Med-GPS™ Patient Level Information Linking Clinical Activities with their Costs

Jean Mireault, M.D., M.Sc.

Vice-President, Clinical Affairs and

Chairman of the Board

January 2014

MediaMed Technologies is a

committed corporate citizen ● Over 13 years of expertise in the

development of case costing projects

● Rigorous, documented case costing

methodology developed with network

stakeholders

● 50 professionals dedicated to

performance management in healthcare

● Financial partner with Investissement

Québec (public corporation)

● Partner with over 50% of Quebec hospitals

and a number of regional healthcare

authorities

WHO WE ARE

2

Nord-du-Québec

Saguenay- Lac Saint-Jean

Côte-Nord

Abitibi-Témiscamingue

Outaouais

Laurentides

Lanaudière

Mauricie et Centre-

du-Québec

Bas-Saint-Laurent

Gaspésie-Îles- de-la-Madeleine

Capitale- Nationale

Estrie Laval

Chaudière-Appalaches

Montréal Montérégie

Outside Quebec Vancouver Island Health Authority

01 Bas-Saint-Laurent HSSC of Rimouski-Neigette

02 Saguenay-Lac-Saint-Jean (HA) HSSC Maria-Chapdelaine HSSC Cléophas-Claveau HSSC of Jonquière HSSC of Chicoutimi HSSC Domaine-du-Roy HSSC de Lac-Saint-Jean-Est

03 Capitale-Nationale (HA) Quebec Pulmonary and Cardiology

University Institute

04 Mauricie and Centre-du-Québec HSSC d’Arthabaska-et-de-l’Érable HSSC of l’Énergie HSSC of Trois-Rivières HSSC Drummond

06 Montréal (HA) Sainte-Justine Pedeatrics Hospital Montreal University Hospital Centre Sainte Mary’s Hospital Centre McGill University Health Centre HSSC Cavendish HSSC of l’Ouest-de-l’Île HSSC of Cœur-de-l’Île HSSC of Saint-Léonard and Saint-Michel HSSC Jeanne-Mance HSSC Lucille-Teasdale HSSC of Sud-Ouest-Verdun Montreal Sacré-Coeur Hospital Jewish General Hospital Maisonneuve-Rosemont Hospital Santa Cabrini Hospital Montreal Heart Institute

Ministry of health and social service in

Quebec

12 Chaudière-Appalaches (HA)

HSSC Alphonse-Desjardins HSSC of Beauce HSSC of la région de Thetford HSSC of Montmagny-L’Islet

13 Laval HSSC of Laval

14 Lanaudière HSSC of Nord de Lanaudière

15 Laurentides HSSC of Saint-Jérôme HSSC of Antoine-Labelle HSSC des Sommets HSSC of Argenteuil HSSC of Lac-des-Deux-Montagnes

16 Montérégie HSSC Champlain-Charles-Lemoyne HSSC Pierre-de-Saurel HSSC Richelieu-Yamaska HSSC of la Haute-Yamaska HSSC of Suroît HSSC Haut-Richelieu-Rouville HSSC of Vaudreuil-Soulanges

07 Outaouais HSSC of Gatineau HSSC of Papineau HSSC of la Vallée-de-la-Gatineau HSSC des Collines HSSC of Pontiac

08 Abitibi-Témiscamingue HSSC of Témiscamingue HSSC of Aurores-Boréales HSSC Les Eskers de l’Abitibi HSSC of Rouyn-Noranda HSSC of la Vallée-de-l’Or

09 Côte-Nord HSSC of Sept-Îles HSSC of Manicouagan

Vancouver Island Health Authority

Over 60 clients including 50 % of the hospital in

Quebec and four health authorities

Our Expertise: Patient Trajectory

4

Med-GPS

5

• The current situation of each department

• Average length of stay

• Clinical severity

or intensity of

services

• Links between

programs and services

• The continuum of care linking the hospitals, community care centres and long-term care facilities

6

• Links with family medicine

groups and local health networks

• Cost per patient

• Demographic variation

• Chronic diseases

impacting community care

centers

Understanding the patient care

trajectory involves integrating

clinical information including :

