It’s good to be joining you again and discussing
a topic that I have a lot of interest in which is the importance of accurate financial data. Kind of a numbers guy by background. I’ve been primarily in accounting and finance
for the past 30 years of my career, with an undergraduate degree in accounting from Brigham
Young University and an MBA with an emphasis in healthcare administration, and so I really
love numbers and love talking about it as well. So as we go through this webinar, I’ve got
four learning objectives that I want to cover. First, why now is the time to embrace new
payment methodologies as a result of changing environments. Then I’d like to cover the critical role of
accurate financial data in value transformation and how this needs to be utilized in conjunction
with clinical data. Then I’ll follow that by organizational and
operational strategies, coupled with accurate financial data for successful transformation
that I utilized while I was at Intermountain Healthcare, and then ending with an overview
of the effective and actionable tools Health Catalyst has to support an innovative data-driven
financial process, which is integrated with other data elements. Last year the advisory board conducted a survey
identifying CEO’s top concerns and the key forces in healthcare impacting those concerns,
and it’s interesting to know as you look at these top concerns that three of the top five
were financially related, and looking at the last two in terms of boosting outpatient market
share and meeting rising consumer demands also have financial implications. As part of that same survey, key forces were
identified, and you can see a number of those ranging from consumerism to competition, collaboration,
technology, volume to value payments and reducing total cost of care. Primarily today in this webinar I’d like to
focus on three of those. First on the volume to value payment, secondly
on consumerism and then third in reducing the total cost of care. On volume to value, on this shift many providers
are reaping the rewards of a fee-for-service system and in doing so they’re focusing on
volume and procedure growth, and benefiting from this incentive as long as possible, and
this may be happening in your own organizations. The shift from volume to value varies across
the country and by institution, but overall it’s estimated at about 15% nationwide on
average. I think there are certainly those that feel
that this hasn’t transitioned as quickly as thought, but the transition is definitely
happening and we all need to be prepared as this is such a dramatic shift in approach
to appropriately manage that shift. Again, some of your organizations may still
be primarily paid based on a fee-for-service payment methodology. However those of you who are prepared maybe
left behind once this tipping point of around 26% of total payments are based on value as
compared to fee-for-service, and that kind of reminds me of the saying what works today
may not work tomorrow. So Sarah, that brings us to our first poll
question in this webinar. Okay, I’ll go ahead and launch that for us. So in this first poll question Steve would
like to know what percentage of your payments are tied to value or risk? And your options are number one, zero to 10%,
option two is 11 to 20%, option three is 21% or more, and option four is not applicable
or maybe you just don’t know. So I’ll give you a few moments to submit your
responses there. People are being pretty quick about this one. Thank you for that, and as a reminder to our
audience, we are recording today’s session. You will have access to that recording as
well as the slides. Okay, I think we’re going to go ahead and
close that poll and share the results. So it looks like 24% were in that zero to
10% bracket. So that’s our majority of people who feel
like they knew. 10% reported they were in the 11 to 20% bracket. 14% reported 21% or more, but 52% not sure. Okay. Is that kind of what you would’ve thought. Yeah, not too surprising, although I thought
I might bias the results when I mentioned that it’s 15% nationwide and that seems to
be the lowest category, but not too surprising and I think even those that might be in finance
may not even know that answer as well at times. So now too surprising and we’ll talk a little
bit more about the methods on moving that spectrum up a bit. So thank you, Sarah. If you don’t know that number, I think also
check with your finance department. If anything, that just shows them that you’re
engaged and they’ll be impressed with you inquiring about that. Steve, it looks like the poll question is
stuck on the screen, so I’m going to switch to my computer and then maybe back to yours,
but you can just keep talking. Okay. I’ll just do this in the background. All right. So CMS is leading the charge in moving from
volume to value, and since 2013 Medicare dollars at risk have been increasing steadily in the
areas of hospital acquired conditions, readmissions, value based purchasing, and meaningful use. Some may argue that the benefits aren’t being
realized to the level anticipated, but I’d really argue that many organizations aren’t
prepared with the necessary strategies and tools to be successful with this value proposition. Your chart is getting cut off here in mine. I don’t know what’s going on with that. All right. Let’s see if we can advance and go back. Perhaps that’ll help. Yeah, I don’t know it’s …
All right, well, you’ll have- Sorry about that. You’ll all have these slides at the end of
the presentation that we can go through. So many argue that those benefits aren’t being
realized, and as I mentioned I think it’s really a situation of many organizations not
