Complexity, Reliability and Their Roles in

Healthcare Delivery Today

Peter Fine

President and CEO

Banner Health

Discussion Agenda

• Challenges and Opportunities For Healthcare Redesign

• Evolution of Health Care Delivery in Modern Era

• Evolution of Financing Health Care in US

• Banner’s Organizational Design in Response

• Some Clinical Improvement Results

A Summary:

Challenges and Opportunities

• Challenges

– Financial – “The belief in waste”

– Consumer – “Help me navigate” and “It’s my money now”

– New Complexities – “Knowing what to do is no longer enough” • The new role for the science of reliability

– The Anchor of our Past

– The Threat to the Professional • “Doctored: The Disillusionment of an American Physician” - Sandeep Jauhar

• Opportunities

– The Force of the Market

– Disruptive Competition

– A New Emphasis on Clinical Knowledge and “Managing Health”

Three Phases of Clinical Delivery

in the Modern Era*

1. Understanding and Classifying Disease

2. Defining Treatments

3. Designing Care Delivery

* David Cutler, Harvard Health Economist

I. “Classifying Disease”

1900

First issue of the “International

Classification of Diseases”

• “ICD-1”

• Causes of death (191)

Residential Medical Office, Otego, NY

1900

Advent of truly effective therapies:

• Vaccines for childhood

illnesses including polio

• Significant use of penicillin

• New drugs for glaucoma,

arthritis

• First organ transplant

II. “Defining Treatments”

1950

Colorado physician, Life Magazine, 1948

III. “Designing Care Delivery”

2000

A Response to:

– - Q:

– - R

– - S

– - T

III. “Designing Care Delivery”

2000

A Response to:

– - Q: Quality (and Reliability), the Boeing Story

– - R

– - S

– - T

“Reliability”

Isn’t 99% accuracy pretty good?

“If we had to live with 99.9% (10-3) , we would have:

• 2 unsafe plane landings per day at O’Hare

• 16,000 pieces of mail lost every hour

• 32,000 bank checks deducted from the wrong account every hour”

W.E. Deming

JAMA Vol 272 (23), 21 Dec. 1994, 1851-57

The “Human” Role

• What we do well:

– Judgment

– Prioritization

– Empathy

• What we do not so well:

– Vigilance

– Overcoming biases/habits/confidence mismatches

– Simultaneous multiples

Is knowledge sufficient?

“Fallibility is part of the human condition”

“We can’t change the human condition”

“We can change the conditions under which people work”

James Reason, author of “Human Error”

Strategies used to improve reliability in health care: – System Design:

• Automation, Decision support

• Adoption of evidence/consensus based practices

• Consistent processes, “teams” of care

• Address human factors with Bundling, Redundant design

– A Culture that encourages “Making safe choices”

III. “Designing Care Delivery”

2000

A Response to:

– - Q: Quality (and Reliability), the Boeing Story

– - R: Retail (New Expectations)

– - S: Safety (The Hidden Incidents)

– - T: Transforming business and service models

Three “Phases” of

Financing Healthcare

1960’s – 70’s: “Insured Care”

• Growth of Commercial Insurance • Medicare 1965 • The notion of “cost plus” and “reimbursement” • Cost Curve:

– % GDP in 1960: 5.3% – % GDP in 1970: 7.2%

1980’s – 90’s: “Managed Care”

• National Insurance Companies • HMO Legislation 1974 • Blue Cross and Blue Shield Merger 1982 • Product Innovation: HMO, PPO, POS • Case Rate, Diagnosis Related Group Payments • Cost Curve:

– % GDP in 1980: 9.1% – % GDP in 1990: 12.2%

2000’s - : “Accountable Care”

• FFS P4P, Bundling, Provider Risk, Accountable Care Org’s • Outcome based payment penalties • Growing concerns around clinical issues: patient safety,

reliability, geographic variation • Cost Curve:

– % GDP in 2000: 13.8% – % GDP in 2010: 16.4%

“Sales” “Engineering” “Manufacturing”

Corporate Support Services

17

Integrated Accountable Care

Delivery

System

Care Mgmt/Design Banner

Health Network

18

“Sales” “Engineering” “Manufacturing”

System Operations Team

Integrated

Delivery Team

Clinical Product

Design Team

Strategic

Growth Team

Inte

gra

ted A

ccounta

ble

Care

Ente

rpri

se

Banner Health Approach

Organizational Structures which:

• Honor the contributions of clinician experts

• Leverage the “Operating Company Model”

• Take advantage of the Board which is “on-board”

