20151118_Health System Heal Thyself vf.PPTX
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20151118_Health System Heal Thyself vf.PPTX
- 1. Health System, Heal Thyself Creating a scalable and efficient performance management infrastructure December 2nd, 2015
- 2. 2 Improving the value equation across Quality, Service, and Cost of healthcare is a national imperative “Intermountain Healthcare understands ‘best care’ and how to achieve it on a consistent basis; higher quality means significant elimination of waste and significant reduction in the cost of care delivery. Intermountain had the data. Deloitte had the consulting services and the distribution network to make that better care widely available.” Brent James, M.D. Chief Quality Officer Intermountain Healthcare • Decrease variation in processes • Measure the processes and value through analytics • Measure, adjust, measure, adjust… Quality Cost
- 3. 3 The need to respond and anticipate the market shift is driving health systems to focus on managed insights and disruptive approaches to driving sustainable strategic and operational improvements Surmounting Strategic and Operational Imperatives Clinical Transformation Value-Based Care Customer / Patient Engagement Sustainable Margin Operating Model Transformation
- 4. 4 The effectiveness of these strategic and operational efforts is hindered by several factors 1 2 3 Reason 1: Lack of access to performance insights
- 5. 5 The effectiveness of these strategic and operational efforts is hindered by several factors (continued) 1 2 3 Reason 2: Slow adoption of performance management disciplines
- 6. 6 The effectiveness of these strategic and operational efforts is hindered by several factors (continued) Do you know the performance of your Clinically Integrated Network? • Know professional referral and shared patient patterns • Seeing how providers relate to a health system’s existing physician network • See out of network physician clusters Source: Deloitte Network Insight™ Reason 3: Complexity of health system operations 1 2 3
- 7. 7 Current-state inadequacies can be overcome by adopting a next-generation enterprise performance infrastructure Source: Deloitte Center for Health Solutions 2015 US Hospital and Health System Analytics Survey
- 8. 8 The virtuous cycle of performance management is enabled by the fours pillars of modern performance management infrastructure MONITOR & SUSTAIN EVALUATE IMPROVE Performance Content Delivery Performance Methodologies Performance Professionals
- 9. 9 An emerging solution is an Enterprise Performance Management (EPM) platform that supports the pillars of modern performance management infrastructure Methodologies Enable the workflow of performance methodologies Evaluate opportunities for improvement Design and Implement Monitor and sustain Performance Content Manage performance content that matters Process and performance data Measures management Benchmarks Models Delivery Deliver actionable performance insights Dashboards and scorecards Visualization Analysis Reports Alerts Performance Professionals Allow performance professionals to be more efficient and effective in their services as they team with accountable leaders to transform operations in the pursuit of excellence
- 10. 10 Modernizing performance management infrastructure enables health systems to shift the value curve of their performance programs Acquire performance data Manipulate the data into performance insights Opportunities, root cause, measure and monitor Transformation, process reengineering, sustainable margin and change management Status Quo Value-Add
- 11. 11 In general, the industry is only just starting to mature the competencies, disciplines and infrastructure needed to truly transform the Provider health system operating model The current-state maturity of health system performance management infrastructure: Performance Professionals – The level of PI skillsets and resources are fragmented, duplicative, uneven, but improving with the health Quality Improvement movement Methodologies – Initiatives are ad-hoc, no standard PI approach, lack of prescriptive optimization models for PI and process redesigns Performance Content – Performance data governance, capture and management across clinical, financial and operational systems is highly manual and resource intensive Business Intelligence – Delivery of actionable performance insights into the hands of accountable Operations Leaders is not timely, complete, accurate, pertinent, or actionable Developing Advanced LeadingLegend Foundation Source: Deloitte industry observation and opinion
- 12. 12 On a scale of 1 to 5 (1 being lagging, 5 being industry leading maturity), how would you rank your health system’s performance management infrastructure maturity? Pulse Check Skilled Workforce Methodology Performance Content Business Intelligence 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
- 13. 13 The EPM powered performance management virtuous cycle… • What is the efficiency of our many functional departments compared with leading practice and our peers? Benchmarking • Where can we gain the most impact from strategic and operational imperatives? Where is the waste and variation, and how can we monetize it? Opportunities Deloitte Performance Improvement Work Bench, Data for Illustrative Purposes Deloitte Operations Intellect™, Data for Illustrative Purposes
- 14. 14 The EPM powered performance management virtuous cycle… • What are the biggest operational gaps; is it cost, asset efficiency, revenue loss something else? • What are the likely drivers of variance, lower performance and additional costs? Root Cause Analysis Deloitte Operations Intellect™, Data for Illustrative Purposes