prepared with the necessary strategies and tools to be successful. This is shifting over to some commercial payers. In my time at Intermountain Healthcare, the
hospitals took on full risk for our internal health plan with Medicare advantage, Medicaid,
and our large employer products, and this brought us certainly towards the tipping point
of what I spoke of earlier, and other integrative systems are also moving that direction to
help accelerate the move to value. This helps alleviate the competing incentives
associated with living in both worlds of fee-for-service and value at the same time. Next slide, okay. And the change from volume to value, that
certainly creates and shift in incentive. We’ve historically been paid on a fee, based
on a fee-for-service world with the major financial incentive being higher volumes,
but in contrast with value-based care the incentive shifts to keeping people healthy
and maintaining utilization at appropriately low levels. This incentive shift along with a shift in
volumes from inpatient to outpatient care has created excess in patient capacity and
the need to reevaluate space planning. I was often asked while I was a CFO how business
at the hospital was going, and I always felt a little uncomfortable saying that our inpatient
beds were near capacity and outpatient volumes were strong, especially since we were the
only acute care facility in the area. Really it just meant that the community was
sicker and needed more care. It certainly feels more comfortable and natural
to be incentivized in keeping the community healthy and receiving the appropriate minimally
necessary care. Living in both a fee-for-service and a value
world creates the challenge of payment models being at odds with each other. Although this is challenging, it is possible
to thrive if your organization has the right tools and data, which I’ll be covering later
in this webinar. Now, I’ve got two numbers up here on the screen. $1 trillion and $3 trillion and I would suspect
that there are some of you who may know what these numbers represent. One trillion represents the dollar amount
of waste in healthcare. These are costs that provide no benefit in
health improvement. JAMA recently calculated a similar number
ranging slightly below that one trillion number, but however you look at it, this is a significant
amount of waste. These are dollars expended on care that had
zero benefit or value. In some cases these expenses caused harm to
patients. The $3 million represents the overall total
cost of care. So that certainly represents a large component
of the overall costs. To bring this closer to home, so to speak,
forget about healthcare for a moment and think about your own personal expenses. What would you be able to accomplish in your
own personal situation if you were able to have an extra 33% available to spend or save? And by the way, this is much better than a
33% salary raise, as you wouldn’t net that much in your take home pay if you had a raise. These are dollars that would go directly to
your bottom line. For many of you that would represent a home
mortgage or a lease payment, so certainly quite significant, but back to healthcare
the dollars associated with waste are also significant. I’m generally an optimist so I see this as
an opportunity for improvement to capture significant savings and have experienced that
as I’ve gone through my career. Waste is found in three major categories,
as identified by Dr. Brent James. He’s one that you’ll be able to listen to
in I believe next week’s webinar. Yeah. And these three areas are efficiency within
case variation and case rate utilization. Dr. James along with Greg Poulsen, both from
Intermountain Healthcare, previously identified the greatest amount of waste in case rate
utilization, which represents about 45% of overall waste followed by within case variation
and efficiency. Within case variation represents the number
and types of units per case providing healthcare and then the third category being efficiency
represents the cost per unit of care. Knowing how eliminating waste is financially
incentivized is certainly important. In a fee-for-service environment, only an
improvement in efficiency is financially beneficial to the providers as can be seen by the red
and the green arrows. At the other end of the payment spectrum a
capitated environment where the provider is fully at risk. Any waste elimination category directly benefits
the provider. In a fee-for-service environment the insurance
provider is actually the one that would benefit from waste elimination generated outside of
efficiency and that was one of the reasons why at Intermountain we tried to shift that
risk to the hospital so that we as the provider could benefit from that reduction in waste. The provider risk model certainly aligns financial
incentives in reducing that waste. Next area I want to cover is consumer at risk,
and this is certainly another key reason to consider in embracing the value proposition. Consumers of healthcare are now participating
more directly in the cost of care they receive, much more than they have historically. I know many organizations have offered the
high deductible health plans, and some still offer both but certainly many more are moving
towards these high deductible health plans, and with healthcare costs inflating at greater
rates than other areas of consumer spending, consumers have increased the percentage of
disposable income spent on healthcare by almost 25% from 2007 to 2014 at the time this was
reported in The Wall Street Journal. So you can see personal healthcare spending
is competing directly with other categories that individuals have to work with in terms
of food, housing, clothing, transportation, and so forth. Clearly this is not sustainable in the long
