Improving Patient Outcomes and

Reducing Hospital Costs with ON-Q* Products

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Healthcare Changes due to Value-Based Purchasing and Affordable Care Act

• Under Value-Based Purchasing (VBP) CMS will withhold 1% of payments which can be earned back as a bonus, based on two major areas in year one

– Clinical Process of Care1 - Hospitals have been working on these elements for years – HCAHPS scores - a strong area of focus for improvement

• Affordable Care Act will influence Hospitals to develop Clinically Integrated Organizations with an emphasis on “Population Health Management” focusing on wellness, prevention & outcomes and overall cost of care

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Change Hospital Business Models

Control Costs

Improve Patient Experience

Improve Outcomes

Bottom Line:

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Value-Based Purchasing, 2013 Fiscal Year (Oct 2012),

Patient Experience of Care (HCAHPS) is 30%1

Patient Experience

of Care Domain

30% 12 Clinical Process of

Care Domain

70%

Weighted Value of Each Domain

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8 Patient Experience of Care Dimensions (HCAHPS)

1. Nurse Communication 2. Doctor Communication 3. Hospital Staff

Responsiveness 4. Pain Management 5. Medicine Communication 6. Hospital Cleanliness &

Quietness 7. Discharge Information 8. Overall Hospital Rating

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ON-Q* Pain Relief System Executive Summary/Platform

• Narcotics Reduction • Recovery/Length of Stay • Hospital-Acquired Infections • Financial Benefits of a Narcotics Reduction

Program: – Patient Satisfaction/HCAHPS – Reducing Readmissions

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Narcotics Reduction

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Side Effect Consequence Nausea and Vomiting2 Delays a return to normal diet and bowel function; may require

drugs to treat; can prolong the length of stay.

Ileus and Constipation2 May delay discharge and increase costs.

Somnolence & Confusion2 Delays ambulation vital to recovery; may prolong the length of stay.

Surgical Site Infections3 SSIs delay discharge and increase costs.

Respiratory Depression4 Generally preceded by sedation, respiratory depression may require additional monitoring. (If not recognized in a timely manner, can cause death.)

Urinary Retention2 (May necessitate longer catheterization ), increasing the risk of urinary tract infections (UTIs).

The ON-Q* Pain Relief System Reduces the need for Narcotics, Reducing Narcotic Side Effects

The Joint Commission issued a Sentinel Event Alert regarding opioid-related adverse drug events including deaths – Issue 49, August 8, 20124

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Recovery/Length of Stay

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Why Patients Stay in the Hospital • Pain management • Narcotic side effects • Treatment of infection • Delayed return of bowel

function • Diminished urinary function • Inability to eat solid foods • Restricted ambulation

• Sleep apnea • Bleeding • Failure of pulmonary

function (breathing) testing • DVT/PE risks • Pneumonia • Patient history • Other causes?

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And, longer stays in the hospital are costly. One day in the hospital costs on average $19105

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Opioid-Related Adverse Drug Events (ADEs) in Surgical Hospitalizations

• Impact on Length of Stay (LOS) and Costs6: Patients experiencing opioid-related ADEs – Increased median LOS by 10.3% (p < 0.001), or >1 day LOS7,8 – Significantly increased median total hospital costs by 7.4% (p < 0.001)

• ADEs are Common – Opioid-related ADEs occurred in 19.4% of colorectal, hysterectomy, and hip

replacement surgeries, significantly increasing costs and LOS9

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Hospital-Acquired Infections (HAIs)

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Hospital Acquired Infections (HAIs)10 - Background

• In the U.S., HAIs account for an estimated 2 million infections per year, over 100,000 deaths and add in excess of $30.5 billion to healthcare expenditures

• CDC estimates that HAIs are the 4th leading cause of death

• 10% of hospital patients contract infections

• CMS no longer pays for HAIs after certain surgeries in FY 2008, nor will they pay for catheter-associated urinary tract infections

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Narcotics and Risk of HAIs

• PCA use with Narcotics increases surgical site infection risk – 10.4% with PCA vs. 4% without PCA3,11

• Narcotics increase susceptibility to Streptococcus pneumoniae lung infection12

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Costs of Surgical Site Infections

• Surgical site infection (SSI) mean cost is $15,27510

• Patients with SSIs require more outpatient visits, ER visits, radiology services, readmissions and home health aid services13

• Patients with SSIs after discharge have costs 290% greater than patients without SSI13

• SSI patients were more than twice as likely to die, 60% more likely to be admitted to an ICU and more than 5 times more likely to be readmitted14

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Why Infection Rates May Be Lower With ON-Q* Pumps: They Reduce Need for Narcotics

