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Cost Repositioning – an Institutional Case Study Kandice Kottke-Marchant, MD, PhD Chair, Robert J. Tomsich Pathology & Laboratory Medicine Institute Cleveland.

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Presentation on theme: "Cost Repositioning – an Institutional Case Study Kandice Kottke-Marchant, MD, PhD Chair, Robert J. Tomsich Pathology & Laboratory Medicine Institute Cleveland."— Presentation transcript:

1 Cost Repositioning – an Institutional Case Study Kandice Kottke-Marchant, MD, PhD Chair, Robert J. Tomsich Pathology & Laboratory Medicine Institute Cleveland Clinic

2 Cleveland Clinic’s Cost Repositioning Approach

3 Cost Repositioning Objectives Provide value and ensure affordable care for patientsProvide value and ensure affordable care for patients Leading innovation in changing industryLeading innovation in changing industry Transformational cost structure changesTransformational cost structure changes Balancing the shift: volume to valueBalancing the shift: volume to value

4 Cost Repositioning Goals * Implemented Savings (in millions) Clinical Programs & Assets Indirect Non-Staff Staff Stewardship ResearchEducation Value Based Care 20% Overlap Total

5 Org Chart Executive Check In CEO, Chief of Staff, Chief Strategy Officer Task Force Physician-Led with Members Representing: Physician Leadership Administration Nursing Marketing & Human Resources Workstreams Project Management Office Finance Human Resources Marketing / Communications

6 Structure Full engagement & sponsorship of CEO / Chief of Staff Executive Leadership Physician-Led Task Force Workstreams Cross-functional physician, nursing and administrative leadership team Intentionally not aligned with org. structure to encourage transformative change

7 WorkstreamsWorkstreams ClinicalClinical IndirectIndirect Non-StaffNon-Staff StaffStaff StewardshipStewardship ResearchResearch EducationEducation Value Based CareValue Based Care

8 Project Pipeline Idea / In-Process ApprovalImplemented Clinical35174 Education405 Indirect23 teams*180 Non-Staff1054 Research3310 Staff202 Stewardship27188 VBCTBD00 Total134*5922 *Each Indirect team will present numerous ideas As of 4/15/14

9 Specific Pathology and Laboratory Medicine Drivers for Cost Reduction

10 100% Medicare 45-80% of CMS 45-80% of CMS 200% of CMS 406% of CMS 147% of CMS 285% of CMS 452% of CMS* * Reflects new lab pricing; UHC’s current price is 537% of CMS Transparency and Decreased Reimbursement Pathology & Lab Med Cleveland Clinic

11 Additional Drivers Devaluation - -Biopsy codes - -Cytopathology codes Revaluation - -IHC codes Other changes - -Molecular diagnostic billing codes

12 Robert J. Tomsich Pathology & Laboratory Medicine Institute Approach

13 RT-PLM Cost Repositioning Summary Reduce cost per test by 30% How? - -Assess current operations - -Develop enterprise-wide transformational strategies: optimize laboratory resources - -Implement %* % % *2.6% from 2014 budget + 9.4% new in 2014

14 Major Projects Department Reorganization Administrative Reorganization Lab consolidation Pathology sub specialty consolidation Allogen: transplant lab reorganization Preanalytics optimization

15 Big Picture: How We Are Saving

16 Department and Administrative Reorganization

17 Clinical Pathology Dr. Hsi Anatomic Pathology Dr. Goldblum Molecular Pathology Regional Pathology Cleveland Clinic Laboratories Florida Dept. of Pathology Departments Centers Robert J. Tomsich Pathology & Laboratory Medicine Institute 2013 Dr. Marchant, Inst. Chair/ J Seestadt, Admin D Helmick, Finance Director Laboratory Medicine Dr. Hsi Molecular Pathology Dr. Goldblum Preanalytic Services Family Health Centers Pathology Informatics Biorepository Research Education Internal Assessment & Compliance Continuous Improvement Test Development Regional Pathology Cleveland Clinic Laboratories Dr. Bosler, Head Dr. Stagno Vice Chair of Operations Enterprise Test Utilization/Consultation (NEW) Dr. Procop