• Recruit deep physician talent for leadership

• Train clinicians in leading change

• Encourage the multi-disciplinary approach

• Engage engineering expertise

• Deploy technology to simplify care

“Engineering” New Models

• Research Practices

• Reach Consensus on requirements

Define

• Describe reliable workflow and roles

• Develop tools

Design • Communicate

and train

• Address issues

• Monitor

Implement

Clinical Consensus Groups

CRITICAL

CARE

Nidhi Nikhanj

Gary Foster

WOMENS

HEALTH

Michael Urig

Ellen Anthony

CV SURGERY

Michael

Maxwell

Marianne

LaFleur

PEDIATRICS

Bill Schneider

Sandra Marken

BEHAVIORAL

HEALTH

Gagan Singh

Nancy Sylvester

PHARMACY &

THERA-

PEUTICS

Joe Lozon

Nathan

Spence

CARE MANAGEMENT COUNCIL

ED

David Cohen

Dan Lingle

CARDIOLOGY

Paul Hurst

Dana Lauer

ANESTHESIA

Josh

Bloomstone

Kelly Kiefer

HOSPITAL

MEDICINE

Cheryl O’Malley

Terri Paulus

NEURO-

SCIENCES

Norm Wang

Al Wildman

MEDICAL

IMAGING

Threasa Frouge

Erica Dorward

PRIMARY

CARE

Mary Ellen

Dirlam

Heidi Costello

INFECTIOUS

DISEASE

Edwin Yu

Joan Ivaska

ORTHO

David

Jacofsky

Young An

NEPHROLOGY

Dharminder

Marwah

Debbie Kohm

ONCOLOGY

Daniel

Chamberlain

Kathy Altergott

LONG TERM

CARE

Natalya

Faynboym

Kelly Johnson

SURGERY

Jon King

Nancy

Adamson

PULMONARY

Rajeev Saggar

Chuck Ramirez

NICU/Newborn

Greg Martin

Kathleen

Walker

PALLIATIVE

CARE

M Joseph

Kristine

Salmon

http://intranet.visicu.com/ClientServices/VISICU Picture Library/eHospital and 2 way video Pictures/2Way Video with Nurse and patient.jpg

Implementation Science *

4 Groups of Variables which Influence Adoption

1. The External Environment (i.e. Payment changes)

2. Organizational Structure (i.e. an IDS)

3. The Character of the Change (i.e. Power of the Evidence)

4. The Processes Used (i.e. Design, Decision Making, Leader

accountabilities, etc.)

Fisher ES, Shortell SM, Savitz LA. Implementation Science – A Potential Catalyst for

Delivery System Reform. JAMA. 2016;315(4): 339-340.

Some Improvement

Results

0

100

200

300

400

500

600

700

800

900Q

1 2

010

Q2 2

010

Q3 2

010

Q4 2

010

Q1 2

011

Q2

20

11

Q3 2

011

Q4 2

011

Q1 2

012

Q2 2

012

Q3 2

012

Q4 2

012

Q1 2

013

Q2 2

013

Q3 2

013

Q4 2

013

Q1 2

014

Q2 2

014

Q3 2

014

Q4 2

014

Q1 2

015

Q2 2

015

Q3 2

015

Q4 2

015

--OB Clinical Practice

adopted on 11/18/2010

--$930K in Savings annually

Business Intelligence, Accessed 4/22/2015

Data: Women’s Health Data Cube

Adhesion Barrier in OB

Josh Noble (CPA), 04/04/2016

Data: Quality Advisor, TSI

0%

10%

20%

30%

40%

50%

60%

70%

80%1

Q 2

00

8

2Q

20

08

3Q

20

08

4Q

20

08

1Q

20

09

2Q

20

09

3Q

20

09

4Q

20

09

1Q

20

10

2Q

20

10

3Q

20

10

4Q

20

10

1Q

20

11

2Q

20

11

3Q

20

11

4Q

20

11

1Q

20

12

2Q

20

12

3Q

20

12

4Q

20

12

1Q

2013

2Q

20

13

3Q

20

13

4Q

20

13

1Q

20

14

2Q

2014

3Q

20

14

4Q

20

14

1Q

20

15

2Q

20

15

% CT Scans % Ultrasounds

% of Peds Appendicitis Patients Who Received an Abdominal/Pelvic CT Scan or Ultrasound