- 15. 15 The EPM powered performance management virtuous cycle Improvement Design • What are the best practices to be incorporated into care and operations workflow? Model process transformations; optimize and solve for the ideal operating state; define planned impact and targets Monitor and Sustain • Are we realizing the benefits and targets, are the interventions working, will we achieve them in the required timeframe, is there corrective action we can take? TIBCO Process Modeler, Data for Illustrative Purposes Deloitte Revenue Intellect™, Data for Illustrative Purposes
- 16. 16 EPM The 4 Pillars Enterprise Data Management Capture, Quality, Storage, Delivery Enterprise Data Governance Data Stewardship, Data Councils, Polices & Procedures Enterprise Applications EHR, ERP, Costing, Supply Chain, HR, etc. It is important to evaluate and understand all components of the EPM ecosystem to effectively pursue strategic imperatives Enabling the four pillars of modern performance management infrastructure Preparing, managing, and delivering high quality performance data Governing our complex data ecosystem with discipline and rigor The source of performance data and process insights
- 17. 17 Where the majority of health systems are today? 1. Foundation 2. Developing 3. Advanced 4. Leading • Departmental metrics • Use of spreadsheets / manual processes • Linear approach (annual budget vs. rolling forecast) • Function-driven and siloed • VP-level accountability for excellence • Cross-function process codification • Focus on balanced performance • Line-of-Sight workforce accountability • Collaboration • Application integration • Governed metrics and targets • Business planning integration • Closed loop process and continuous improvement • Performance management culture aligned with strategic planning • Integration with SLAs • 50+ simultaneous PI initiatives supported Think Enterprise, Act EnterpriseThink Local, Act Local Think Enterprise, Act Local In general, it takes 3-5 years to traverse the performance management maturity scale
- 18. 18 A mid-Atlantic regional health system adopted enterprise performance management disciplines and solutions to increase effectiveness and efficiency Lack of Performance Management Infrastructure Without a Health System performance management strategy and delivery approach, each Site within the organization managed its performance reporting and analysis independently. Measurements were defined differently by Site, line of business, hospital, or business unit making it difficult to conduct meaningful performance comparisons Excess PM overhead PM teams were not strategically organized and deployed, leading to lack of focus, reporting delays, duplicated PM labor costs, and gaps in maturity System-wide EPM Over several years, the Health System created an EPM services function led by a newly created VP. Resources were load balanced across the System which included the creation of an Institute for Excellence to drive performance education and skills development Standardized performance data An investment was made in a platform to manage performance data and generate standardized performance monitoring measures designed using the Balanced Scorecard approach to strategy mapping, the use of leading/lagging indicators, and drill- down to evaluate performance variance SOLUTION Industry Leading EPM A model of healthcare performance management maturity, this EPM initiative has evolved to now include an increasing number of business function specific solutions and expansion of the application of the LEAN PI methodology Alignment Drove cross-functional collaboration and sharing of best practices in each Site and across the System to achieve excellent customer service, patient safety, clinical quality, financial and operational performance 2x Increase in Production The number of performance projects supported doubled after 1 year IMPACTISSUE Takeaway Management and clinical leadership are responsible for the performance of the organization. To facilitate their ability to continuously enhance performance, it was essential to create a supportive performance management infrastructure
- 19. Thank You
Notes de l'éditeur
- The entire industry is seeking to pull the levers on the value equation across quality, services and Cost. One of our partners, Intermountain Healthcare, has long been a north star in understanding the need to industrialize Best Care, on a consistent basis – higher quality, eliminate waster, while reducing total and unit costs. Talking point suggestions from Jenn: Many organizations are trying to understand how to thrive in a market where the ground is shifting. Reimbursement is not only going down, but it is shifting in terms of how we get paid for our services. As the industry is anticipating a value-based care environment, how do we respond to this? Does this mean that costs are going down? Not necessarily. Input costs may be on the rise with newer and newer technologies driving our ability to better care for patients and provide a more valuable patient experience, but our ability to administer enhanced care and treat these patients does not necessarily decline. If we are to tackle the value equation, we need to use analytics and business intelligence to effectively steer our organizations. This will allow us to pin-point variability in cost and quality which can hopefully enable to keep bending the cost curve while keeping up with expectations around quality.
