Lessons from Healthcare Transformation
August 5, 2014
The Six Campuses of NYP
Weill Cornell Medical Center
Payne Whitney Westchester
Morgan Stanley
Children’s Hospital
The Allen Hospital
Columbia University
Medical Center
Lower Manhattan Hospital
1
NYP Snapshot - 2013
Centers of Excellence
CHILDREN’S
CARDIAC
DIGESTIVE
NEUROSCIENCES
ONCOLOGY
TRANSPLANT
*2011 Data
2
Affiliation with Two Premier Medical Schools
1771 – New York Hospital
1868 – Presbyterian Hospital
1898 – Cornell University
Medical College
(Now Weill Cornell)
1767 – Columbia University
College of Physicians
& Surgeons
1927 – Affiliation Agreement
1911 – Affiliation Agreement
Both highly ranked by U.S. News
1998: NewYork-Presbyterian Hospital
Over 1,600 residents
120 ACGME-accredited programs
Single-site GME provider
3
NewYork-Presbyterian Healthcare System
Facilities
30
Discharges
500,000+
Physicians
10,000
Care for NY
Metro Area
21% of
Discharges
*Facilities include hospitals, nursing homes, & specialty institutions
**NY Metro Area includes 5 boroughs of NY, Westchester, Rockland, Orange, Nassau;
Fairfield and Litchfield, CT; Bergen and Hudson City, NJ
4
Common Problems: Higher Education & Healthcare
 Cost
 Declining government support
 Public perception / rankings
 Defining and measuring quality
 Regulation
 Business model disruption
5
College Tuition Has Outpaced Medical Inflation
6
And is Projected to Continue to Rise Significantly
7
Healthcare Spending Continues to Rise, and is
Consuming More of the Economy
20%
Actual
Projected
19%
18%
17%
16%
15%
2006
2008
2010
2012
2014
2016
2018
2020
2022
Source: CMS (2012)
8
The US Healthcare System in Context
2012 Nominal GDP
USA
$15.7 Trillion
CHINA
$8.3 Trillion
JAPAN
$6.0 Trillion
GERMANY
$3.4 Trillion
US Healthcare System
$2.9 Trillion
FRANCE
$2.6 Trillion
UK
$2.4 Trillion
BRAZIL
$2.4 Trillion
Source: CIA World Fact Book 2012
9
Common Problems: Higher Education & Healthcare
 Cost
 Declining government support
 Public perception / rankings
 Defining and measuring quality
 Regulation
 Business model disruption
10
Healthcare Spending Has a Large Opportunity Cost
11
Education & Healthcare Consumed Almost 2/3 of
the 2014 NYS Budget
Everything Else
11%
Debt Service
7%
School Aid &
Special-Ed
28%
Fringe Benefits
5%
State Salaries
13%
Higher Education
(inc salaries)
12%
Other Healthcare
6%
Healthcare Medicaid
18%
12
Projected Financial Impact of Reform on NYP
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
$
($50 M)
($100 M)
($150 M)
Expanded Medicaid Coverage
Value-Based Payments
($200 M)
Fiscal Cliff (DCI cut)
Readmissions
($250 M)
2% Reduction in Medicaid Reimbursement Rates
Medicaid Elimination of Trend Factor
Sequestration
($300 M)
Employer Benefit Costs
DSH Reductions
Medicare Market Basket Adjustments
($350 M)
($400 M)
13
Common Problems: Higher Education & Healthcare
 Cost
 Declining government support
 Public perception / rankings
 Defining and measuring quality
 Regulation
 Business model disruption
14
Is a College Education Delivering Value?
15
High Prices, Poor Outcomes
Source: OECD data
16
What Health Care Services Really Make a Difference?
$750 Billion in Waste
Prevention Failures
Inflated
Prices
7%
14%
Excess
Administrative
Costs
Fraud
10%
28%
25%
17%
Inefficient Care
Delivery
Unnecessary
Services
Source: Institute of
Medicine Report 2012
17
Healthcare Perception or Reality
“Well Bob, It looks like a paper cut, but just to be sure
let’s do lots of tests.”
18
Are We Spending Money on the Right Things?
Source: Bipartisan Policy Center,
“F” as in Fat: How Obesity Threatens
America’s Future (TFAH/RWJF, Aug.
