Health IT & Informatics in the Accountable Care Era

1. Health IT & Informatics in the Accountable Care Era James M Crawford, MD, PhD jcrawford1@nshs.edu

2. Notice of Faculty Disclosure In accordance with ACCME guidelines, any individual in a position to influence and/or control the content of this ASCP CME activity has disclosed all relevant financial relationships within the past 12 months with commercial interests that provide products and/or services related to the content of this CME activity. The individual below has disclosed the following financial relationship(s) with commercial interest(s): James M Crawford, MD, PhD: Vice Chair, Managing Committee Biomedical Research Alliance of New York (BRANY) – a clinical trials CRO no impact on the content of this CME activity

3. Anatomic Pathology: Articles of Faith We provide “Patient Centered Care”. We are indispensable for Patient Care.

7. Current Assumption Declining payments for Laboratory Services Inexorable increases in expense

8. Or is it? Costs of Laboratory Testing shifted to Beneficiaries = Profit (for whom? Declining Payer reimbursal to Labs Volume-based cost reductions: Large Labs only

9. Rebalancing “Shared Risk” for valuation of lab testing = Margin Efficient costing of laboratory services Utilization Interpretation Care Coordination ? Anatomic Pathology ?

10. Anatomic Pathology: Threats • We are soon to change from “source of revenue” to “medical loss ratio”. • We will be viewed as “over-utilization”. • We can be outsourced to the lowest bidder.

11. Anatomic Pathology: The Challenge • Can Anatomic Pathology document its “value” in the Accountable Care Era? • Can Academic Pathology demonstrate that it is the Provider-of-Choice? • By what means? • Cost-per-test • Reduced utilization • Intelligent use of Advanced/Molecular Diagnostics • Better Health IT connectivity and Reporting • Clinical Informatics and Clinical Decision Support • Better cost outcomes for stakeholders • Better healthcare outcomes for the population

12. Anatomic Pathology: The Challenge • Can Anatomic Pathology document its “value” in the Accountable Care Era? • Can Academic Pathology demonstrate that it is the Provider-of-Choice? • By what means? • Cost-per-test • Reduced utilization • Intelligent use of Advanced/Molecular Diagnostics • Better Health IT connectivity and Reporting • Clinical Informatics and Clinical Decision Support • Better cost outcomes for stakeholders • Better healthcare outcomes for the population Intellectual Fulfillment

13. Anatomic Pathology: DATA • What data should Anatomic Pathologists bring forward? To Whom? • What leadership should Academic Anatomic Pathology (ADASP) provide?

14. Anatomic Pathology: Health IT • Requisitions: • Indications, Clinical Hx, Clinical images, Coding • Logistics, Tracking, Status reports, Troubleshooting • Reports: • Formatting, Integration, Digital Imaging, Molecular • Delivery to Clients: Ordering Physician, Other Physicians • Effective up-loading to EHRs, Displays, Structured Data • Client Service tracking systems, response time • Telepathology • Digital Image Streaming • Digital Slide Scanning • Digital Image Analysis • In Vivo Microscopy

15. Anatomic Pathology: Informatics • Quality Reporting (manage on the basis of your data!) • Turn-around Time • Frozen Section Discrepancies • Consult case concordance • Benchmarks against national standards (viz. Cytopathology) • Client Service metrics • Population Health • Screening • Population Diagnostics (for every client) • Follow-up (e.g., Pap-test → Biopsy) • Genomics: • Molecular Imaging • Advanced Molecular Diagnostics

16. Anatomic Pathology: Business Informatics Can you justify your AP services? Cost Accuracy Client Satisfaction Patient Outcomes

17. The Patient’s Voice Quality “Is your testing better?” Service “Are you attentive to my needs?” Price “Am I paying the correct amount?” (premium dollar, co-pay) VALUE

18. The Changing Healthcare Delivery Landscape

19. The Changing Healthcare Delivery Landscape  ?   ?  ? Whither goeth Anatomic Pathology?

20. Your “Value” as a Laboratory Competitive Cost Against the largest national labs Safety and Quality The highest standards Service Delivery To Patients To Healthcare Providers Data Delivery To the Electronic Health Record To Providers (? Mobile Apps ?) To Patients (Patient Portals) Data AnalyticsFinancial benefit to the Enterprise Managed Care Contracting Hospital Expense Management Healthcare Delivery Patient Outcomes

21. The Costs of Healthcare: 2010 Total $2.5 T Hospital care $661 B ($44B Hospital Lab) Physicians $320 B Drugs $235 B Dentists $ 94 B Outpatient Care Centers $ 43 B Physician Imaging $ 38 B Outpatient Hospital Imaging $ 25 B Medical and Diagnostic Labs $ 18 B (“In Vitro Dx”) Dental Labs $ 4 B Behavioral Health $ 2 B Research $ 44 B

22. National Laboratory Market = $62B* Quest 12% LabCorp 8% NSLIJ Labs 62% $302M; 0.5% 10% Independent & Physician Office Labs Hospital Labs *Laboratory Industry Outlook 2011, G-2 Report

23. Managed Care Opening Gambit “Exclusive contract with national lab” Clawback Negotiating back to a “Carve-In”

24. Managed Care Opening Gambit “Exclusive contract with national lab” Clawback Negotiating back to a “Carve-In” How? Financial Performance Contribution to Health System Costs Hospital savings Cost-per-Test Client Service Patient Experience Physician Satisfaction Support of ACO Coordinated Care Patient Outcomes Overall cost of Healthcare