- To win this market shift, health systems are attempting to accelerate their performance programs across margin improvement, transformation clinical operations, thriving in a value-based reimbursement environment, and engaging with our once patients who are now increasingly our customers. This has all resulted in an exponentially growing portfolio of performance initiatives, but on a foundation of, in our opinion, an inadequate performance management infrastructure. Narrowing Margins After a period of improved margins tied to US economic gains, many hospitals again face tightening margins. The percent of hospitals with a negative operating margin grew from 9.5% in 2012 to 14.5% in 2013. In addition, average hospital operating margins declined from 3.6% in 2012 to 3.1% in 20131. Unit costs continue to rise out of sync of declining unit reimbursement Payment Reform is fundamentally changing health system operating models The Healthcare Transformation Task Force members, comprising of large healthcare systems, have pledged shifting 75% of their business to value based contracts by January 20202. Providers and payers are increasingly bearing population health risk. Hospitals will take on significant financial risk for patient care, either through contracts with payers or becoming a payer (as an Accountable Care Organization [ACO]) as well as a provider. Between 46-52 million or roughly 15-17% of the population is served by an ACO3. There exists an increasing need for identifying and removing waste and unwanted process variation. The Institute of Medicine reported that in 2014, nearly $765 Billion was lost to inefficiency, redundancy, errors, overutilization and unnecessary variation in clinical practices4. Inadequate Infrastructure Beyond Excel and PowerPoint, Health Systems are currently lacking the necessary infrastructure required to manage their complex and exponentially growing performance management programs with efficiency and effectiveness.
- Beyond Excel and PowerPoint, health systems generally lack the necessary infrastructure required to manage their complex performance management data – process insights, performance measures, models and put those performance insights into the hands of operations leaders so they can take action. Spreadsheets and spreadmarts are not a tenable infrastructure to support the exponential growing number of performance initiatives. Business intelligence is becoming such a part of our management DNA. The speed and scale at which information is available to us to steer our organization can be overwhelming. We need information to make effective and timely strategic and operational decisions everyday and we need the right tools to enable such actions. It is not enough to rely on spreadsheets anymore. Think about the way smartphones and apps have changed the way we live and the speed at which we need and expect information to make daily decisions. Apply that to our organizational management abilities and think about continuing to live in a world where we hear a response “I’ll get that report to you tomorrow” or “let me run some numbers and I’ll get back to you by the end of the week.” The pace at which information can be available to inform strategic and operational decisions has increased tenfold and we as leaders need to mature our approach to leveraging this information.
- Reason number 2. Having worked with scores of health systems across the U.S., we observe there is widely variant degrees of adopting performance methodologies. Broadly speaking, whether it is LEAN, Six Sigma, PDSA – health systems need a pervasive, enterprise-wide, deep and wide adoption of the discipline to identify the opportunities for improvement – where is the waste and variation, Once identified, what to do about it – the many disciplines to test scenarios, redesign processes, apply optimization models to processes; and once your many many performance interventions are in motion, monitoring and sustaining the initiatives to ensure the realization of the benefits. Adoption of performance methodology is haphazard, not extensible and repeatable nor scalable as a general statement of the current state. There are certainly health care leaders to learn from, and many laggards, and the entire U.S., healthcare industry can learn from other industries that are far more mature in their performance disciplines.