2013)
Healthcare Costs Are Concentrated
23 Million Beneficiaries
•Spending $1,130 each
•Total Spending = 5%
($26 B)
16.1 Million Beneficiaries
•Spending $6,150 each
•Total Spending = 20%
($104 B)
7 Million Beneficiaries
•Spending $55,000 each
•Total Spending = 75%
($391 B)
Common Problems: Higher Education & Healthcare
 Cost
 Declining government support
 Public perception / rankings
 Defining and measuring quality
 Regulation
 Business model disruption
21
Defining Quality
22
Proposed Quality Measures for Higher Education
 Student loan repayment and default rates
 Student progression and completion
 Institutional cost per degree
 Employment of graduates
 Student learning
23
Common Problems: Higher Education & Healthcare
 Cost
 Declining government support
 Public perception / rankings
 Defining and measuring quality
 Regulation
 Business model disruption
24
Regulatory Overhead
Higher Education
Healthcare
Reporting: Clery Act, military & veteran
complaints, etc
Reporting: sentinel events, patient
complaints
Accreditation
Accreditation (Joint Commission)
Anti-trust
Anti-trust
Student disclosures
Patient disclosures
Internal audit & compliance
Internal audit & compliance
Higher Education Act (900 pages)
Affordable Care Act (906 pages)
25
Unfunded Mandates in Healthcare
 EMTALA
 HIPAA
 Transition to ICD-10 coding
 MRSA testing for patients
 Quality & readmission penalties
26
Common Problems: Higher Education & Healthcare
 Cost
 Declining government support
 Public perception / rankings
 Defining and measuring quality
 Regulation
 Business model disruption
27
Disruption in Education
28
New Entrants in Healthcare Delivery
29
Consumer Expectations Changing Markets
New Entrants in Healthcare
31
The Traditional Fee-For-Service Model is Changing
Increasing Risk
Fee-forService
P4P /
Penalties
Bundled
Payments
ACOs/
Shared
Savings
Capitation
Insurance
Product
32
Population Health: Developing a Comprehensive Delivery System
Specialists
•Academic
•Community
PCPs
Home
Healthcare
•Academic
•Community
Comprehensive
Delivery
System
Post-Acute
• Rehab
• Long-term
Care
• SNF
Hospitals
Ambulatory
Sites
• Physician Offices
• Diagnostics
• Retail / Urgent
Care Sites
33
The (R)evolution of Personalized Medicine
Past
Present
Future
Human Genome
Project - first human
genome sequenced in
2003
Targeted therapy
around:
• Breast, lung & colon
cancer
• BMT
• Rare diseases
• Warfarin
“Inexpensive”
sequencing means:
• More discovery
• Earlier diagnosis
• More targeted therapy
Genomes done
infrequently
$2.7 billion
$2-4,000+ /test
$15,000+ /genome
$1,000 /genome
U.S. Healthcare Delivery System Challenges
 Procedure-based reimbursement
 Fragmented care transitions
 Undifferentiated quality
 Immature information technology
 Demographics: aging population, chronic disease
 Innovation
 Cost shifting
 Lack of transparency
35
NYP Market Challenges
 Declining overall and commercial utilization
 Increasing pressure on payer mix and pricing
 Increasing level of hospital consolidation
 Consolidation and restructuring of the physician landscape, threatening
existing informal referral relationships
– Aggressive physician alignment by large healthcare systems in the
NYC metropolitan area
– Rapid growth of large suburban physician organizations
36
Change in Commercial Discharges from
NYC 5-Borough & Westchester
25%
21%
20%
14%
15%
10%
5%
1%
0%
-5%
-1%
-4%
-1%
-2% -3%
-4%
-6%
-10%
-8%
-10%-9%
-15%
-15%
-20%
NYP
North
Shore/LIJ
Continuum
2010 - 2011 (1 year period)
NYU/Joint
Diseases
Montefiore
Mount Sinai
Total 5Boroughs &
Weschester
2007 - 2011 (5 year period)
Source: Truven
37
Demand Model: NYP’s Projected Discharges
140,000
130,538
130,000
120,000
122,483
117,853
110,000
99,499
100,000
113,471
115,411
95,774
97,411
2015
2019
90,000
80,000
70,000
2011
Loosely Managed
Moderately Managed
8 Year Capital Plan
Demand Model assumes that NYP will maintain constant share of the NY 5Borough and Westchester market
38
Projected Financial Impact of Reform on NYP
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
$
($50 M)
($100 M)
($150 M)
Expanded Medicaid Coverage
Value-Based Payments
($200 M)
Fiscal Cliff (DCI cut)
Readmissions
($250 M)
2% Reduction in Medicaid Reimbursement Rates
Medicaid Elimination of Trend Factor
Sequestration
($300 M)
Employer Benefit Costs
DSH Reductions
Medicare Market Basket Adjustments
($350 M)
($400 M)
39
NYC Key Competitors
NYP
Hackensack
Montefiore
Mount Sinai
Health System
NYU
NSLIJ
MSKCC
Strategic Tension: Clinical Demand vs Business
Profitability
Clinical Program
Analysis
Strategic
Business Analysis
Epidemiology /
Biostatistics
Finance / Policy
Modeling
Modeling
Evaluation
Evaluation
41
42
Two Choices
To Achieve Our Vision, NYP’s Business Model Is Built Around
6 Strategic Initiatives
44
Strengthening Health and Wellbeing at NYP
Reaching multiple populations…
 Employees
 National
 Corporate
 International
- National
 Regional Health Collaborative
- International
