bed, nonprofit hospital with four locations and more than 800 professional and support staff. VVMC is a member of Northern Arizona Healthcare, which also serves patients through Flagstaff Medical Center, Sedona Medical Center, Northern Arizona Homecare, Northern Arizona Hospice and multiple outpatient clinics.

“Our organization had policies in place and a system for reporting patient falls, yet our fall rate increased significantly in one year,” said Cat Singletary, manager for Performance Improvement and Regulatory Compliance at VVMC. “Clearly something was broken and our nursing staff was instrumental in telling us what works, what doesn’t and what needs to change. They are in the trenches every day and they have the best understanding of how to help make the care we provide to our patients better.”

The Solution

The Quality Department at VVMC created a multi-disciplinary committee from Nursing, IT, Pharmacy, Therapy Services, Risk and Compliance Departments of both VVMC and Flagstaff Medical Center. This new Falls Prevention Committee met monthly to review huddle sheets, event reporting, policy, equipment, patient and staff education, documentation procedures, etc. 

“The Falls Prevention Committee requested that both facilities conduct a baseline assessment and to interview staff. Internal audits were conducted and the data was shared with the committee. This information was critical in identifying the gaps in our processes and procedures,” noted Singletary. 

One example, the nursing staff was not completing the huddle sheet because it was too cumbersome and it did not mirror the fields in the patient events reporting system (Remote Data Entry (RDE)). 

Another example, the patient alarms were used sporadically since policy did not state it was a requirement. In addition, VVMC’s staff worked with their Evidence Based Practice and Research Department to identify best practices on patient falls.

“Our goal is to provide exceptional care, always. Through our research, we identified that educating the patient and their caregivers was key as well as posting visual prompts in the rooms to remind patients to ‘call, don’t fall,’” said Lori Stevens, VVMC’s Director of Nursing.

At the conclusion of the assessments, interviews and evidence-based research, the Falls Prevention Committee took several weeks to develop and then launch their initiative across the organization.

First and foremost, forms and policies were updated and standardized. The post-fall huddle sheet was condensed and the information being captured was aligned with the information in the RDE system. The committee worked closely with Intalere’s supplier Posey to test and roll out new chair, bed and bathroom alarms on all units of both hospitals – which are now required for all patients and even documented in the huddle sheet, RDE system and patient medical record.

Nurses have the greatest amount of patient contact during hospitalization and are the best suited to assess the risk for patient falls. This is where attention was focused. 

“We updated our training documents, posted educational flyers, attended daily huddles, revised our mandatory falls learning module and conducted several other education sessions for our staff.  All in all, we touched more than 1,000 nurses through this process. Nurses are most likely to witness falls and have the greatest power to prevent falls. Therefore, providing them the education and tools they need to be successful was the focus point for our initiative,” noted Stevens.

VVMC took a more proactive approach to new patient and family education than it had in the past. Call Don’t Fallsignage was placed in all patient rooms and bathrooms.

Plus, the community was invited to a Health and Safety Fair at its facility which included education about falls prevention and other population health management issues, but also offered additional activities including blood pressure checks, eye screenings and well woman health checks.

The Patient Falls Committee also implemented STATIT, a real-time analytic software program that is geared towards continual improvement. This program provides users a simple yet powerful means to access, track, trend, analyze, compare and contrast data in ways that provide insights from which to make objective, sustainable and defensible decisions.

By utilizing STATIT, both hospitals were able to collect data, identify trends and provide high quality fall reports to the nursing units and senior leadership. 

Singletary commented, “Through this whole process we discovered the importance of keeping patient falls at the top of our minds. Our Quality Department now attends all patient care huddles. These huddles happen every morning, Monday through Friday, for about five to ten minutes. Patient falls are reported on at each huddle, every time. Simply having this brief overview and knowing how many high-risk patients are currently in the unit can really impact the care we deliver to our patients.”

The Outcome

In nine months since implementing the new Patient Falls Initiative, VVMC achieved over 40 percent decrease in falls. This alone represents tremendous savings to the organization considering The Joint Commission reports that the average increase in a hospital's operational costs for a serious fall-related injury is more than $13,000, and the patient's length of stay increases by an average of 6.27 days.