• Narcotics cause immunosuppression & reduce immune responses

• Opioid use reduces Natural Killer cells15

• Some local anesthetics have antimicrobial activity16 & improved tissue oxygenation17

• Pain reduces oxygen levels in tissue18 and contributes to lower immune responses19

• With ON-Q* patients ambulate earlier, breathe deeper20

• ON-Q* is sterile for every patient, whereas PCA pumps are frequently contaminated10

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Financial Benefits of a Narcotics Reduction Program in Postoperative

Pain Management

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Financial Benefits that May Result From A

Narcotics Reduction Program

• Reduction in length of stay & related costs21

• Increase in patient through-put for > revenues22

• Reduction in the risk of HAIs11,12,19 & adverse events thus reducing non-reimbursed treatment costs23,24

• Reduction in the number of ER visits /readmissions due to pain or narcotic related complications23,24,25,26

• Saving the hospital millions of dollars24

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Reducing Inpatient Narcotics May Help to Prevent Hospital Readmissions

• 22.4% of all episodes of care for Medicare patients resulted in readmission at an average cost of $18,000 per patient26

• Large study >10,000 cases, unplanned readmission within 30 days was 24% to 33% more likely for those on high-risk medications25

• Factors associated with readmission within 30 days include inpatient use of narcotics

• Starting in October 2012, hospitals with high readmission rates could be impacted from 0.42% to 1% of Medicare revenues24 (and this penalty is expected to increase up to 3% in October 2014)

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HCAHPS: Patient Perceptions of Pain Control Affect Patient Experience

• The odds of a patient being satisfied were 4.86 times greater if pain was controlled

• Hospitals may improve their patients’ satisfaction by focusing on improving the culture of pain management27

• Each of the HCAHPS survey areas are correlated to answers in other areas, Pain Management is highly correlated with • Communications with Nurses and Doctors • Overall Hospital Rating28

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I-Flow* ON-Q* Solution for Post Surgical Pain Management

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I-Flow* Solution

• I-Flow* offers ON-Q* post-surgical and trauma pain management solutions

• The ON-Q* Solution: – Reduces narcotics consumption – Increases patient satisfaction – Reduces length of stay29

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I-Flow*, LLC Profile • >140 Published and Presented Clinical Studies • > 40 Million Infusion Pumps used Worldwide • 170 Regional Anesthesia Consultants provide

Training and Support • 19 Regional Anesthesia Training Centers and

Cadaver Labs • Educational Physician to Physician Training and

Speaking Events • 24/7 Support to your Patients and Physicians with

Clinical/Product Support Hotline

21 I-Flow*, LLC was acquired by Kimberly-Clark and became a Kimberly-Clark Health Care Company in November 2009

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What is the ON-Q* System? • The ON-Q* System is a portable, disposable pain

relief delivery system that uses a small, balloon-like pump and catheter to deliver local anesthetic near a surgical site or as a nerve block, reducing patients’ needs for narcotics

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PNB Incisional Systemic

Narcotics

Epidural

Spinal

Applications: • Orthopedics: Knees, Hips,

Shoulders, Spine • CV/CT • General • OB/GYN • Trauma • Others

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Promote and Adopt a Narcotic Reduction Program as a Strategy to:

• Reduce narcotic side effects

• Reduce average LOS

• Accelerate patient through-put29

• Reduce HAIs3 • Reduce Cost to Discharge for Outliers thus Increasing

Profits

• Improve patient experience

• Provide hospital cost savings and improved patient outcomes29

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APPENDIX

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Evidence-Based Outcome Evaluation Example

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The following data represent 17 aggregated Evidence Based evaluations in 1248 patients undergoing open heart procedures. The data at each of the participating centers were collected in a retrospective fashion utilizing a common case report form (found below). A minimum of 15 patients per arm (ON-Q* versus standard of care pain management) was requested from each of the centers. Data were obtained through medical record review and entered into a common database for analysis. Data represents multiple hospitals evaluations, a similar evaluation can be done with your organization.

Reduction of Selected Outcome Metrics resulting from ON-Q* Use:

Data Review Comparative Analysis Date: 01/03/12

Outcome ON-Q*

Average (n = 737)

Control Average

(n = 511) p value

Age (years) 62.2 61.6 0.37 ASA Score 4.0 3.9 0.02

ICU time (hours) 62.6 67.0 0.09 Length of stay (days) 5.6 6.5 <0.0001

Narcotics use (morphine equivalencies) Day 1 (mg) 11.4 16.5 <0.0001 Day 2 (mg) 10.3 14.0 <0.0001 Day 3 (mg) 7.1 10.0 <0.0001 Day 4 (mg) 5.1 7.8 <0.0001