run, and at the same time the average family deductible is increased by 85% by over $3,000
in 2016 with about 44% of consumers participating in high deductible health plans and that continues
to grow. So with consumers directly paying for a larger
share of their healthcare as I mentioned before, this is not sustainable. While I was at Intermountain I certainly saw
an increase in bad debt and surety as a result of this change, and really bad debt and surety
aren’t just attributed anymore to those without insurance as deductibles increase more, the
financial burden is placed on the patient who may not have enough funds in their health
savings account to cover their deductible. So what is it that consumers want? With this shift in patient participation,
consumers are demanding more information and are looking for it on the Internet and social
media. Like other services and costs, consumers have,
they are looking for cost estimates and other related information before they receive services. Many healthcare organizations are not prepared
to share accurate estimates for treating ahead of time, and many really aren’t set up to
offer online payment management or provide ease of talking with financial counselors
to help manage costs, and these are all areas that consumers are looking for. So as a result almost a third of consumers
are dissatisfied with hospital transparency. This really requires a shift in mindset to
be successful with this changing payer environment. Where increased volumes and a focus on revenue
has worked in the past, the shift is now focused on providing appropriate and efficient care
with an emphasis on reducing waste. So unless you’re quite young you should remember
these two historically very large and successful companies, Blockbuster and Kodak. History gives us an example of companies that
failed to develop strategies to adapt to a changing environment. Kodak ironically was one of the first to introduce
digital cameras in 1975, but they felt this would compete directly and detract with their
film products, and as the digital age took route, Kodak was late to make a successful
entrance and filed for bankruptcy protection in 2012. Similarly Blockbuster, they were very successful
in renting VHS and Beta format movies beginning in 1985. They did move to DVDs and then tried to compete
with Netflix, but obviously Netflix won that battle. So certainly don’t be that Blockbuster or
Kodak that failed to adapt to a changing environment. I think in both of these situations it was
a slow moving transition and we’re seeing that as well, but certainly need to be prepared
to adapt to that changing environment. So moving to the next section on critical
need for accurate financial data. Once we’ve embraced these new payment methodologies,
it really is critical that we have accurate financial data and there are certainly some
issues and reasons why we need to have that accurate financial data. We have a shifting pair mix. Many healthcare organizations are seeing declining
volumes with the increased cost that we talked about earlier, shrinking payments, changing
consumer demands that we touched on and new competition. According to HFMA, not for profit hospitals,
their operating margins are on an all-time average low of 1.6% and approximately 30%
of those hospitals are operating at a loss. There’s a number of factors that are contributing
to that situation, but really the short answer is payments are shrinking while costs are
escalating, and that shifting payer mix and other reasons I identified earlier are also
contributing to that situation as well. Knowing profitability is key, and margins
as I’m sure most of you know are the difference between net revenue or the payments collected
less all the expenses associated with generating that revenue. It’s so important that organizations understand
the various components that drive these margins. Margin components need to be known not only
at a system level or an overall hospital level, but down to a department level, to a DRG level,
and even a case or procedure level to really have the necessary information that’s needed
to make decisions. This accurate financial data is needed as
the basis for strategies and tools that I’ll be talking a little bit later in the webinar
about. I think it doesn’t take too long to figure
out if you don’t have accurate financial data when you’re sharing physicians’ personal financial
metrics as compared to their peers. Something that I personally have found out,
I had two analysts working for me whose sole responsibility was to work with physicians
and share comparative financial quality and clinical data and it was a process that helped
improve the accurate of our financial data at the time. These analysts had to explain and defend the
information they were sharing. It did take quite some time to develop trust
with these physicians and when having their cost information explained to them was a challenge
at first, and I think the first reaction that these physicians often had was they didn’t
believe the data. We often looked at a physician’s cost per
case compared to their peers and what we did learn was that the cost in data needs to be
easily explained to physicians or they disengage. It’s always difficult to explain to physicians
that their expenses are calculated on relative value units. We’ll talk a little bit about that if you
don’t know what those are, or based on a ratio compared to their charges. It’s hard for them to relate to what that
means. It’s certainly more accurate and easier to
explain their costs based on the actual activities that make up those costs and we’ll talk a
little bit more about that also later in the webinar. So Sarah, that brings us to our second poll