“This was a huge quality improvement effort for our organization – the first large collaborative effort to create one unified nursing process between systems. Not only did we standardize processes between two hospitals, but we increased the safety of our patients, increased patient and family satisfaction and reduced the costs associated with patient falls,” said Singletary.

Costs for implementing the recommendations of the Patient Falls Committee were nominal to the organization. Most costs were associated with staff time at meetings and revising policies and forms. The Call Don’t Fallsignage was printed in-house to reduce expenses and the Supply Chain Department utilized the Intalere agreement with Posey for purchasing the new alarms.

Using best practices and listening to its staff continues to be a focus for the system. The organization is continuing the positive momentum by testing new shower chairs in its post-surgical care unit since the nursing staff voiced the need for a wider and sturdier chair to help prevent falls. 

“I’m extremely proud of our nursing team and the entire organization for their commitment in identifying patients at highest risk for falls and for developing falls-prevention strategies. While not every patient fall is preventable, I believe that the right combination of education, technology, care processes and focus can reduce the number of falls significantly and, more importantly, the injuries to patients they often cause,” said Stevens.

Tags:  Arizona  Intalere  Safety/Quality 

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GNYHA Services Partners with Hospital Colleagues to Reduce Infection Rates

Posted By HSCA, Tuesday, September 15, 2015

Several years ago, the team at GNYHA Services partnered with our GNYHA hospital colleagues to address central line-associated bloodstream infections (CLABSIs). Through an Association-based CLABSI reduction collaborative, area hospitals became aware that patient care workers often lacked the proper materials required to insert a central line at the point of care, prompting them to improvise with other supplies. Over time, this practice increased the infection rate.

Through the collaborative, GNYHA Services worked with an interdisciplinary CLABSI reduction team to develop central line kits. These kits packaged all of the supplies needed to insert a central line (drape, tubing, catheters, gowns, etc.) in one bundle. When area hospitals adopted these kits, CLABSI rates in the ICU dropped by 54%, with 53% of collaborative hospitals reporting no infections for six or more consecutive months. This case is just one example of the power of supply chain innovation to solve a problem and foster a significant overall improvement in patient outcomes, ideally leading to shorter hospital stays and fewer readmissions.

Tags:  GNYHA  New York  Safety/Quality 

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Community Health Network Improves Workflow Process Supported by Technology to Realize $26.7 Million in Cash Improvement

Posted By HSCA, Tuesday, September 15, 2015

Challenge

Ranked among the nation’s most integrated health systems, Community Health Network (CHN), set out to accelerate revenue cycle performance during a system-wide organizational improvement initiative. Sustainable revenue for one of Central Indiana’s largest not-for-profit health systems depended on elevating key performance indicators for its four Indianapolis hospitals from historically good levels to best-practice levels.

“We recognized the need to bring in support to help us reach the next level of revenue cycle performance,” says Charles Meadows, CHN’s vice president of Revenue Cycle. “Inconsistencies from the point of scheduling continuing through bad debt write-offs on the back-end within our revenue cycle process caused multiple missed revenue-collecting opportunities.”

CHN operates a central business office (CBO) covering Patient Access and Patient Financial Services (PFS) for its four Indianapolis hospitals. Yet only 18 percent of pre-visit revenue passed through the central business office (CBO) patient access processes. Also, over reliance on manual efforts prevented these revenue-critical functions from collaborating to fully resolve accounts; all factors holding back productivity and revenue potential for the system.

“We wanted a lasting financial impact on our revenue cycle performance,” says CHN’s chief financial officer, Jeff Kirkham. “If we created an exceptionally efficient revenue cycle that aligned people with best practices and technology, then our staff would be empowered to completely and accurately collect reimbursement for the care we deliver.”

Solution

CHN leadership engaged MedAssets Performance Improvement Consulting to drive a year-long, end-to-end revenue cycle performance improvement engagement for the health system. The engagement extended an existing agreement with MedAssets for revenue cycle technologies, to include comprehensive revenue cycle consulting and the implementation of additional solutions. “MedAssets consultants have the expertise to redesign workflows to increase accuracy and productivity within the revenue cycle. And they have the tools required to sustain it,” says Meadows. “Their repeated success with improving revenue performance at other health systems further proved our ability for future sustainability,” he adds.

