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Using RVU Costing Methodologyfor Bundled Payment PricingBoston Childrens Hospital

Enterprise Costing Workgroup MeetingApril 6, 2013

Diaa AlqusairiMark BisconeSarah BrooksGinger Wilson

Bundled Pricing at BCHFirst pediatric hospital to enter into an alternative quality contract with BCBS Massachusetts

Other public and private payors have approached BCH to negotiate bundled payments

Global payments will likely become the predominant method of payment in Massachusetts 2

2Results from TDABC PilotAdvantagesPotential to capture more detailed costsMandatory process mapping may help to identify areas for improvement

LimitationsSignificant initial internal investmentUncertain return on investment (ROI) Limited evidence of utility in large, complex environmentsLack of familiarity among payors and external stakeholdersTraining and time commitment of physician organization

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2014: not enough time to educate physicians about TDABC; this is also in addition to ICD-10 changes3Assessment of Current RVU Methodology

AdvantagesWidely accepted by CMS and other payorsAvailability of benchmark dataCurrently in place at hospital

LimitationsRequires routine updatesPerception that it doesnt adequately capture care complexityAdditional investment required for physician organization

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4 Workgroup Recommendations

Expand utilization of RVU costing methodology throughout the system over a 2 year period

Implement process improvement initiatives for high-cost and high-volume procedures

Define, measure, and monitor patient-centric outcomes

Reward providers for enhanced value 5

5Expand Utilization of RVU Across the SystemRecommendation #1Convene RVU review committeeDetermine review cycle Evaluate accuracy of RVU componentsTarget high cost and high volume proceduresInitial Rollout: Surgery and Emergency DepartmentsOther departments to followDevelop enterprise communication strategyIdentify executive sponsorRecruit physician championsProvide regularly scheduled town hall sessions

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Implement Process Improvement InitiativesRecommendation #2Shift low-intensive procedures to less-costly locations

Employ Standardized Clinical Assessment and Management Plans (SCAMPs)

Utilize Lean Six Sigma for high volume, high complexity proceduresEliminate non-value added steps in the processSpeed up cycle time and reduce wait time

Redesign service from the patients perspective

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Implement patient satisfaction/experience surveys(outpatients and step-down units)(goal reduce cost, improve outcome, increase quality.Such as lab, test, Optimizing flow through the hospital. (batching).Physician champions; data, regular hand holder, consistent feedback scheduleImplement LSS and related methodologies (process improvement) education for all employees.Create a culture of process improving.Empower every one to implement a process improvement.

7Monitor Patient-centric OutcomesRecommendation #3Enact standardized core outcomesPatient satisfaction/experience scoresCycle time reductionAvoidable complicationsError reductionLength of stay

Organize focus groups to define additional outcomes

Develop internal dashboard for metric reporting

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8Reward Providers for ValueRecommendation #4Incentivize providers to achieve core outcomesPatient satisfaction/experience surveys scoresCycle time reductionAvoidable complicationsError reductionLength of stay

Solicit input to determine provider-specific metrics

Include in annual review process

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9Operational Action PlanHigh Volume and High Cost AreasLow Volume and Low Cost AreasPhase 1Months 0-9Phase 2Months 6-18Phase 3Months 18+High Volume or High Cost Areas10

10Questions and DiscussionExpand utilization of RVU costing methodology across care cycle throughout the system over 2 year period

Implement process improvement initiatives for high-cost and high-volume procedures

Define, measure, and monitor patient-centric outcomes

Reward providers for enhanced value

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