• Abundant repertory of care episodes valued at 14

billion dollars

• The Activity-based Costing module in Med-GPS is

currently implemented in 14 medical facilities of

various size, mission, and budget

• Budgetary restraints have created a demand for these

tools as a means of increasing one’s understanding of

the link between clinical and financial performance

Our Expertise: Patient Level Costing

7

Annual Update: Activity-based

Costing Data

8

Yearly

Current clients – Med-GPS ABC $3.4 Billion

Provincial operating costs of medical facilities (10-11) $12.65 Billion

% of provincial budget – MMT Med-GPS ABC Clients 27%

% of provincial budget –MMT Med-GPS ABC & Med-GPS

Clients 56%

Ind

ire

ct

Co

sts

Dire

ct

Co

sts

Cost Distribution

9

Expenses are separated into 4 levels (100, 200, 300 and 400)

Only validated expenses and clinical activities are used in our costing model

Level 100 Activities related directly to the patient

Level 200 Supervision and coordination

Level 300 Support activities

Level 400 Senior management

Patient Level Costing Example Cardiac Valve Operation, without Cardiac Catheterization; Severity 3

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

EMERGENCY

ER visit………………………..$5.66

1 visit at $5.66

Time on stretcher………..$153.70

21.93 hours at $7.01

Patient to be

hospitalized………………$112.14

1 at $112.14

Patient on stretcher……..$175.44

1 at $175.44

Time stretcher + ER

(administrative activities)……….

………………………..…….$126.28

22.92 hours at $5.51

TOTAL DIRECT COST OF ER

$572

EMERGENCY

Patient Level Costing Example Cardiac Valve Operation, without Cardiac Catheterization; Severity 3

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

OPERATING UNIT

Supplies…………………….$3,695

AORTIC VALVE

(biological) 12A19 MITROFLOW

Remaining supplies

(by specialty)……….……$2,844

21.93 hours at $7.01

Time in room at the OR....…$248

4.01 hours at $61.81

Number of operations....…. $781

1 at $781

CEC treatment

(perfusionst)………......….…$408

4.01 hours at $101.71

People in OR………..........…$825

8 people at 4.01 hours of OR

time X $25.70/hour

TOTAL DIRECT COST OF

OPERATING UNIT

$8,802

EMERGENCY

Patient Level Costing Example Cardiac Valve Operation, without Cardiac Catheterization; Severity 3

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

INTENSIVE CARE

Bed days…………………...$85.89 8 days at $10.74

Days/severity………..……$7,095 8 days at $2.53 (weighted severity) at $350.58

Transfers…………………….$95.41 4 transfers at $23.85

Patient on bed……...…....$175.44

1 at $175.44

% CA 6053 work hours…..…$150

TOTAL DIRECT COST OF

INTENSIVE CARE

$7,426

EMERGENCY

Patient Level Costing Example Cardiac Valve Operation, without Cardiac Catheterization; Severity 3

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

CARE UNITS

Bed days…………………....$42.40 6 days at $7.07

Bed days/severity..……$3,160 6 days at $1.69 (weighted severity) at $311.63

Transfers………….………....$96,92 2 transfers at $48.46

TOTAL DIRECT COST OF

CARE UNITS

$3,300

EMERGENCY

Patient Level Costing Example Cardiac Valve Operation, without Cardiac Catheterization; Severity 3

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

RELATED ACTIVITIES

CLINIC………………….…...$3,705

Pharmacy.……….…..$2,044 Labour = $656 Médication = $1,388

Nutrition…………….…..$415 Number of bed days = 14 at $29.62

Imaging………….…...$1,246 Number of units (total medical imaging) 6830 = 512 at $1.09

Number of units (IMG) 6831 - General Radiology = 353 at $1.31 Number of units (IMG) 6832 - Ultrasonography = 131 at $0.93 Number of units (IMG) 6834 - Computed Tomography = 30 at $3.39

GENERAL VARIABLE FEES…………………………..$7,689 Management of care, laundry, general fees, other…