Mapping Workflow to Industry Standards

Working with CHN leadership and front-line staff, MedAssets team members methodically isolated and mapped every administrative workflow, process and procedure from the front-end to the back-end of the revenue cycle. A collective, versus isolated, review of revenue cycle processes and responsibilities enabled CHN employees to evaluate holistic adjustments or specific departments’ needed changes.

“We didn’t realize the full potential for performance and organizational change until we engaged the consultants at MedAssets—and they quantified the potential revenue improvement of at least $25 million for our system,” says Meadows. “The ROI potential was real.”

Consensus Building towards a Best-for-CHN Performance Strategy

Operational findings, data retrieval and insights from interviews with more than 100 employees became the framework for CHN’s go-forward CBO strategy for revenue cycle management. MedAssets fostered consensus for a new organizational plan rooted in proven best practices—and adapted to CHN’s preferences.

“They did a lot of listening first,” said Meadows. “MedAssets consultants did not just spend time with me and other management at CHN. They sat elbow to elbow with schedulers, billers, coders and A/R reps who work our patient accounts every day to hear what works and what doesn’t work at CHN.”

After thoroughly assessing people, processes and technology, MedAssets presented to CHN leadership the strategy for improvement. Once approved, MedAssets managed a nine-month implementation plan to meet key financial performance targets.

The Shift from Centralized to Synchronized

At the heart of the implementation was a multidisciplinary central command in patient financial services to collectively track progress and address challenges during the phased rollout. “We called it the War Room,” said Meadows. “Key performance metrics covered every inch of all four walls. It’s a collaborative communication effort we maintain to track metrics.”

Another key change initiative focused on high-dollar patient account review. The meetings fostered critical collections transparency and allowed data sharing and communications between departments. “Every week, staff from Patient Access, Case Management, Financial Counseling and Medicaid Enrollment meet to review patient accounts totaling $30,000 in charges or more,” explains Meadows. “This team proactively confirms authorization and patient liabilities and explores every other potential source for payment. We generate a bill for services with no doubt in our mind what will be reimbursed.”

Processes Supported by Technology

Major initiatives implemented at CHN consisted of department reorganization in Patient Access, Health Information Management and PFS departments. CHN approved the creation of functional processes, new job descriptions and responsibilities. MedAssets consultants trained staff and facilitated adoption of new quality and productivity measurements.

Added MedAssets solutions now autnnomate manual processes to centrally identify patient-pay collections, verify insurance coverage prior to care, identify reasons for denials and pinpoint underpayments. The automation also created a closed-loop feedback process in the CBO. Reasons for denials circled back to the front-end to continuously identify root causes and fine tune processes to prevent future account errors.

“With this level of organizational change and collaboration, we experienced a good bit of nervous energy throughout the system,” notes Meadows. “Early staff consensus coupled with the support of leadership from day one helped us maintain focus and mitigate challenges. And our multidisciplinary teams really championed the potential for what we could achieve.”

Results

Since working with MedAssets, CHN has realized a 20 percent increase across many key performance metrics. Cash improvements totaled $26.7 million; $12.6 million of that total reflected income statement benefit. “It’s an improvement that we’re confident we have the tools to sustain,” says Meadows.

Transparency and Accountability

Beyond the initial result to reduce backlogs, CHN is now equipped to avoid them. Sharing more data across the system helped CHN to reduce denials and increase cash collections, and equally as notable, process changes within departments created more transparency and accountability throughout the revenue cycle. “We now have data and technology supporting best practice processes to proactively prevent revenue backlog,” notes Meadows.

CHN continues to build on its organizational performance improvement successes, expanding their engagement with MedAssets to assess the system’s case management department.

“MedAssets guided the significant shift our operations needed, and helped us view our business in a way that we were never able to before,” says Kirkham. “We could not have achieved these results on our own.”