question. All right. Let’s go ahead and launch this here. So in Steve’s second poll question today he’d
like to know how comfortable are you with the accuracy of your financial data. And your options are number one, very comfortable,
number two, somewhat comfortable, number three, somewhat uncomfortable, number four, very
uncomfortable, and number five, not applicable or you just don’t have an opinion on this
one. We’ll give you just a few moments to submit
your responses. Again, we have a pretty quick responding audience
today. Great. People are on the ball today. Again, if you joined late, we are recording
today’s session. You will have access to the slides, so just
be aware of that. All right, I’m going to go ahead and close
that poll and share the results. Okay, so we had 15% reported they were very
comfortable. 25% were somewhat comfortable. 22% somewhat uncomfortable. Only 7% very uncomfortable, and 30% are still
kind of unsure. So what, we have 40% who are saying that they’re
decently comfortable but then a chunk that are a little worried it seems. Great. I would’ve expected the majority to have been
somewhat comfortable, which we are, and I’d encourage you those of you that don’t, aren’t
as familiar or have no opinion on that to work with your CFO or your accounting or finance
departments to get more comfortable with that information and what’s available out there. I’m an accountant and I get excited when people
will show an interest in what I do, so I’m sure that would go a long ways in your organization
as well. So back to talking about accurate financial
data, there are certainly different levers that individuals have to pull, and with these
shrinking margins, these levers around charges, around net revenue or what’s actually paid
in expenses are different categories that we have at our disposal. These are all affected by adjusting rates,
by adjusting volumes, or a mix of expenses in gross revenue, and certainly it’s harder
to pull some of these levers than others, certainly difficult to change volumes or the
mix of patients as compared to adjusting rates, but at the heart of all of this is really
having the accurate financial data to be able to see what those impacts or how those leverage
are being impacted. In looking at different waste categories and
also looking at the financial leverage from waste elimination, we can see that most often
hospitals focus on top line revenue, which can occur be developing tactics to increase
market share or acquisitions. As volume increases, expenses to provide those
services also increase, goes back to kind of the example I proposed to you on getting
a 33% bonus in terms of expenses as you get paid for those things, there’s associated
expenses with that. If you can eliminate expenses, those go through
to the bottom line. So there’s a much greater impact from waste
elimination, which can provide as much as a 50 to a 100% contribution per dollar saved. So with there being about a third of waste
and healthcare costs, there certainly is a lot of savings potential and opportunities
to be realized. So on this next slide, I know there’s a lot
to look at here, but really the main point that I want to get across is that in the current
state you can see that many individuals are receiving care that potentially should not
be, and in terms of what care should be included in the current state, oftentimes there are
more procedures, or labs, or drugs that are administered and are really necessary, and
also in an inefficient manner. Certainly in an ideal state we want to make
sure that those individuals that are needing the care are receiving the care and those
that don’t need to have the care or not that we are also providing the right amount of
labs and drug work and such in an efficient manner. So certainly as we eliminate that, that waste
puts us more towards that ideal state. Revisiting again the slide that we looked
at before is the case rate utilization within case variation and the efficiency and how
that payment method is impacted based on eliminating that waste. As we move more to boards the fully at risk
or the provider at risk model, all of those efforts that we make on reducing that waste
benefit the provider at risk. If we are on the other end of the spectrum,
on the fee for service side of things, any reduction in waste, although good isn’t going
to benefit the provider but will benefit the insurer there as well. It’s again, very important to have accurate
financial data as we look for those hidden opportunities that may exist in these waste
categories and certainly inaccurate financial data will often lead down rabbit holes were
opportunity for waste elimination really may not exist. So again, very critical that the financial
information be accurate. In this next slide, after addressing some
of the low hanging fruit with efficiency opportunities within case variation helps uncover more significant
opportunities, and I mentioned previously that I had two variation analysts that helped
identify variation and physician expenses and practice patterns, and they would identify
differences in different physician areas such as OR minutes, implant cost, physician preference
cards and many others. In this graphic that I’m going to show you,
represents that type of variation that we would see. So this dot here represents Dr. J. He has
15 cases, or she, $60,000 average cost per case, and the mean cost per case with all
his peers including himself is $20,000. So certainly Dr. J is an outlier. That difference of $40,000 times his 15 cases
represents a $600,000 opportunity, and as I had my physician variation analyst work
with these physicians, this was the type of information that was presented, and once we
