Tucson’s experience shows that it might take a doctor to tackle physician-preference items
Looking to break the logjam on physician-preference items? Then you need to understand the data that physicians are seeking and the issues physicians are facing in their private practices, and how those issues relate to what’s happening in the hospital. That’s the advice of Patricia Tyson, vice president, clinical specialty services for VHA, who was called in last year to help Tucson Medical Center in Arizona on a much-needed cost-reduction initiative. Tyson made her remarks at the 47th Annual Conference and Exhibition of the Association for Healthcare Resource & Materials Management (AHRMM) in Tampa, Fla.
As a nurse in interventional and surgical cardiology, Tyson had learned that building relationships with physicians was the key to operational and clinical improvement. She put the lesson to work at Tucson, with the help of Chief Medical Officer Palmer Evans, M.D., and others at the facility.
Stop the bleeding
Despite tremendous patient growth, Tucson Medical, a sprawling, single-story medical center, was facing a dire situation in 2007. Costs were high, morale was low, and the facility was $11 million in the red. The board replaced the executive team, then asked Evans – the former vice president of quality – to return as senior vice president and chief medical officer. His job was to help Tucson Medical regain its footing. The facility, which was a founding member of VHA more than 30 years ago, then asked VHA to help address its financial and operational problems.
One of the first things the facility did to “stop the bleeding” was to enact a spending moratorium. That meant that for several months, from a supply chain point of view, Tucson Medical “ate out of the pantry,” that is, plucked supplies from inventory. And, with nine miles of hallways and plenty of hiding places, there was more than enough inventory to keep the facility going for a while.
Eating out of the pantry – and seeking some immediate pricing concessions – were necessary stopgaps, but by themselves they weren’t going to solve Tucson’s problem long-term. That’s where the relationship-building began. Tyson and Evans helped form Clinical Quality Value Analysis™ teams to address a variety of areas, including pharmacy services, surgical services, ancillary services, support services, cath lab/imaging, patient services, and wound and skin management. Not only were key stakeholders pulled in to participate on the teams, but so were the medical center’s executive officers. In fact, every team had an administrative sponsor. For example, the chief nursing officer was on the wound and skin team, the CEO was on a team addressing ancillary services, and Evans himself served on a couple of teams.
The CQVA teams were charged with looking at virtually everything in the facility – not just products, but operational and clinical processes – to see how care could be delivered more cost-effectively. There was essentially only one rule: “We knew we could never impact quality of care,” said Tyson.
At one point, Tucson had 230 ongoing initiatives, 178 of which were implemented as part of the cost reduction program. “Don’t take anything for granted insofar as savings,” advised Tyson. The ancillary services team, for example, had a target of $100,000 savings, and doubled it. “You think, ‘How can there be savings in laboratory slides?’” she said. But there are.
The teams took a hard look at supply utilization. For example, physicians were asked about their use of angioplasty balloons, while OR nurses were asked whether they actually used all the supplies in their custom packs. (They didn’t.) Operational and clinical processes were open to examination too. Surgery was asked, “Could patients be prepped in such a way as to result in savings and better care?” (They could.) “Does every cardiac surgery patient need a cell saver?” (No, less than 10 percent do.) “Does the cath lab need to put defib pads on every patient, just in case the patient arrests?” (No, but they need to be sure that defib pads are available in case a patient does arrest.)
As a physician, Evans had the credibility to work with the doctors – most of whom are independent – on some tough issues. One of his first visits was to the Tucson Orthopaedic Institute, a 35-physician orthopedic practice. “We knew our implant costs were out of control,” he said. “We were paying list price.” The orthopedists agreed to meet on a weekly basis to look at the problem and come up with solutions. “Over time, trust develops, and [the doctors] start sharing information with the administrative team.”
Evans contacted vendors and obtained consent to confidentially share TMC’s implant cost information with the doctors. When they saw the variability in pricing, most were willing to help, he said. “The physicians wanted the hospital to succeed; it was their community hospital.” In addition to implant prices, the team looked at ways to increase efficiencies in the OR. “They were very data-driven,” said Evans. “With physicians, if you provide the right data, they will respond.” But it must be accurate.
Evans asked the orthopedists to take a hard look at what they were using, with an eye toward maintaining consistent quality and clinical value. Then he approached vendors and told them that while Tucson did not intend to limit its selection of acceptable implants, it was going to dictate to all vendors how much it would pay for similar items, leaving vendors the choice of accepting that pricing or not.
As part of the pharmacy initiative, Tucson’s spine surgeons were asked about their use of thrombin, which exceeded that of comparable hospitals in the country. It turned out the surgeons were applying a thrombin/gelfoam mix over the spine after surgery to reduce bleeding, but there was no clinical evidence that the mix was effective in doing so. Working with Pharmacy and the medical staff, Tucson made some changes in its use of anti-infective agents, and switched from some IV-administered medications to lower-cost oral meds.
Tools that Tucson Medical used to enlist the support of its physicians were so-called “co-management agreements,” carefully crafted to reward the physician groups for achieving various targets for quality, efficiency and service line management, such as on-time starts in the OR, patient satisfaction and the use of antibiotics prior to surgery. (The agreements were negotiated over time and drawn up carefully with input from a consulting firm, law firm and valuation firm, to make sure Tucson wasn’t violating any Medicare, tax or other regulatory requirements.)
The results were dramatic, but not always easy to accomplish. “There’s an issue called vendor loyalty,” said Evans. In an effort to get the surgeons to change trocar vendors and realize some big dollar savings, for example, the CQVA team ran into some resistance on the part of surgeons who had developed loyalty to a very effective, service-oriented rep in the Tucson area. “I decided I wasn’t going to die on that hill,” said Evans, who decided to let the medical staff proceed at its own pace on trocars. (Even so, “we have pockets where we’re making inroads,” he added.)
The results of the efforts – in surgery, pharmacy and other clinical areas – were dramatic. Tucson exceeded its goal of reducing expenses by $9.5 million. In fact, it achieved a savings of $10 million in just one year, including $2 million in pharmacy, $2.3 million in surgical services, $1.4 million in spines/joints, $1.2 million in the cath lab, and $2.2 million in support services. The 15-month savings amounted to $16 million.