…of all health statuses…
 Healthy
 Acute Illness
 Chronic Illness
…to deliver comprehensive care
 Primary prevention
 Acute episode
 Tertiary prevention
HEALTH IT
* 2017 represents when programs will be fully operational and mature
Health and Wellbeing at NYP
 Primary Prevention
– To protect individuals
from developing
disease
Clinical Transformation: 360°
Focus
Health & Wellbeing
Acute
Care
 Tertiary Prevention
– To manage
complicated, longterm health problems
and prevent disease
progression
Primary
Prevention
Tertiary
Prevention
Care Coordination
Patient Engagement
Program Evaluation & Outcomes
Engage Staff & Patients
Staff, Patient & Family Engagement
Staff, Patient & Family Engagement
Culture
Patient Care
Goal: To develop staff programs and
practices that align with NYP’s values
Goal: To enable patients to become more
involved in their care by providing them
with education and other necessary tools
Environment of Care
Goal: To improve quality of care and
the patient experience by involving
patients and families in policies,
programs, and changes in care delivery
Community
Goal: To enhance population health by
partnering with community based
organizations
Making Care Better
A comprehensive, interdisciplinary redesign of clinical systems and
processes to deliver greater value across the care continuum
Key Concepts
Promote integrated, team-based care
Align people, process and technology
Results
Measurably improve quality
Reduce waste, variation and duplication
48
MAKING CARE BETTER: Standardize and Coordinate
Care & Practice within a Safe and Highly Reliable Culture
Provide Highly Reliable
Innovative Care
Deliver & Demonstrate
Value
DOCUMENT
PCP & referring MD (external)
NYP Care team
Admitting diagnosis
Initial screening by care coordinator
UTILIZE
Daily interdisciplinary rounds
Discharge bundle
DETERMINE
Availability & appropriateness of clinical pathway
Eligibility for hospital ambulation
Eligibility for palliative care
EDUCATE
NQF Teachback on patients for self-management skills
Patients regarding portals (mynyp.org)
COMMUNICATE
Communication about errors
Communication openness
49
ACO Governance
NewYork-Presbyterian
Hospital
Weill Cornell
Columbia
Corporate Members
NYP-CU-WCU Integrated Services, LLC
ACO Board of Managers
NYP
Weill Cornell
Participant
Participant
Columbia
Participant
Improve & Expand
Access
Network Development
Manhattan
51
Large Scale Ambulatory Strategies are Needed to Address
Geographic Coverage Needs
Geographic area necessary to reach
~50,000 lives

Source: Truven
52
Management Services
The Future State is an Evolutionary/Hybrid Process
Organizational construct to support an evolutionary model. Rapid change that doesn’t
impact the quality/standards of NYPH. Functions may be at various stages of evolution,
resulting in a hybrid model.
Phase 1 - Build
Growth/Accumulation
(While maintaining certain brand/experience
requirements)
Phase 2 - Assimilation
Integration/Standardization
Phase 3 – Integrated Performance
Unified Brand/
Consistent Delivery of Care/Economies of Scale
53
HERCULES
HERCULES is a key hospital-wide initiative to cut costs & increase efficiencies while
providing the highest-quality, most compassionate care & service to our patients
Goal: Remove $150M of Cost in 3 Years
Clinical
Resource
Optimization
Making Care
Better
• Supply alternatives
• Recycling opportunities
• Reduce waste
• LOS
• Benchmarking
Operational • Consolidation potential
Excellence • Slowing growth rate
• Ancillary utilization
• Standardize Care
Supply
• Duplicative testing
• Care Coordination
Utilization
• Practice variability
54
Information Technology and Innovation
 Information Technology
Innovation Center
55
Deliver & Demonstrate
Value
Data Analytics Framework
Governance
• Stewardship
• Data sharing
Data
Standardization
Reporting &
Monitoring
• Retrospective
& Real-time
information
• Data Dictionary
• “Source of truth”
• Process &
outcome
measures
• Accountability
• Privacy &
Security
• Population
Management
• Role-based
dashboards
Analytical
Capability
• Descriptive
(what happened?)
• Diagnostic
(why did it
happen?)
• Predictive
(what will happen?)
• Prescriptive
(what should
happen?)
IT
Identify solutions to meet future unmet needs
56
Deliver & Demonstrate
Value
Data Analytics: Physician Reporting
Department, Division, Physician
CMO / Associate CMOs
Division Chiefs
Attendings
Flow of Information and
Accountability
Department Chair
Residents
57
Data Analytics: Nursing Unit
Provide Highly Reliable
Innovative Care
Deliver & Demonstrate
Value
HERCULES Status as of July 22, 2014
Project Status (in milllions)
$60.87
$58.70
$60.00
$5.94
$5.94
$45.00
$23.80
$23.66
Planned
Underway
$30.00
Done
$21.63
$0.67
$6.63
$15.00
$16.20
$4.00
$11.55
$1.17
$1.52
$14.33
$11.49
$31.10
$29.10
$0.10
$4.55
$11.11
$8.83
$6.84
$1.10
$Operational Excellence
Making Care Better/Patient
Flow
Supply Utilization
Clinical Resource
Optimization
Grand Total
Prior Month Total
59
60