gained the trust with these physicians and worked with them, and identified that their
outcomes weren’t necessarily any different than others, and drilling down on what the
opportunities are, we began to realize this. So although this is a fictitious example,
these are certainly the types of results that we saw when looking at this. So the total opportunity there with Dr. J,
600,000, but there’s other physicians that are also outliers and as those physicians
are brought towards the mean cost per case of $20,000, that total opportunity significantly
increases as well. Sorry Steven, I’m going to have to play catch
up now. We’re getting a few reports there’s some static
on the line. So catching up to your slides here and then
we’re just going to switch the audio to my computer, so you’ll just talk here instead
of through that mic. Okay. But I’m caught up here so let me just hurry
and switch our audio source. Thanks everyone for bearing with us for just
a second. Okay, so we’re back in business. Can you hear us okay here? Yeah. Okay, we’re getting positive feedback here. Great. So I’m just going to angle this toward you
Steve and you’ll just keep going. Good. All right, hopefully you can all hear me fine
now. So looking at different variation principles,
as my analyst and I shared these differences with physicians we of course needed to adjust
for severity of illness. Oftentimes physicians would say, “Yeah, well,
the reason why my costs are higher is because my patients are sicker.” So it would naturally be expected that if
a physician is treating sicker patients the cost would be higher, and it’s important to
have an apples to apples comparison, and this goes hand in hand with the trust issue that
I shared earlier. And the two primary causes of variation are
clinical variation and data variation, and I’d like to focus on the differences in the
way care is delivered, while at the same time uncovering and addressing the way data is
captured and documented. So as that variation is reduced, we’re seeing
benefits in both the clinical variation as well as the data variation. So for the complete data concept, an organization
needs to have clinical quality and financial data tied to each other, and that’s not really
only for your own entity, but for all providers in the continuum of care, and this concept
needs to extend outside hospital walls. A healthcare organization uses multiple systems
to achieve operating business goals in utilizing their EHR, their supply chain, their financial
reporting systems, benchmarking, payroll, HR data, many different types of data just
to name a few that all are very important to be integrated with the financial data to
give us that complete data concept that an organization needs to achieve that transformation. So many different metrics and data sources
are needed and certainly important to look at those collectively. So moving to the next section on organizational
and operational strategies for transformation, while I was at Intermountain we were very
fortunate, as I mentioned before, to have Dr. Brent James in our organization. Our region made it mandatory that all manager
level individuals and above be trained in Dr. James quality and process improvement
methodologies, and he would come down to our region once a year to train those individuals. Not only did we train our own hospital staff
but also our medical directors, many other physicians and our board members. We then began the process of reducing waste
through what we termed at the time as QUE two studies, and this was the second iteration
or revival of the original QUE studies, which stands for Quality, Utilization, and Efficiency
that Dr. James and others instituted at Intermountain several decades ago. At the time we didn’t really have all the
sophisticated tools in place that Health Catalyst has developed and implemented, but we did
have the processes and some of the simple tools to start this transformation. In the following slides I’ve highlighted some
of those strategies and learnings that occurred. First starting off with data strategies. We found that you need to know where variation
exists and where those opportunities are. While at Intermountain we developed internally
in my region a tool called the QUEST tool, kind of a spin on the QUE studies, which stood
for Quality, Utilization, and Efficiency Selection Tool, and really all this did was calculated
the potential opportunities by DRG based on direct variable costs and standard deviations
from the mean. So that pointed us in a certain direction
of being, of knowing where we needed to focus. The second data strategy that we realized
was quality and cost are generally tied to each other. As quality increased we usually saw costs
decrease, and we also learned that these data now extend outside of the hospital walls. Where a patient is discharged whether that
be home, to a SNF, or they stay longer in the facility. It all has different ramifications and understanding
that data is key in being able to work efficiently and eliminate waste. We also learned that leading indicators need
to be looked at on a regular basis. Having lagging indicators or utilizing post
monthly reports are often too late. So the more that we can look at those indicators
on a regular basis, the more successful we were. We also learned that healthcare organizations
working on process improvement initiatives need to regularly review that data on a consistent
basis. We held monthly review meetings while I was
at Intermountain with multidisciplinary teams that were working on these process improvement
efforts to reduce variation. Not only did we look at cost but we also looked
at length of stay, readmission rates, return to surgery, mortality, infection rates, many