Key Performance Metrics

  • Reduced A/R days by 23 percent (56 to 45 days)
  • Reduced A/R over 90 days by 25 percent
  • Reduced denial rate by 47 percent, (8.6 percent to 5 percent)
  • Increase point of service collections by 50 percent

By CBO Department

Patient access department

  • Implemented centralized pre-visit function centralizing 62 percent of revenue, up from 18 percent
  • Added infrastructure to support a 50 percent increase in point of service collections
  • Automated patient eligibility verification and self-pay calculations with MedAssets Patient Access Solutions
  • Increased staff productivity by 100 percent
  • Achieved 100 percent individual staff productivity (from 8–15 accounts to 18–38 accounts processed daily)
  • Saved $50,000 monthly due to renegotiated Medicaid eligibility vendor contract
  • Implemented centralized pre-visit function centralizing 62 percent of revenue, up from 18 percent

Optimize financial performance

  • Increased coder productivity standards and credentialed coders (81 percent of staff, up from 30 percent)
  • Insourced coding function which resulted in $225,000 annual savings
  • Reallocated staff and reduced budgeted full-time staff by 3 or 4 percent
  • Outsourced transcription, saving nearly $918,000 annually
  • Achieved lowest discharged not-final-billed claims levels
  • Implemented and trained five functional teams
  • Implemented productivity standards and quality assurance program, with employee score cards
  • Increased A/R rep productivity to 50 accounts/day
  • Patient Access and Denials Management Solutions
  • Adjusted all payors to post payments electronically

About Community Health Network

The not-for-profit health system includes:

  • Employees: 11,500
  • Physicians: 2,000
  • Beds: 1,000+ beds
  • Inpatient admissions: Nearly 45,000
  • ER visits: 231,190
  • Surgeries: 106,336
  • 2010 revenue: Approximately $2.9 billion
  • web: www.eCHN.com

Revenue Performance Improvement Consulting

  • A/R days reduction: 23 percent
  • A/R over 90 days reduction: 25 percent
  • Denial rate reduction: 47 percent
  • POS collections increase: 50 percent
  • Cash improvement of $26.7 million
  • Realized a 20 percent increase across multiple KPIs

Tags:  Cost  Indiana  MedAssets 

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Intalere Member Yavapai Regional Medical Center Saves More than $850,000 on Physician Preference Items through Intalere’s Clinical Advantage Solution

Posted By HSCA, Tuesday, September 15, 2015

The Challenge

Yavapai Regional Medical Center in Prescott, Ariz., a two-facility acute care hospital-based IDN, was faced with the realities that challenge many healthcare facilities today – ever-shrinking margins.

“We were looking at challenges in the organization related to reduced margins,” said Dorance Dillon, director of Supply Chain Management at Yavapai. “With our case mix, in essence 75 cents of every revenue dollar was coming through a combination of federal and state reimbursement. With that, facing continued shrinking margins, we needed to do something.” 

Among their strategies, Yavapai worked with a consulting group to engage their entire organization in Lean process principles and more fully partnering with a group purchasing organization to drive cost savings. “We selected Intalere for reasons that involved attention to detail, supporting us operationally, and also from the standpoint of the identified savings that Intalere can and would provide,” said Dillon.

One of the biggest challenges Yavapai faced was in the area of physician preference items (PPI). Almost half of all the medical surgical supplies used in U.S. hospitals are physician preference items (PPIs), including devices and implants. Yavapai’s major areas of spend revolved around those including cardiac rhythm management, total joint reconstruction for hips and knees, spine hardware, bone products and trauma/fracture management implants.

The Solution

Through their Intalere Clinical Advantage® program (ACAP), a proven strategy for reducing high-dollar implant costs while positively impacting clinical outcomes and physician support, Intalere immediately set about collecting data and conducting a market analysis. With hundreds of members across the country, Intalere was able to provide benchmarks and pricing information to bring context to the price points Yavapai was paying. Yavapai was then able to leverage this benchmarking and price point information to reduce their operational costs or direct pricing on the products.

Gaining physician support and buy-in is an absolutely critical piece to the success of any PPI project. Engaging and collaborating with physicians to develop key relationships supported through evidence-based outcomes is a foundational piece of the Intalere Clinical Advantage program. 