TOTAL COST OF RELATED

ACTIVITIES

$11,394

EMERGENCY

Patient Level Costing Example Cardiac Valve Operation, without Cardiac Catheterization; Severity 3

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

FINAL INVOICE

EMERGENCY ROOM…..$572

OPERATING UNIT....….$8,802

INTENSIVE CARE.…….$7,426

CARE UNITS…….…….$3,300

RELATED

ACTIVITIES…………..$11,394 Clinic….………………………$3,705 General variable costs……$7,689

TOTAL COST

$31,494

EMERGENCY

Cost and Tariff

16

FINAL COST

EMERGENCY ROOM..................$572

OPERATING UNIT…...................$8,802

INTENSIVE CARE..……….......…$7,426

CARE UNITS……........................$3,300

RELATED ACTIVITIES….……….$11,394 Clinic…………………………………….….$3,705

General variable costs……………....….$7,689

TOTAL COST……..…….$31,494

RWI/NIRRU……………..$19,173

GAP………....………. + 64.26%

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

Patient Level Costing Example Chronic Obstructive Pulmonary Disease (COPD)

EMERGENCY

EMERGENCY

Stretcher (Intensive and

regular)……………………..$8,144

64 hours

Therapeutic…………............$420

Pharmacy salaries……....…$440

Pharmacy purchases………$172

Laboratory……………………$181

Imaging……………………….$191

TOTAL DIRECT COST OF THE

EMERGENCY

$9,548

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

Patient Level Costing Example Chronic Obstructive Pulmonary Disease (COPD)

INTENSIVE CARE

Bed days………..…..……...$2,983 2 days

TOTAL DIRECT COST OF

INTENSIVE CARE

$2,983

EMERGENCY

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

Patient Level Costing Example Chronic Obstructive Pulmonary Disease (COPD)

CARE UNITS

Pneumology unit……..….$12,682 29 days

TOTAL DIRECT COST OF

CARE UNITS

$12,682

EMERGENCY

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

Patient Level Costing Example Chronic Obstructive Pulmonary Disease (COPD)

RELATED ACTIVITIES

Pharmacy salaries

and purchase……………..$2,758

Use of Enoxaparin for 20%

Inhalation therapy………….$799

14.2 hours

Imaging………………………$269

149 unit value for $269

Electrophysiology………..…$275 222 unit value for $275

Physiotherapy……………….$507 5.7 hours for $507

TOTAL COST OF RELATED

ACTIVITIES

$4,608

EMERGENCY

RELATED ACTIVITIES

CARE UNITS

INTENSIVE CARE

OPERATING UNIT

Patient Level Costing Example Chronic Obstructive Pulmonary Disease (COPD)

EMERGENCY

FINAL INVOICE

EMERGENCY……........$9,548

INTENSIVE CARE...…..$2,983

CARE UNITS……...….$12,682

RELATED

ACTIVITIES…………...$4,608

TOTAL COST

$29,821

Cost and Tariff

22

FINAL INVOICE

EMERGENCY……….................$9,548

INTENSIVE CARE..……….......…$2,983

CARE UNITS……......................$12,682

RELATED ACTIVITIES….……..….$4,608

TOTAL COST……..…….$29,821

RWI/NIRRU……………..$33 250

GAP...……………..……. – 11 %

The Importance of Understanding

and Controlling Cost Variations

23

330 episodes of care

Average Cost: $12,002 Median Cost: $9,350

Performance driven by 32 outliers

Access to

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• Mandated by 2 Health and Social Services (regional) Agencies to benchmark costs

for 11 hospitals (across 4 regions) for 51 case mix groups (CMGs)