- The days of knowing our LOS, cost and profit as the Key Performance Indicators to drive improvement and operating model transformation are far behind us. Health system operations are vastly more complex and demand ever more sophisticated performance management techniques to understand, improve and sustain change. A case in point as we see an increasing need to understand complex clinically integrated physician networks – we need to understand referral patterns, shared patient patterns, asset efficiency, and coverage of customer demand – no easy task from all perspectives - data, analytics, governance, and process design. Movement to ICD10 from ICD9 is indicative of the direction US healthcare is moving..more complexity. We have more choices and more accountability to operate as effective stewards for our patients and our organizations; however, that job is not getting easier. The ability to inform strategic decisionmaking is getting more important as we think about disruptive operational approaches like business partnerships, M&A, SL management, etc. Our ability to use information to drive complex decision-making is key to our success.
- Findings from a Deloitte survey suggest that value-based care is a major driver and investment focus for analytics. Improving clinical outcomes, population health, and supporting new payment models are among other top drivers. Several respondents indicated their current analytics capabilities are limited to reporting, data warehousing, and business intelligence. However, adding forecasting and advanced analytics capabilities, particularly for clinical and population health analytics are among top priorities. Those who have invested in more mature capabilities, such as forecasting, report greater success with analytics for their business functions. And, the more success organizations achieve, the more likely they are to invest in additional advanced analytics and benefit in the future. Despite these investment priorities, some respondents indicated they do not have a clear picture of their organization’s total investment and spending on analytics. Fifteen out of the 50 respondents said they are unsure about their current and projected spending on analytics. This may be explained by an incoherent approach to the issue. Thirty out of the 50 respondents did not believe their organization has a clear, integrated strategy and vision for analytics deployment. Further, organizations indicated culture and politics and fragmented ownership as top barriers to adoption. These issues are realities for many health care systems today. It is still yet to be seen where health systems’ analytics strategies will be in three-to-five years. Many health systems have capital exhaustion, especially around IT, but are not yet making meaningful investments in analytics. In the coming years the vast majority of health systems will need to respond to industry issues such as value-based care, consumerism, and increased regulation. Sailing the ship blindly will not be an option.
- The virtuous cycle of performance management refers to the framework of Evaluating, improving, and monitoring and sustaining operating performance across the many facets of the health system operating model. Focus on Breakthrough Opportunities Broad reporting on Metrics that Matter – key performance indicators, benchmarks, and models to detect undesirable variation and waste -> opportunities for improvement Rapid Cycle Performance Improvement Model and simulate desired change to optimize operations; support implementation of strategic and operational imperatives with more agility by leveraging business intelligence to course correct as needed Deliver Actionable Insights to Performance Stakeholders Deliver actionable insights via dashboards, reports, KPIs, and alerts to accountable performance stakeholders
- Through modernizing performance infrastructure, we want to enable the four pillars of enterprise performance management – or EPM. We ultimately want to enable the performance professionals across clinical care, functional departments, revenue, supplies, costs, human resources, etc. - both the performance improvement professionals, whether they are your LEAN and Six Sigma professionals and/or your performance consultants. And then ultimately enabling the accountable operations leaders so they can be active participants in transforming operations in partnership with the performance professionals. Methodology – we are agnostic to the various techniques and approaches, but all performance programs need to do three things – evaluate, improve, and monitor and sustain. The techniques and disciplines include benchmarking, root cause analysis, opportunity identification, supporting intervention design such as workforce optimization, process reengineering - Simplify, Reengineer, Change, Train, Transform, to name several. Lastly, monitoring and sustaining such as benefits realization Tracking and KPIs to ensure performance interventions are working as intended, or course corrections are indicated. Content refers to all the data and performance insights that feed into the methodology. Capture, integrate and manage performance data. Once capture, turning it into insights such as performance measure calculation and KPIs, managing our targets both external benchmarks and internal stretch goal targets, and models – broadly speaking optimization models, predictive models, descriptive models that are applied in the steps of performance methodologies – for example, DMAIC models that would be applied using Six Sigma techniques. Lastly, Delivery. Methodology and performance content needs to all be packaged and delivered into the hands of the Skilled Professionals so they can take action. Which closes the circle – enabling the professionals – both PI and accountable operations leaders to be more efficient and effective in transforming the operating model of the health system.