“The ACAP team had the ability to engage our medical staff to obtain these price points and do that without offending any of our medical staff physicians,” said Dillon. “They presented the data and information while also explaining very specifically how they arrived at those numbers, including taking into account that Yavapai is in a rural setting.” Dillon and the physicians were also engaged by the way the information was presented to them. “They said these are real prices that you are entitled to. Go back to your vendors and share this.” Using this particular approach served to educate and enlighten the physicians, giving them comfort to understand that the process was not about forcing them to move away from certain products they might have been trained on or been comfortable with, but to support them and help work collaboratively to reduce the expenses associated with the products they used.

The Outcome

Yavapai was able to identify some quick wins and significant savings. In the cardiac rhythm management category, they were able to reduce expenses by 10-15 percent, a savings of $350,000. In the area of total joint replacement, savings was $500,000. “A cost reduction of up to 20 percent is quite significant and these are savings that have trickled right down to our bottom line,” said Dillon. “But just as important, it does not require the physicians to change what they are using and it did not change anything as it relates to the reps that support our organization.” 

A key ingredient Dillon stressed is that while many organizations or potential partners can supply data, how you get from the page to the actual implementation is the true driver of success. It is paramount to have pricing transparency and subject matter experts that can interpret the data to your organization. What is the organization? Where are they? Where do they provide services? Factors such as these affect pricing within the market. “And I think that is where Intalere really shined,” he said. “In terms of their team understanding this organization, coming on site, meeting not only my team members and certain executives within the organization, but also being able to engage the physicians and surgeons where they live and being able to present a very compelling case.”

“Intalere has been a very good partner. They have guaranteed their savings,” said Dillon. “We still have other opportunities to work through, but I could absolutely state that Intalere has come through with flying colors to support what they said they would do.”

Tags:  Arizona  Cost  Intalere 

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IDN saves $1M+ through new PBM relationship

Posted By HSCA, Tuesday, September 15, 2015

CHALLENGE

In any business today, managing pharmacy benefits effectively is a growing concern. Drug costs continue to climb. Expensive specialty drug use and rapidly escalating costs are especially alarming.

“Pharmacy benefits can quickly throw you off balance cost-wise,” said Teena Senicka, Manager, Total Rewards, Riverside Health System in Newport News, VA. “It’s a red flag area of concern.”

In the third quarter of 2013, Riverside began a review of its Pharmacy Benefits Management (PBM) relationship. “We wanted a more innovative approach,” Senicka said. “We needed to look for new ways to drive savings. We wanted a partner to help us develop a custom solution, to take better advantage of our own health system’s resources.”

SOLUTION

An engaged member of Premier, Inc. (NASDAQ: PINC) and winner of the 2015 Norling Award, the health care alliance’s highest member recognition, Riverside turned to Premier. The two partnered in the first quarter of 2014 to launch a program that used Riverside’s resources in combination with Premier’s PBM program administered by MedImpact.

For employees who use the system’s retail pharmacy, there is no copay or it’s reduced. Riverside even developed an app employees can use to order refills via their smart phones. All they need to do is pick up the prescriptions from the in-house pharmacy.

The PBM benefit is woven into employee benefits. For instance, the My Healthy Lifestyle Wellness Program in 2016 will offer new incentives for employees who use the diabetes education program or professional coaching for such chronic conditions as asthma, coronary artery disease and heart failure.

The year-old diabetes program has been a success, Senicka said. Among other things, to promote compliance among employees and dependents, diabetes drugs and supplies in generic and brand categories do not have copays and non-formulary drug prices are significantly reduced. Riverside’s emphasis is on making resources available to help employees or dependents manage diabetes by removing cost barriers.

RESULT

In 2014, year one of the PBM relationship with Premier, Riverside saved more than $1 million – 14 percent of plan drug costs.

“Results have exceeded our expectations,” said Senicka. “Premier is a flexible partner. When we see opportunities, Premier either has a program we can use or will work with us to develop a custom solution. Premier’s innovation and flexibility has produced very tangible results.”

Tags:  Cost  Pharmacy  Premier  Virginia 

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