• Approximately $2 Billion analyzed in our cost-per-case model for this project

• Spring 2013

Orange Project Quebec-based Case Costing Project

26

Average Cost

$ 7,367

For 147,107 episodes

Variations by Medical Facility

Variations by

Department

Variations by

Patient

Assessment of the Impacts of

Readmission

27

$16 000

$13 000

$10 000

$7 000

$4 000

Readmissions based on all episodes Average cost of readmissions within 30 days

Total Cost of Readmission - 30 Days

150.6 million dollars or 14 % of annual expenses

Assessment of Costs Related to

Infections and/or Complications

28

$24 000

$20 000

$16 000

$12 000

$8 000

Average Cost Average Cost with Infection and/or Complication

Supplemental Costs

261.7 Million Dollars or 24% of Annual Expenses.

• Example: Hip Replacement

Orange Project Quebec-based Case Costing Project Partitioned by Case

Mix Group (CMG)

29

Average Cost of

Replacement

12,630 $

For 957 episodes

Variations by Medical Facility

Variations by

Department

Variations by

Patient

Variations by Medical Facility CMG 301: Hip Replacement

30

9 609 $ 8 389 $ 11 043 $

9 085 $ 8 617 $ 10 413 $ 9 534 $

1 167 $ 801 $ 1 886 $ 1 975 $

1 210 $ 1 273 $ 1 478 $

1 595 $ 1 221 $ 1 646 $ 2 062 $ 1 323 $ 1 676 $ 1 618 $

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6 Totaux

Coût moyen niveau 100-200 Coût moyen niveau 300 Coût moyen niveau 400

11 149 $ 12 371 $ 10 411 $ 14 574 $ 13 122 $ 13 362 $ 12 630 $

Average cost levels 100-200 Average cost level 300 Average cost level 400

Total

Facility Emergency Nursing Bloc op.

salaires

Bloc op.

achats Therapeutics Imaging Lab.

Other

Costs Total

1 $33 $2,199 862 $ 5 109 $ $484 $63 $82 $2,788 $12,371

2 $12 $2,309 867 $ 4 203 $ $146 $126 NA $2,038 $10,411

3 $65 $2,298 996 $ 6 267 $ $499 $102 $163 $3,773 $14,574

4 $238 $2,401 960 $ 4 079 $ $381 $115 $355 $4,180 $13,122

5 $58 $1,915 913 $ 4 952 $ $263 $73 NA $2,617 $11,149

6 $186 $2,891 782 $ 5 202 $ $325 $122 $145 $3,147 $13,362

Total $118 $2,287 909 $ 4 963 $ $348 $97 $220 $3,229 $12,630

Costs by Department CMG 301: Hip Replacement

31

OR Salaries OR Supplies

$862 $5,109

$867 $4,203

$996 $6,267

$960 $4,079

$913 $4,952

$782 $5,202

$909 $4,963

4 000 $

4 750 $

5 500 $

6 250 $

7 000 $

1 2 3 4 5 6

Operating Room - Supplies

700 $

775 $

850 $

925 $

1 000 $

1 2 3 4 5 6

Operating Room - Salaries

Costs by Department CMG 301: Hip Replacement

32

OR Salaries OR Supplies

$862 $5,109

$867 $4,203

$996 $6,267

$960 $4,079

$913 $4,952

$782 $5,202

$909 $4,963

Example: Chronic Obstructive Pulmonary Disease

Projet Orange Quebec-based Case Costing Project Partitioned by Case

Mix Group (CMG)

33

Variations by Medical Facility

Variations by

Department

Variations by

Patient

Average COPD cost

$7,266

For 2,961 episodes

Variations by Medical Facility CMG 140: Chronic Obstructive Pulmonary Disease

34

$3 308 $3 780 $4 511 $4 473 $4 380 $4 754 $5 839

$5 397 $5 514 $7 532 $4 241 $5 423

$733 $841

$711 $628 $651 $945

$1 289

$679 $830 $1 064 $646

$897

$994 $1 106 $851 $690 $807 $914 $1 321

$606 $917 $1 109 $575 $946

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6 7 8 9 10 11 Totaux

Coût moyen niveau 100-200 Coût moyen niveau 300 Coût moyen niveau 400

7 266 $ 7 260 $ 9 705 $ 5 462 $ 5 035 $ 5 728 $ 6 072 $ 5 791 $ 5 838 $ 6 613 $ 8 449 $ 6 682 $