Narcotics Total (mg) 33.2 46.9 <0.0001 Pain Scores - VAS (0-10)

Day 1 2.6 4.6 <0.0001 Day 2 3.1 4.8 <0.0001 Day 3 2.7 4.3 <0.0001 Day 4 2.2 3.8 <0.0001 Day 5 1.5 3.5 <0.0001

First Bowel Movement (day) 3.4 4.0 0.0004

MK-00368 Data is on file at I-Flow* a similar study can be performed with your organization

CMS 2013 Fiscal Year (Oct 2012), Patient Experience of Care Domain is 30%1

26 *VBP (Value-Based Purchasing), Patient Experience measured by HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems

*

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As Hospitals Look at Population Health Management and Outcomes, Narcotic Misuse Represents a

Significant Societal Health Problem • Nearly half a million emergency department visits in 2009 were due to

people misusing or abusing prescription painkillers • Nonmedical use of prescription painkillers cost up to $72.5 billion annually

in direct health care costs • Prescription painkiller overdoses killed nearly 15,000 people in the US in

2008. This is more than 3 times the 4,000 people killed by these drugs in 1999

• In 2010, about 12 million Americans (age 12 or older) reported nonmedical use of prescription painkillers in the past year

• The supply of prescription painkillers is larger than ever, the quantity of prescription painkillers sold to pharmacies, hospitals, and doctors’ offices was 4 times larger in 2010 than in 199931

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HCAHPS Patient-Level Score Correlations, Pain Management is Highly Correlated to Communications

and to Overall Hospital Rating28

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References 1 CMS.gov: Open Door Forum: Hospital Value-Based Purchasing Proposed. Centers for Medicare & Medicaid Services: 2011 Jul 27.

Available from: http://www.cms.gov/site-search/search-results.html CMS.gov: National Provider Call: Hospital Value-Based Purchasing Centers for Medicare & Medicaid Services: 2011 Jul 11. Available from: http://www.cms.gov/site-search/search-results.html

2 Benyamin R, Trescot AM, Datta S, Buenaventura R, Adlaka R, Sehgal N, Glaser SE, Vallejo R. Opioid Complications and Side Effects. Pain Physician. 2008: Opioid Special Issue: Available from: www.painphysicianjournal.com

3 Horn, DS. Wright, HL. Couperus, JJ. Rhodes RS, Smout RJ, Roberts KA, Linares AP. Association between patient-controlled analgesia pump use and Postoperative surgical site infection in intestinal surgery patients: Surgical Infections; 2002. 109p.

4 The Joint Commission Sentinel Event Alert, Safe use of opioids in hospitals. 2012 August 8; Available from: www.jointcommission.org 5 Statehealthfacts.org. Hospital Adjusted Expenses per Inpatient Day, 2010. 2010 AHA Annual Surveys; Available from:

http://www.statehealthfacts.org/comparemaptable. 6 Oderda GM, Said Q, Evans RS, Stoddard GJ, Lloyd J, Jackson K, Rublee D, Samore MH. Opioid-related adverse drug events in surgical

hospitalizations: impact on costs and length of stay. University of Utah Health Sciences Center. 2007 Mar 6; (3):400-6. Available from: http://www.ncbi.nlm.nih.gov/pubmed/17341537

7 Lissovoy G de, Fraeman K, Hutchins V, Murphy D, Song D, Vaughn BB. Surgical site infection: Incidence and impact on hospital utilization and treatment costs. American Journal Infection Control, 2009; Available from: http//www. Ajicjournal.org

8 Doyle E. Today's Hospitalist The search for a therapy to prevent and treat postoperative ileus. 2005 October; Available from: http//www.todayshospitalist.com

9 Ready T. Opioid-Related Problems Up Costs, Prolong Hospital Stays. Anesthesiology News. 2012 August; 38.8: 1-2. Available from: http://m.anesthesiologynews.com/Article.aspx

10 McCaughey B. Unnecessary Deaths: The Human and Financial Costs of Hospital Infections. 3rd ed. Rid committee to reduce infection deaths: Available from : http://www.hospitalinfection.org

11 Schwacha MG, McGwin G Jr., Hutchinson CB, Cross JM, MacLennan PA, Rue LW III. The contribution of opiate analgesics to the development of infection complications in burn patients. The American Journal of Surgery. 2006; 82-86

12 Wang J, Barke RA., Charboneau, Roy S. Morphine Impairs Host Innate Immune Response and Increase Susceptibility to Streptococcus pneumoniae Lung Infection. The Journal of Immunology. 2005; 174: 426-434