18 Administrative Restructuring st Tier: Clinical Operations FORMER: 41 FTE REVISED: 23 FTE* REDUCTIONS: 13 FTE 2 nd Tier: Lab Med and Preanalytics FORMER: 45 FTE REVISED: 34 FTE REDUCTIONS: 12 FTE Align management (regional hospitals) Accountability Supervisor + team leader/coordinator Non-Clinical Operations FORMER: 25 FTE REVISED: 23 FTE REDUCTIONS: 2 FTE CP AP MP RP FHC PreA Lab Med PreA Path Lab Admin Quality Informatics Finance Education

19 Lab Consolidation

20 Lab Medicine Consolidation – Why? Increased efficiency and decreased cost/testIncreased efficiency and decreased cost/test Enterprise subspecialty lab oversightEnterprise subspecialty lab oversight Standardize enterprise quality and complianceStandardize enterprise quality and compliance Enterprise-wide oversight of laboratory operations and preanalyticsEnterprise-wide oversight of laboratory operations and preanalytics Consolidated pre-analytics will improve quality and decrease errorsConsolidated pre-analytics will improve quality and decrease errors

21 H H Fairview Hospital Lakewood Hospital H H Lutheran Hospital H H Ashtabula CMC H H Euclid Hospital H H Hillcrest Hospital H H South Pointe Hospital H H Marymount Hospital H H Cleveland Clinic H H Medina Hospital Following the completion of lab and pathology consolidation, main campus will ultimately see about a 32% increase in billable tests.

22 Lab Consolidation Process Highlights Enterprise Optimization Committee - -Members from across the enterprise – Hospital presidents/COO pathology and laboratory medicine (SME) Nursing IT, logistics, preanalytics, finance, quality - -Defining required service levels between main campus and regional hospitals. - -Scope: Daily draw times, standardization, TAT, couriers (q2hr), billing, communication

23 Lab Test Consolidation Plan

24 Pathology Consolidation - Why? All enterprise pathology specimens with subspecialty signoutAll enterprise pathology specimens with subspecialty signout Improve histology and cytopathology processing efficiency: decrease cost/testImprove histology and cytopathology processing efficiency: decrease cost/test Pathologist RVUs 80 th percentile targetPathologist RVUs 80 th percentile target Standardize frozen section & cytology rapid reads - ePathologyStandardize frozen section & cytology rapid reads - ePathology

25 Pathology Consolidation Professional Subspecialty Service Model - -Frozen Section Coverage - -Surgical Pathology & Cytopathology subspecialty plan - -Credentialing Consolidate Technical Operations - -Accessioning, specimen tracking, courier deliveries, histology, cytology, billing, etc. Facility & Equipment Prerequisites - -Main campus office space - -Biopsy cell - -Digital scanners and web cams - -Scheduling system

26 AP Consolidation (Regional to Main) 2013 Workload by Subspecialty Subspec. Wt. FTE Need^ GYN 2.82 GI 2.06 Breast 1.06 SFT 0.92 Ortho 0.90 GU 0.77 HPB 0.66 ENT 0.44 Derm 0.30 PUL Cyto 2.15 BM/Lymph 1.25 (EH)

27 Pilot Metrics Lost specimen rate by site of origin Critical Value Performance for test that are moving # calls to AP pathologists for coverage (New for AP) Clients Service performance metrics % or # of STAT orders for tests that are moving Length of stay metrics by hospital TAT for top 10 tests by volume AP Bx TAT Logistics Measures - -% on time pick ups and % of scheduled pickups complete - -Duration of routes and time spent at each site for pickup % that short notice Pathologists arrive within 60 minutes (New to Pathology) Revenue - -Denial Rate performance Productivity Impact - -Earned FTE vs. Actual FTE at pilot sites (Productivity Report)

28 RT-PLMI Cost Repositioning 2014 Timeline August May June July Approvals granted Dept + Admin Restructure First Pilot Meetings with Lutheran and Marymount First RT- PLMI Ent. Opt. Meeting September October New Managers Hired 2 nd Tier Reorg Pilots Begin December Pathology Consoli- dation

29 Percentage of Savings = 9.4% Total 2014: 9.4% new in % from 2014 budget

30 ChallengesChallenges Long-term, multi-year transformationLong-term, multi-year transformation Change throughout organizationChange throughout organization Aligning annual planning timeline / processAligning annual planning timeline / process Organizational engagementOrganizational engagement Communication to all stakeholdersCommunication to all stakeholders Setting service level expectationsSetting service level expectations

31 “….the pathway to improving quality and safety is the same pathway to lowering cost, and that involves relentlessly taking waste and unnecessary variability out of our processes.”

32 Questions?Questions?

33


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