Average cost levels 100-200 Average cost level 300 Average cost level 400

Facility Emergency Nursing Pharmacie

salaires

Pharmacie

achats Therapeutics Imaging Lab

Other

Costs Total

1 $392 $2,307 201 $ 324 $ $11 $48 NA $1,752 $5,035

2 $430 $2,788 119 $ 325 $ $78 $30 NA $1,958 $5,728

3 $258 $3,150 234 $ 268 $ $500 $59 NA $1,601 $6,072

4 $348 $3,061 356 $ 427 $ $45 $73 $135 $1,346 $5,791

5 $373 $3,025 380 $ 460 $ $44 $73 NA $1,480 $5,838

6 $261 $2,624 231 $ 526 $ $577 $72 $257 $2,065 $6,613

7 $941 $2,712 131 $ 382 $ $1,042 $95 $308 $2,838 $8,449

8 $64 $2,432 415 $ 912 $ $261 $250 $734 $1,529 $6,682

9 $1,148 $2,817 216 $ 486 $ $535 $87 NA $1,971 $7,260

10 $493 $3,817 393 $ 1 021 $ $891 $139 $338 $2,613 $9,705

11 $531 $2,241 200 $ 250 $ $661 $81 $140 $1,358 $5,462

Total $600 $2,900 514 $ $609 $89 $256 $2,047 $7,266

Costs by Department CMG 140: Chronic Obstructive Pulmonary Disease

35

Pharmacy

Salaries

Pharmacy

Purchases

$201 $324

$119 $325

$234 $268

$356 $427

$380 $460

$231 $526

$131 $382

$415 $912

$216 $486

$393 $1,021

$200 $250

$251 $514

0 $

200 $

400 $

600 $

800 $

1 000 $

1 200 $

1 2 3 4 5 6 7 8 9 10 11

Pharmacy - Purchases

0 $

100 $

200 $

300 $

400 $

500 $

1 2 3 4 5 6 7 8 9 10 11

Pharmacy - Salaries

Costs by Department CMG 140: Chronic Obstructive Pulmonary Disease

36

Pharmacy

Salaries

Pharmacy

Purchases

$201 $324

$119 $325

$234 $268

$356 $427

$380 $460

$231 $526

$131 $382

$415 $912

$216 $486

$393 $1,021

$200 $250

$251 $514

Total: $4,538,409

Evaluation of Readmission Costs CMG 140: Chronic Obstructive Pulmonary Disease

37

1 2 3 4 5 6 7 8 9 10 11

$13,000

$11,000

$9,000

$7,000

$5,000 0,00%

10,00%

20,00%

30,00%

40,00%

Readmissions based on all episodes Average cost of readmissions within 30 days

125 $

375 $

625 $

875 $

1 125 $

1 2 3 4 5 6 7 8 9 10 11

Tho

usa

nd

Total Cost of Readmission – 30 Days

Variation of COPD Costs

38

Average: $7,266 Median: $4,824 Coefficient of Variation: 112%

• Ability to analyze the local cost of specific clinical divisions – Nursing

– Pharmacy

• Ability to analyze local variations in price and clinical practices – Supplies

– Medication

• Comparison between medical facilities allows to develop an understanding of clinical processes and their variations

Utilization of Results

39

Patients Visits % Time on Stretcher Costs

16.4% 15.8% 4.1% 18.1%

EMERGENCY ROOM

Regional Use of Emergency Rooms

1 Visit 2 Visits 3 Visits 4 Visits 5 + Visits

Regional Short-term Use of Beds

HOSPITALIZATION

Patients Admissions Bed Days Costs

1 Hospitalization 2 Hospitalizations 3 + Hospitalizations

4.1% 15.9% 12.3% 18.9%

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• Patient-level costing – Opportunity to engage physicians in performance

discussions/decisions

– Identification of clear link between clinical decisions and performance optimization potential

– Highlighting of opportunities for continuous improvement of operations

– Identification of cost variation relative to the tariff price

– Facilitation of healthcare modeling

• Patient-level costing is the first step towards patient-based funding

Summary

43

44

The

first

step is

always the

HARDEST

45

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