13 Perencevich EN, Sands KE, Cosgrove SE, Guadagnoli E, Meara E, Platt R. Health and Economic Impact of Surgical Site Infections Diagnosed after Hospital Discharge. Emerging Infectious Diseases. 2003 February; 9(2): 196-203

14 Kirkland KB, Briggs JP, Trivette SL, Wilkinson WE, Sexton DJ. Chicago Journals. The Impact of Surgical-Site Infections in the 1990s: Attributable Mortality, Excess Length of Hospitalization, and Extra Costs. Infection Control and Hospital Epidemiology. 1999 November; 20:725-730

15 Roy S, Loh HH. Effects of Opioids on the Immune System. Neurochemical Research. 1996 May; 21 (11): 1375-1386

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References, Continued

16 Borgeat A. Local Anesthetics: An Update. In: Balgrist University Hospital. 2011. Department of Anesthesiology; 2011; Zurich, Switzerland: Department of Anesthesiology; 2011. p.1-5

17 Ahmad M. Local anesthetic infiltration increases subcutaneous tissue oxygenation after lower abdominal surgery. 2004; Available from: http://www.asaabstracts.com/strands/asaabstracts/abstract.htm

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Buggy DJ, Kerin MJ. Paravertebral analgesia with levobupivacaine increase postoperative flap tissue oxygen tension after immediate latissimus Dorsi breast reconstruction compared with intravenous opioid analgesia. American Society of Anesthesiologists, Inc. Lippincott Williams & Wilkins, Inc; 2004 February; Anesthesiology 2004; P.375-380

19 Buggy, D. The Lancet. Can anaethetic management influence surgical-wound healing. 2000 July 9; 355-357

20 Truitt, M. et al, Continuous Intercostal Nerve Blockade for Rib Fractures: Ready for Primetime?, The Journal of Trauma injury, Infection, and Critical Care, Vol. 71, No. 6, Dec. 2011

21 Oderda GM, PharmD, Evans S, Lloyd J, Lipman A, PharmD, Chen C, PharmD, Ashburn M, Burke J, Samore M. Cost of Opioid-Related Adverse Drug Events in Surgical Patients. Journal of Pain and Symptom Management. 2003 March; Vol 25 (3) 276-283

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Williams BA, Kentor ML, Vogt MT, Vogt WB, Coley KC, Williams JP, Roberts MS, Chelly JE, Harner CD, Fu FH. Economics of Nerve Block Pain Management after Anterior Cruciate Ligament Reconstruction. American Society of Anesthesiology, Inc. Lippincott Williams & Wilkins, Inc. 2004 March; Anesthesiology 2004; P.697-706

23 Gold BS, Kitz DS, Lecky JH, Neuhaus JM. Unanticipated Admission to the Hospital following Ambulatory Surgery. The Journal of the American Medical Association Network. 1989 December 1; Available from: http://www.ncbi.nlm.nih.gov/pubmed/2810644

24 Cheung, KM. One in 10 surgical patients readmitted with post-op complications. Fierce Healthcare. 2012 August 29; Available from: http://www.fiercehealthcare.com

25 Phend C. Factors Make Predicting Hospital Readmission Easy. MedPage Today, 2010 October 13; Available from: http://www.medpagetoday.com/HospitalBasedMedicine/Hospitalist

26 Lee T. Readmissions More Than Double The Cost Of Care. The Daily Briefing. 2012 July 25; Available from : http://www.advisory.com/Daily-Briefing/2012/07/25/Readmissions-more-than-double-the

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Hanna MN, Gonzalez-Fernandez M, Barrett AD, Williams KA, Pronovost P. American Journal of Medical Quality. Does patient perception of pain control affect patient satisfaction across surgical units in a tertiary hospital. 2012 February 16; Available from: http://ajm.sagepub.com/content/early/2012/02/16/1062860611427769

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HCAHPS Patient-Level "TOP-BOX" Correlations. Patients-level Pearson correlations of the "top-box" scores of publicity reported HCAHPS measures, for patients discharged between July 2007 and June 2008 (2.2 million completed surveys). Available from: http://www.hcahpsonline.org/executive_insight/Files/Report_HEI_March_2010_Corrs.pdf

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Liu SS, Richman J, Thirlby R, Wu CL. Journal of the American College of Surgeons. Efficacy of Continuous Wound Catheters Delivering Local Anesthetic for Postoperative Analgesia: A Quantitative and Qualitative Systematic Review of Randomized Controlled Trials. 2006 December: Vol 203 (6); Available from: www.journalacs.org

30 www.hospitalcompare.hhs.gov

31 Centers for Disease Control and Prevention. CDC Vitalsigns 2011 November. Prescription Painkiller Overdoses in the US; Available from: http://www.cdc.gov/vitalsigns/painkillerOverdoses/index.html.

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