- This concept of the end goal to be enabling the professionals to be more efficient and effective is an important one. By modernizing the pillars of EPM – methodology, content, and delivery – a modern performance management infrastructure allows our professionals to shift the value curve of their activities. Pivoting from the status quo of roughly 70% of effort being consumed by hunting down performance data, capturing it, keying it into excel, manipulating and preparing it for performance insights is not sustainable…without hiring hundreds more professionals to do this non-value added work. With EPM we shift the curve, allow them to now expend 70% of their time doing the hard stuff – taking action, process reengineering, change management, working with operations and clinical leadership to transform the operating model. Because that is the core hypothesis – presented with the need to support an exponentially growing portfolio of performance initiatives – a health system can either hire an army of professionals to do the work on top of inefficient performance infrastructure, or they can invest in modernizing the performance infrastructure so the existing cadre of processionals can do more, faster, with scale and a lower total cost of ownership.
- Beyond Excel and PowerPoint, health systems generally lack the necessary infrastructure required to manage their complex performance management programs with efficiency and effectiveness. Having worked with scores of health systems across the country we observe a general state of immaturity currently. ….highlight each pillar and observations on the state of maturity. Lack of benefits realization tracking Untethered from strategy execution
- Take a pulse check of what the participants believe collectively their maturity levels are. Hopefully validate the prior observations.
- Some practical manifestations of what a next-generation performance infrastructure should support, enable and deliver Benchmarking architecture so we can hone in on where the biggest opportunities for improvement are. Once opportunities are identified, doing the deep dives to understand where the contributing waste is, where is the unwanted variation. This is an example of the opportunity found in the perioperative department as an example across OR and PACU. Adopting a systematic, real-time approach to evaluating your organization’s performance and an agile method for responding to information and driving change will be a necessity for providers in the future. Gone are the days of slowly gathering insights to form decisions for initiatives which may or may not move forward. More and more providers are using real-time business intelligence to nimbly drive disruptive strategic and operational decisions. They are reviewing timely information to benchmark their performance and pursuing opportunities more quickly and with the ability to immediately monitor the impact of these changes.
- Continuing the guided path to performance management, we now need to understand the root cause of the variation and waste. What are the operating levels of many different processes that are off. A modern EPM platform needs to package up all the performance insights, KPIs, process measures, outcome measures so the professionals can zero on exactly where change needs to occur and understand the drivers of unwanted variance leading to lower performance across costs, utilization, efficiency and productivity.
- Once the exact levers to be pulled are understood, with the help of our performance management platform, time to design the intervention. How will we transform operations to deliver the performance benefits. So understanding process best practices, being able to depict those processes, attach process measures, cost, resource, and time cycle to each step in the process. Run scenarios of redesigns – what are the net effect on throughput, capacity utilization, cost, revenue. Doing all of this using modern capabilities at our disposal – not pen and paper and whiteboards. Lastly, once our redesigns, our interventions are being implemented we need to be able to monitor and sustain them. Are the initiatives delivering the designed benefits (less cost, more revenue, efficiency, throughput, etc.). Given the current cadence will we realize the benefits in time. Being able to look at the KPIs by initiative and ultimately knowing who is accountable and being able to ask them why and what are they going to do when benefits are not being realized – is a course correction required.
- Realizing a next-generation performance management platform is of course reliant on other “Enterprise” ecosystem initiatives. Enterprise Applications We need process data – this comes from the standardized operations automation to support Patient, Product, Provider, and Service operating model. Data about patients, costs, operations, and outcomes, and processes. Enterprise Data Governance Data and information needs to be governed as an shared enterprise asset. Data Management for the development and execution of architectures, policies, practices, and procedures that properly manage the collection, quality, standardization, integration, and aggregation of performance data assets across the enterprise Enterprise Data Management Performance data and content needs to be captured, integrated and managed – such as the several flavors of enterprise data warehouses. Enterprise Performance Management And on top of this interrelated foundation – the four pillars of EPM can be delivered.
- So how to take the Journey. (This could be where we replace the bullets to highlight more tangible “get started” activities that we would recommend to a health system depending on where they are today. Bringing it back to the Five, coach it in a sustainable margin, periop department, or customer engagement, VBC, etc. specific journey across the performance maturity continuum. These are pretty generic now.)
- Thank you