other metrics that we looked at as well, and as that variation was reduced and best practices
were implemented, we experienced significant positive results. We then continued to periodically review that
data and sustain those gains. As far as organizational strategies are concerned
I think one important thing is the CFO needs to partner with clinicians and other providers. These relationships help to build the trust
and synergy needed for that change, and in order to be able to partner, there needs to
be a strategic direction or a focus, and that direction is provided by senior leadership
and based on the strategy that’s developed. Once that strategy is developed, goals and
incentives need to be aligned at all levels of the organization. All team members need to be focused on the
same things, and that’s when we saw the greatest results while we were going through this transformation
process, was having everyone focus on the same thing where appropriate. The C-suite really does need to be aligned
and no longer siloed. Transformation is really a team effort and
as the C-suit works in coordination with each other is when you do begin to see those significant
results, and a governance structure helps with that in addition to data governance to
provide that focus and direction from senior leadership, and as those processes are put
into place, you will be able to proactively address issues rather than being in a reactive
mode in an operational situation. So that moves us to our third poll question. Right. Let’s go ahead and launch this poll question. In this question we would like to know has
your organization engaged in any at-risk models with commercial payers? And your options are number one, yes, number
two, no, or number three, not applicable or you’re not sure. Again, we’ll give you just a few moments there. This is also a great time if you get your
poll response submitted, if you have any questions that are top of mind, you know we are in the
latter part of the presentation, go ahead and submit those questions and we’ll make
sure that Steve gets to those in the Q&A time. Okay, I think we’re going to go ahead and
close that poll and share the results. It looks like 29% reported a yes. 21% reported no, and 50% still not totally
sure, which kind of lands us what we saw in the other questions, right? Right, exactly. Yeah, not too surprising. Some payers have been slow to move towards
at-risk models, but this does appear to be gaining some momentum and I think that suggests
that, certainly in some geographical areas more than others. So that moves us to some of the financial
strategies that I learned. First of all, an adequate tool belt is needed. That helps identify opportunities as well
as the ability to drill down. I think that’s really key to be able to drill
down in what’s causing the nature of that variation. As I mentioned previously, knowing profitability
at a system level alone isn’t adequate. Profitability is needed to be known at all
levels of the organization to be able to make those strategic decisions, and the CFO needs
to be a strategic thinker in utilizing this financial data coupled with quality and other
metrics. Focusing on financial ratios and traditional
financial thinking is really not sufficient in the long run. To aid with the strategy is deeply understanding
profitability tied to these value and quality indicators for all segments of healthcare
delivery down to the provider and to the patient level. Lastly accurate costing data is the heart
of the financial data for variation discovery. So having these operational, organizational,
and financial strategies in mind will then put you in the best position to begin your
transformation journey. Once your process improvement project is identified
and supported by senior leadership, the following framework helps guide you through seven essential
questions you need to answer to realize these improvement results. You’ll have this information later. I don’t plan on going through all of this,
but it really is a good process to follow and it isn’t always a sequential process. You may need to go back and revisit previous
questions before moving forward. So in our last section is on some of the Health
Catalyst tools that have been developed and differentiate and support transformation. Some of you may not be familiar with Health
Catalyst. For those of you who are not, we enable a
data driven-journey to massive improvement. So certainly enabling the things that I talked
about previously. We measure our success through this transformation
in terms of patient lives saved or improved as well as millions of dollars saved through
waste reduction and elimination. This is all based on best practice or what
we should be doing on adoption, or how we do things in analytics, or how we are doing. All three of these key components are put
together and implemented, and when that happens is when massive outcomes and improvement is
realized. So we’ve got our fourth and final poll question. All right. Go ahead and launch this one. So in this question we have this statement
for you and we want to know how well you agree with this, and the statement is, my organization
has the necessary tools to improve quality and efficiency. And your options are number one, strongly
agree, number two, somewhat agree, number three, somewhat disagree, number four, strongly
disagree, and lastly again are not applicable or no opinion. So we’ll give you just a few more moments
there to get your responses in on this last poll. All right. Looks like things are slowing down. I’m going to go ahead and close that poll
and share our results. All right, 15% reported that they strongly
agree. 38% somewhat agree, so that’s our majority