25. 2012: Quotable Quotes “I want you to be aggressively entrepreneurial.” Jan 2012* “I do not want you to be averse to risk.” Jun 2012* “You can’t cut your way to greatness.” Jan 2012** (Noting that our NSLIJ Laboratories have been evaluated for “monetization” in both 2008 and 2011.) *CEO, **COO, NSLIJ Health System retreats

26. ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Reference laboratories Network of SNFs ● Hospitals (26% of market) 300+ practice locations

27. NSLIJ: The Road to Success

28. NSLIJ Labs: The Car-in-Front NSLIJ Labs

29. Centralized Laboratory Network Current (CLN) Outreach Hospital Lab RRL Forest Hills Clinical Trials BARC Southside Huntington Plainview SIUH North SIUH South Syosset Core Lab Staten Island Lab NJ, Brklyn, SI Physician’s Offices LHH Nursing Homes NSUH LIJ Non-System Hospital Reference Testing Glen Cove Franklin Physician’s Offices Nursing Homes

30. NSLIJ Pathology and Laboratory Medicine Clinical Laboratory Tests/year: 2012 25 North Shore-LIJ 20 SIUH LX 15 Comm Mayo Clinic Tests per year (millions) Henry Ford The Cleveland Clinic 10 Core-NS-LIJ 5 0

31. NSLIJ Core Laboratories Net Revenue ($M) Operating Revenue ($M) 2008 2010 2011 2009 2012 2008 2010 2012 2009 2011 2012 Margin: Actual $13.58 M Budget $11.97 M

32. Cost-per-Test • Salaries and Benefits • Reagents • Rent and Utilities • Repairs and Maintenance • Depreciation • Other

33. Cost-per-Test • Salaries and Benefits • Reagents • Rent and Utilities • Repairs and Maintenance • Depreciation • Other • VOLUME → Productivity → Efficiency

34. Delivering Cost “Value” Core Lab: Volumes (M) Core Lab: Cost-per-Test ($) Increasing complexity 2009 2010 2011 2009 2010 2011 2012 2012

35. NSLIJ Laboratory Service Line: Cost Management Example: Blood Costs per site Total $ (millions) $ (millions) 2008 2011 2010 2009 2012

36. Laboratory Costs ($$) per Adjusted Discharge 2012 How much is AP “Technical”?

37. Laboratory Costs ($$) per Adjusted Discharge 2012

38. NSUH Lab Costs ($$) per Adjusted Discharge “stacked” “exploded” 2012 vs. 2009 2012 vs. 2009 22% decrease 7% decrease 54% decrease 12% increase $ per Adjusted Discharge 2009 2010 2011 2012 2010 2011 2012 2009

39. North Shore University Hospital Anatomic Pathology: Billing Delays # cases held in Medical Records Delayed Charges ($) $4M $3M $2M $1M 0 Apr Apr Mar Mar May Jun Jul May Jun Jul Jan 2009 Jan 2009 Oct 2008 Oct 2008

40. Helping NSUH revenue cycle Delayed Charges at Discharge Owing to late Surg Path reporting $ (millions) 90% decrease 2009 1st Q 2010 2011 2012

41. In press Consolidation of the North Shore-LIJ Anatomic Pathology Services: The Challenge of Sub-specialization, Operations, Quality Management, Staffing and Education Diane E. Groppi, MTASCP, Claudine E. Alexis, MBA, MTASCP, Chiara F. Sugrue, MS, MBA, MTASCP, Cynthia C. Bevis, MS, MBA, JD, MTASCP, Tawfiqul A. Bhuiya, MD, James M Crawford, MD, PhD

42. Integrated Anatomic Pathology Services (wRVU) AP Growth 26% 0% 22% 43% 338% 19% Outreach (year-to-year) TC = Revenue 39% AP Outreach (% of total) 34% 8% 10% TC = Expense NSUH + LIJMC NSUH + LIJMC NSUH + LIJMC NSUH + LIJMC AP Consolidation Feb 2011

43. NSUH + LIJMC Anatomic Pathology Services 134,381 wRVU 131,183 wRVU Improved IHx TAT, Reduced utilization 22% 32% % billable tests 62% 52% 2009 2012

44. NSLIJ Pathology and Laboratory Medicine Surgical Pathology Cases/year: 2012 Mount Sinai Medical Center – New York Mayo Clinic The Ohio State University The Cleveland Clinic University of Pittsburgh University of Texas-Houston Thousands NSUH-LIJMC

45. Integrated Anatomic Pathology Services wRVU / cFTE: all AP services NS/LIJ Integration + Subspecialization 27% Year-to-year 21% 2% 7,340 5,801 4,795 4,685 NE Academic Pathology Depts (minus Neuropath, Cytopath) UHC-AAMC Benchmark 2012

46. Integrated Anatomic Pathology Services 48 Hour TAT: Outreach Biopsies Abandoned Call Rate 2011 2012 Total Annual Calls TAT (%) 4.1% 1.8% GI Gyn GU Derm Breast 2011 2012

47. What we have not done • Consistently get our reports to the right physician • Make better Integrated and Structured Reports • Demonstrate that we are performing the “right” number • of Anatomic Pathology procedures • Determine the downstream cost-efficacy of our diagnostics • Report on “Population Metrics” to our Clients • Demonstrate that our % of the “medical loss ratio” • contributes meaningfully to Population Outcomes