The Never Events and Pay for Performance.

1. The Never Events and Pay for Performance. Do These Initiatives Affect the Materials Manager? Presented by: Amanda Llewellyn, FACHE, FAHRMM

2. Healthcare: Startling Statistics • # of Healthcare Organizations Operating at a loss: • 53% of Hospitals & Health Organizations Nationally • Outpatient Volumes: +2.6%, Inpatient Volumes: +1.5% • Overall Margin -7.6% 1 • Healthcare Supply Spend Accounts for: • Over 30% of operating budget (supplies) • Over 45% of operating budget (complete supply chain) • Projections: 2011 / 2012 supply chain will eclipse labor spend2

3. More Startling Statistics….. • 40,000 instances of harm in US Healthcare System annually • 1 in 20 patients receive wrong medication • 3.5 million documented infections due to poor hand hygiene • 195,000 patients die from medical mistakes • 2005-2007 Medicare estimated $6.9B spent on avoidable errors and events

4. The Johns Hopkins Story • Josie King, 1999-2001 • “Josie’s death,” Sorrell told the crowd in Hurd Hall, “was the result of a combination of many errors, all of which were avoidable. You are the only ones who can solve this problem. The medical community must be open to the possibility that shortcomings do exist, and you must be prepared to make the necessary changes.” http://www.hopkinsmedicine.org/hmn/S04/feature1.cfm

5. Maryland State Safety Events

6. Top 15 Incidents Reported by Volume, Cumulative

7. Never Events- Defined • Never Events • 27 Events established by the National Quality Forum (NQF) • Surgical Events, • Product / Device Events • Patient Protection • Care Management • Environmental Events • Criminal Events

8. HAC – Hospital Acquired Conditions • Section 5001(c) of the Deficit Reduction Act (DRA) of 2005 required the Secretary of the Department of Health and Human Services to select at least 2 conditions by October 1, 2007 that are: • High cost, high volume or both; • Assigned to higher paying DRG when present as a secondary diagnosis; and • Could reasonably have been prevented through the application of evidence-based guidelines • Further required hospitals to begin reporting on claims for discharges, beginning October 1, 2007, whether the selected conditions were present on admission (POA). Deficit Reduction Act of 2005, Pub. L. No. 109-171, 120 Stat. 4 (Feb. 8, 2006)

9. Quality and Payment:Strategic Cost Savings • CMS position regarding payment: That any treatment/care and costs associated with these “Never Events” are not deemed to be “Medically Necessary” and as such, will not be reimbursed

10. Initial CMS HACs • Initial HACs selected in FY 2008 • Foreign Object Retained After Surgery (NQF Never Event) • Air Embolism (NQF Never Event) • Blood Incompatibility (NQF Never Event) • Stage III & IV Pressure Ulcers (NQF Never Event) • Falls and Trauma:  Fractures; Dislocations; Intracranial Injuries; Crushing Injuries; Burns; Electric Shock (NQF Never Events address falls, electric shock, and burns) • Catheter-Associated Urinary Tract Infection (UTI) • Vascular Catheter-Associated Infection • Surgical Site Infection-Mediastinitis after Coronary Artery Bypass Graft (CABG)

11. Current CMS HACs • Current HACs for FY 2009 • Surgical site infections following elective procedures • Legionnaires’ disease • Glycemic control • Iatrogenic pneumothorax • Delirium • Ventilator associated pneumonia (VAP) • Deep vein thrombosis (DVT)/Pulmonary Emoblism (PE) • Staphylococcus aureus septicemia • Clostridium difficile associated disease (CDAD) • Methicillin resistant staphylococcus aureus (MRSA) http://www.cms.hhs.gov/HospitalAcqCond/06_Hospital-Acquired_Conditions.asp#TopOfPage

12. Rationale? • To shift the burden of paying for medical errors from taxpayers and patients to the care provider arena in which the error occurred • To motivate hospitals/healthcare organizations to accelerate their efforts toward improving patient safety and preventing patient harm.

13. P4P = Safe + Effective + Quality Care Delivery (and documentation) • Current System: Volume Based • Do more, get more. • Vulnerable to external forces and negative reinforcement of poor delivery. • Changing System: Quality Based • Do better, get more. • Do worse, get less. • Challenged for resources and profitability

14. So What? • What is the risk? • Already losing revenue. • Is the organization at risk for additional RAC audits, HAC denials? • # and % of cases / patients • What can supply chain do? • Partner with providers. • Focus on total patient cost and revenue cycle rather than acquisition costs.

15. “The Genius Checklist” • 2003 Michigan Study • 3 mo HAI dropped 2.7 / 1000 to 0 • 1,500 lives saved in first 18 months • Estimated Savings $183M • Check list incorporated: • Full Drape • Chloraprep • Long Gown for Providers http://www.time.com/time/specials/2007/article/0,28804,1733748_1733754_1735344,00.html

16. Supply Chain: Where do we fit? • “Process is as important a resource as labor, supplies and money” • Technology & Equipment • Supplies & Devices • Strategic Partnership

17. Technology and Equipment Myth: Quality is expensive and high tech. • Cutting Edge Technology Advances: • Outcome Based Assessments • Process Realignment • Evaluation of Efficiencies & Quality ROI • Smart Technologies • Interfaces (the panacea)

18. Supplies & Devices Research, Research, Research • Engage Clinicians • Evidence Based Outcomes • Peer Review Processes • Data analysis • Evaluate the Revenue Cycle • % reimbursement & DRG • Documentation requirements • Best Value not Lowest Cost • Review entire system • Not all commodities are equal • Follow Up • Track Outcomes and actualized efficiencies

19. Strategic Partnership:Provider, Vendor and Me. • Provider: Deliver consistent high quality care. • Vendor: Provide innovative and reliable resources and solutions to health organizations. • Me: Provide safe, effective and quality resources, support and solutions to clinicians and patients. Result: Safe, high quality care delivered at the lowest total cost.

20. Amanda Llewellyn, FACHE, FAHRMM Asst Administrator Ambulatory Services and Clinical Operations The Johns Hopkins Health System allewel2@jhmi.edu