here. 19% somewhat disagree. 17% strongly disagree, and only 13% now have
no opinion. Great. I guess this one was a little easier to answer. It’s just an opinion question. It was, it was. Well, that’s encouraging to see that over
half either strongly agree or somewhat agree. So I’m hoping that those tools are being utilized
to help improve that quality and efficiency. So our tools are built on what we call DOS,
or Data Operating Systems that links together all of your sources of data information, including
tying clinical data from your EMR with other sources of data as I mentioned previously,
which also includes our costing and financial data and how important that is to be able
to link those all together. These are some of the applications that Health
Catalyst has, including those specific to financial data, and we’ll look at a couple
of these more closely, but besides financial tools we have a number of other applications
around operational, clinical and population health areas. With this topic being on accurate financial
data of course costing is an integral piece to that, and at the heart of this financial
information is this costing data, and Health Catalyst has developed a tool called CORUS
that accurately calculates cost based on activities rather than on other costing tools that base
cost off of work RVUs or relative value units, or based on a percentage of charge code charges. Patients that have the same charges will show
the same cost when based on relative value units, as you can see on the left hand side,
and there’s often some hidden potential there in terms of what’s actually going on if costs
are being done based on activity. So you can see that there can be some differences
in the amount of time expended, the volume of different procedures in place for those
cases, and cost of supplies and drugs associated with that. If the costing is based on relative value
units, that may be hidden. So certainly basing on activities, as I mentioned
earlier, is easier to explain to physicians and becomes more accurate in terms of being
able to also look for variation opportunities. This second slide just breaks that down a
little bit further from a time perspective in the associated labor costs, and even though
the charges are the same, that time can be different among patients, and you can see
the various components of that time, and the true variation in cost becomes hidden when
based on RVUs rather than activities, and opportunities can be missed and potentially
wrong decisions made if that’s not known. Here’s another example of a report combining
clinical and financial data. This is on a hysterectomies and you can see
that on an overall basis the hysterectomies are contributing positively by $800, but as
you drill down you can see that depending on how those hysterectomies are done or perform
has some significant differences in terms of not only cost but in contribution margin
and in outcome. So again, just a simple example of how combining
that profitability and accurate financial data along with clinical data is so important. This is an example of our financial management
explorer. This tool combines cost and billing data for
analysis among other things, and these types of reports can illustrate trending and allow
for drill down and customization. We also have a team of experts in the revenue
cycle area that can help assist with providing an overall assessment opportunity and implementation
in addition to our self-analysis tools like Revenue Cycle Explorer. Here you can see that this is just one example
of the type of information available in our Revenue Cycle Explorer, includes information
around error management, error account details, collection rates, denials, and many others. All of these types of financial tools help
to rapidly identify and understand important trends and variances so that appropriate action
can be taken. In my last couple of slides just highlighting
some of the transformation benefits and improvements that have been seen and realized. This is Children’s Health Network. It has some significant improvement that occurred
in utilizing these process improvement efforts. On a clinical and financial basis they had
$23.2 million in improvement. Over $6 million in drug cost savings and approximately
$8 million in sepsis cost savings among others. They were also able to eliminate some overutilization
of testing as well as a six day reduction in their NICU length of stay. So some pretty significant improvements that
they were able to realize. Lastly another client, Allina Health was able
to realize a $2 million increase in overall patient collections and this was done in the
first year through developing and implementing predictive modeling and prioritization of
workflow efforts and other strategies. So certainly a lot of opportunity exists and
it’s important to have that accurate financial data to be able to make key decisions, regardless
of whether you’re in a fee-for-service or a risk based model. As we’re getting, as we’re able to better
understand our financial situation down to a procedure level, strategies can then be
developed that puts that strategic direction in place, and significant variational waste
exists in all healthcare organizations, and having the right tools and resources to help
identify that waste can enable massive transformation. There’s significant opportunities out there
with accurate financial data at the heart of finding those opportunities. I just want to thank you for your participation
and interest in this topic and I know we have a few minutes to answer some questions that
any of you might have. All right, great. We actually have one final poll question before
we dive into the Q&A. Okay. But this is our poll question, this is not
