NordDRG full version based productivity reporting

1. NordDRG full version based productivity reporting Jorma Lauharanta Director of Helsinki University Hospital Area Nordic Casemix Conference 2010

2. Cathedral We are here Olympic stadium Meilahti campus

3. The goal is health gain How to increase? Output Visits Episodes etc Effectiveness Health gain Input Resources No health gain Productivity = output/input How to minimize? Jorma Lauharanta

4. How to maximize health gain? Evaluation of effectiveness Application of treatment methods, health technology Maximal health gain Some rejected Productivity improvement (with moderate costs) Jorma Lauharanta

5. Requirements for productivity improvement A. Productivity measurement and monitoring system B. Productivity development programme some important items: 1. improvement of process fluency 2. increase in labour productivity 3. increased efficiency in use of capacity and use of space 4. elimination of overlap, centralisation, and economies of scale 5. new operating models etc.

6. Productivity support in HUCH • Long-term productivity development programme created • Clinicians/ clinical managers’ accountability increased • -> new management system • Clinicians receive monthly reports of • intermediate product utilization • -> intermediate products per DRG group • -> product level price-cost reports • -> feedback about cost effects of clinical decisions • DRG-based productivity reporting

7. Price – cost comparisons

8. Accumulation of the patient related costs 1750 euros 1500 1250 procedure Sum of intermediate products: 1000 3 750 euros lab 750 rtg Costs / day 500 pathology 250 basic care at the ward 1 2 3 4 5 days

9. Determination of the average DRG cost (-> billing price, DRG weight) various total costs per individual patients expensive inexpensive cost per patient “untrimmed” average “trimmed” average DRG cost I phase outliers < - 3 SD II phase outliers < - 2 SD II phase outliers > +2 SD I phase outliers > +3 SD Jorma Lauharanta

10. Cost distribution of DRG 112D outliers - 1 SD = 2 933 euro billing price5 190 euro + 1 SD = 9 286 euro outliers PCI w/o myocardial infarction w cc

11. Billing distribution of DRG 112D outliers - 1 SD = 2 933 euro billing price 5 190 euro + 1 SD = 9 286 euro outliers PCI w/o myocardial infarction w cc

12. Treatment cost vs. surplus/deficit lower limit 1 500 € upper limit 4 500 € Mean cost = billing price 3 000 € NordDRG-group cost limits: mean + 2SD total cost/€ Influence on surplus/ deficit surplus deficit no influence = ”normal process” = outlier billed using the billing price billed using the intermediate cost sum Intermediate products vs average process little some more much more average Jorma Lauharanta

13. Productivity measurement

14. Determination of the DRG cost weight Mean cost of the DRG group DRG cost weight = Mean cost of all DRG groups

15. Methodology 1. Production volume DRG weight sum = “DRG points” • - sum ofDRG weight x number of cases for all DRG groups • -same definition for outpatient and inpatient care • - clinical unit employing “short therapy” instead of an • inpatient/classic method receives the same cost weight as • from the classic method • (when number of cases in a NordDRG-O group is increased) • 2. Productivity measures a) Overall productivity  DRG productivity index - calculated as total costs/DRG point sum = “DRG point cost” b) Labour productivity  DRG labour productivity index - calculated as DRG point sum/FTE’s* (person-years) * FTE = Full Time Equivalent (labour input calculated as ”person years” as if all labour input was produced by full time employees) Method decribed in Finn Med J 47/2009,4055-4061

16. Increase in labour productivity 2009 vs 2008 Increase means improved productivity

17. Overall productivity (DRG point cost) change 2009 vs 2008 (deflated*) *Deflated by 1,6 per cent (change in hospital cost index) Descending figure = improved productivity

18. Treatment cost vs. productivity lower limit 1 500 € upper limit 4 500 € Mean cost 3 000 € NordDRG-group cost limits: mean + 2SD total cost/€ Influence on productivity increasing slightly decreasing strongly decreasing = ”normal process” gives one DRG weight = outlier gives one DRG weight! Intermediate products vs average process little some more much more average Jorma Lauharanta

19. Improvement of productivity 2000 - 2009 Jorma Lauharanta

20. Overall productivity 1-3 /2010 vs 2009 (notdeflated) Descending figure = improved productivity

21. DRG point cost in various clinic groups/ Dpt of Medicine 1-4/ 2010 vs 2009 (not deflated) Ward episodes: Descending figure = improved productivity

22. DRG point cost in various clinics / Inflammation clinic group 1-4/ 2010 vs 2009 (not deflated) Ward episodes: Descending figure = improved productivity

23. DRG point cost per major products / Dermatology clinic 1-4/ 2010 vs 2009 (not deflated)

24. Conclusive remarks

25. Benefits from the present productivity measurement system • Support to productivity improvement • -> Productivity (both labour and overall productivity) has • shown an improving trend since starting its measurement • -> Clinicians’ interest in productivity and process management • issues increased • -> Long-term productivity improvement programme created • Using the present system • -> Impact of various arrangements and interventions on • productivity can be monitored without a delay • -> successive years can more reliably compared despite a • continous shift towards ambulatory treatments

26. Features of a well-managed clinic • proper clinical coding • clinical protocols in active use • monitoring objects: • ->quality indicators (treatment outcomes, patient • satisfaction, complications, readmissions etc.) • -> productivity indicators -> process control/ improvement • -> staff satisfaction • optimization of resource utilization: • ->in-patient care, intermediate products and control visits