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Cost Repositioning – an  Institutional  C ase  S tudy Kandice Cost Repositioning – an  Institutional  C ase  S tudy Kandice

Cost Repositioning – an Institutional C ase S tudy Kandice - PowerPoint Presentation

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Cost Repositioning – an Institutional C ase S tudy Kandice - PPT Presentation

Cost Repositioning an Institutional C ase S tudy Kandice Kottke Marchant MD PhD Chair Robert J Tomsich Pathology amp Laboratory Medicine Institute Cleveland Clinic Cleveland Clinics Cost Repositioning Approach ID: 762941

lab pathology fte cost pathology lab cost fte amp hospital consolidation enterprise cms laboratory 2014 test medicine staff clinical

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Cost Repositioning – an Institutional Case Study Kandice Kottke-Marchant, MD, PhDChair, Robert J. Tomsich Pathology & Laboratory Medicine InstituteCleveland Clinic

Cleveland Clinic’s Cost Repositioning Approach

Cost Repositioning ObjectivesProvide value and ensure affordable care for patients Leading innovation in changing industryTransformational cost structure changesBalancing the shift: volume to value

Cost Repositioning2014 - 2016 Goals* Implemented Savings (in millions) Clinical Programs & Assets Indirect Non-Staff Staff Stewardship Research Education Value Based Care 20% Overlap Total

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

StructureFull 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

WorkstreamsClinicalIndirect Non-StaffStaffStewardshipResearchEducationValue Based Care

Project Pipeline Idea / In-Process Approval Implemented Clinical 35 17 4 Education 4 0 5 Indirect 23 teams* 18 0 Non-Staff 10 5 4 Research 33 1 0 Staff 2 0 2 Stewardship 27 18 8 VBC TBD 0 0 Total 134* 59 22 *Each Indirect team will present numerous ideas As of 4/15/14

Specific Pathology and Laboratory Medicine Drivers for Cost Reduction

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

Additional DriversDevaluationBiopsy codes Cytopathology codes RevaluationIHC codes Other changes Molecular diagnostic billing codes

Robert J. Tomsich Pathology & Laboratory Medicine Institute Approach

RT-PLM Cost Repositioning SummaryReduce cost per test by 30% How? Assess current operationsDevelop enterprise-wide transformational strategies: optimize laboratory resources Implement 2014 12%* 2015 10% 2016 8% *2.6% from 2014 budget + 9.4% new in 2014

Major Projects Department Reorganization Administrative Reorganization Lab consolidation Pathology sub specialty consolidationAllogen: transplant lab reorganizationPreanalytics optimization

Big Picture: How We Are Saving

Department and Administrative Reorganization

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 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

Administrative Restructuring 1 1 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

Lab Consolidation

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

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

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

Lab Test Consolidation Plan

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

Pathology ConsolidationProfessional Subspecialty Service Model Frozen Section CoverageSurgical Pathology & Cytopathology subspecialty plan CredentialingConsolidate Technical Operations Accessioning, specimen tracking, courier deliveries, histology, cytology, billing, etc. Facility & Equipment PrerequisitesMain campus office spaceBiopsy cell Digital scanners and web cams Scheduling system

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 0.66ENT 0.44 Derm 0.30 PUL 0.27 10.20 Cyto 2.15 BM/Lymph 1.25 (EH)

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)

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

Percentage of Savings = 9.4% Total 2014: 9.4% new in 2014 + 2.6% from 2014 budget

ChallengesLong-term, multi-year transformation Change throughout organizationAligning annual planning timeline / processOrganizational engagement Communication to all stakeholdersSetting service level expectations

“….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.”

Questions?