Steve’s. So I’m going to go ahead and launch that. While today’s webinar was focused on the importance
of accurate financial data, some of you may want to learn more about the work that Health
Catalyst is doing in this space or maybe you’d like to learn about our other products and
professional services. If you would like to learn more, please answer
this poll question. Now, I’m going to go ahead and leave that
up as we dive into our questions here, and we have a few so far. If you’re still on the line and you have a
question that you’ve been thinking of and you haven’t yet submitted, now is your time. So first we had, this was a comment that came
in towards the beginning after your second poll question about feeling comfortable with
financial data, and Mary Anne said, “Just a comment about being comfortable with financial
data. When I asked our organization for financial
data about my clinic I was told why do I want to know as you’re just a clinician. Is that something you’ve seen in your work?” Yeah, I think oftentimes I have seen that
in terms of why do I want to know, you’re just a clinician, that sometimes happens. That’s unfortunate certainly and I would hope
that that’s not widespread. I certainly, I think as I mentioned before,
when anybody came to me asking for financial data, I was thrilled, I was encouraged that
they were asking. So I hope that’s an isolated case, but that’s
somewhat unusual I guess as I’m thinking about this now. But I certainly again think that’s very unfortunate
because clinical and financial does need to be tied at the hip in being able to address
those issues going forward. Right. Our next question comes from Kimberly who
asks, “As health systems continue to acquire new system members and work to integrate financial
systems and workflow processes, how have you accelerated standardization of clinical quality,
operating, and financial data reporting and synthesis?” Yeah, might be synthesis. Well, I think in how we’ve accelerated that
standardization in Health Catalyst is we do have a number of reports that are standardized. Many of our reporting structure is highly
customizable as well, but we have had a number of clients that have made those modifications,
but I think really the thing that we’ve seen that while I was at Intermountain in terms
of standardizing that was getting that information out in front of individuals in terms of clinical
quality and operating and financial data, and the more that that’s looked at, the more
it’s refined and the more it’s standardized, and just having that data out there really
does help move the wheel in terms of transformation. Okay. Next question is from Kevin and it’s around
that hysterectomy example that you shared and he asked, “How was clinical quality factored
into the results shown there?” There were a few and it was probably hard
to see because there was a lot of data on that slide, and it was fictional data although
very, very, very real, but looking at the infection rates was one, return to surgery. That data was also looked at as well and that
certainly is very important to look at. Financial data alone, you do not want to just
make your decisions based on that. Being an accountant, that may sound contrary
what most people would think, but I have certainly learned that financial data alone is not sufficient. That needs to be tied closely with the clinical
data, what the outcomes are and many times it makes sense to do things that are not necessarily
as financially appealing based on the clinical results. So those two things need to tie hand in hand
certainly. Okay. The next question is from Francisco asking
about an integration with Salesforce. I’m guessing that’s around our tools and financial
data that lives in Salesforce. If I’m wrong there Francisco and you’re still
on the line let us know. But do you know of anything there? I don’t know what the nature of that is exactly,
so I’d certainly be happy to follow up with Francisco on that offline if needed. Great. Yeah, Francisco, please do let us know if
we’re off-base there and we’ll point in the right direction. We do have time for just a few more questions. If there are still any lingering questions
out there, now is your final chance to get those in today, but in the meantime I’ll ask
Steve, what processes can you put in place to help achieve accurate financial data? Yeah, I think as I mentioned before, to getting
the information out there and to getting into the hands of individuals is certainly a way
to accelerate that. Sharing that information with physicians and
other clinicians really helps discover issues that might exist with the financial data,
but I think one of the key things is to really get the information into the hands of clinicians. Again, going back to that situation of not
wanting to share that financial information just kind of gets to me, certainly, but it’s
unfortunate that that’s not the norm out there, but the more the information is there, the
more the data is looked at, the quicker that that will improve. All right. We’re going to do one more question. Okay. And then wrap up, and the question is, what’s
the best way to integrate clinical and financial individuals in using financial data for transformation? I think the one thing that was very helpful
while I was a CFO was to have a CEO that was a 100% behind this transformation and getting
that alignment and that focus at the top was certainly helpful. Kind of goes back to kind of having that C-suite
alignment and having our goals all aligned together is certainly important. So I think as we get that synergy, the benefits
will be there. All right. Well, we don’t have any more questions right
now so I think we’re going to go ahead and wrap things up.