63.6%

39.9%

7.4%

40.8%

9.6%

14.8% 15.5%

68.9%

54.1%

47.3% 51.0%

36.5% 34.4%

43.8%

34.9%

53.0%

2008 - 2015 CT Scan vs Ultrasound Use

74%

68%

71% 69%

75% 74%

71%

62%

72%

68%

65%

60%

48%

50%

42%

37%

51%

44%

49% 49% 48% 48%

44%

50%

54%

44%

52%

41%

30%

35%

40%

45%

50%

55%

60%

65%

70%

75%

80%Q

1 2

00

9

Q2

20

09

Q3

20

09

Q4

20

09

Q1

20

10

Q2

20

10

Q3

20

10

Q4

20

10

Q1

20

11

Q2

20

11

Q3

20

11

Q4

20

11

Q1

20

12

Q2

20

12

Q3

20

12

Q4

20

12

Q1

20

13

Q2

20

13

Q3

20

13

Q4

20

13

Q4

20

14

Q2

20

14

Q3

20

14

Q4

20

14

Q1

20

15

Q2

20

15

Q3

20

15

Q4

20

15

Peds Asthma Inpatient Chest X-Ray

Josh Noble (CPA), 3/4/2016

Data: Quality Advisor, TSI

Reduce Variation in Blood Utilization

Orthopedic: Hip/Knee

16.6%

12.5%

8.4% 7.8%

7.8% 8.0%

6.9% 6.7%

3.2% 0.9%

1.6% 0.60% 0.60%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

1Q

20

13

2Q

20

13

3Q

20

13

4Q

20

13

1Q

20

14

2Q

20

14

3Q

20

14

4Q

20

14

1Q

20

15

2Q

20

15

3Q

20

15

4Q

20

15

1Q

20

16

Clinical Performance Analytics, Accessed 05/17/2016

Mature Initiatives Scorecard

Central Line Associated Blood Stream Infections (CLABSI)

2.35

1.78

1.63

2.09

1.19

1.86

1.52

1.13

0.86

0.66

1.10

0.60

1.35

0.93

0.19

1.00

0.88

0.94

0.93

0.95 0.95

0.41

0.61

0.51 0.51

0.72

1.46

0.84

0.0

0.5

1.0

1.5

2.0

2.5

1Q

,20

09

2Q

,20

09

3Q

,20

09

4Q

,20

09

1Q

,20

10

2Q

,20

10

3Q

,20

10

4Q

,20

10

1Q

,20

11

2Q

,20

11

3Q

,20

11

4Q

,20

11

1Q

,20

12

2Q

,20

12

3Q

,20

12

4Q

,20

12

1Q

,20

13

2Q

,20

13

3Q

,20

13

4Q

,20

13

1Q

,20

14

2Q

,20

14

3Q

,20

14

4Q

,20

14

1Q

, 20

15

2Q

, 20

15

3Q

,20

15

4Q

,20

15

ICU Central Line Infections per 1,000

Source: Acute Care Board Report, 5/17/2016

Early Elective Deliveries

21.8%

13.5%

5.2% 5.5%

2.8% 3.1%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2010 2011 2012 2013 2014 2015

Banner Health System Leapfrog Data: Elective Deliveries < 39 weeks

System Leapfrog Target

Clinical Performance Analytics, Accessed 11/10/2015

Leapfrog Data

76% 77% 77%

79%

82%

84% 85%

87% 87% 86%

88% 88% 89%

89% 88%

89% 89%

65%

70%

75%

80%

85%

90%

95%

4Q

20

11

1Q

20

12

2Q

2012

3Q

20

12

4Q

20

12

1Q

2013

2Q

20

13

3Q

20

13

4Q

20

13

1Q

20

14

2Q

20

14

3Q

20

14

4Q

20

14

1Q

20

15

2Q

20

15

3Q

20

15

4Q

20

15

Intensive Care Patients

Research

indicates >60%

as positive

Clinical Practice:

Sepsis, Delirium

Identification,

Prevention and

Treatment

Clinical Performance Analytics, Accessed 01/15/2016

Critical Care Data Cube

Delirium and Coma Free Days

81.3 80.5

79.4

76.3

65.4 61.7

57.5

62.5

59.8 60.6

53.6

62.2 61.3 60.8 58.1 58.9 58.4

55.9

0

10

20

30

40

50

60

70

80

903Q

2011

4Q

2011

1Q

2012

2Q

2012

3Q

2012

4Q

2012

1Q

2013

2Q

2013

3Q

2013

4Q

2013

1Q

20

14

2Q

2014

3Q

2014

4Q

2014

1Q

2015

2Q

2015

3Q

2015

4Q

2015

Intensive Care Patients

> 20 hours

Improvement

Clinical Practice:

Sepsis, Delirium

Identification, Prevention

and Treatment

Clinical Cost

Avoidance of

$22 Million

Clinical Performance Analytics, Accessed 01/06/2016

Critical Care Data Cube

Length of Stay in Hours at ICU Level of Care

0.87

0.81

0.96

0.88 0.85 0.85

0.76

0.62 0.64

0.6 0.59

0.67 0.66 0.69

0.62 0.63 0.65

0.74

0.65 0.67

0.73 0.71

0.76

0.67

0

0.2

0.4

0.6

0.8

1

4Q

2009

1Q

2010

2Q

2010

3Q

2010

4Q

2010

1Q

2011

2Q

2011

3Q

2011

4Q

2011

1Q

2012

2Q

2012

3Q

2012

4Q

2012

1Q

2013

2Q

2013

3Q

20

13

4Q

2013

1Q

2014

2Q

2014

3Q

2014

4Q

2014

1Q

2015

2Q

2015

3Q

2015

Mortality Observed/Expected

All ICU Acute Care Patients

Clinical Practice:

Severe Sepsis

Delirium Intervention

Mortality outcomes are

>40% better than

predicted

Clinical Performance Analytics, Accessed 05/19/2016

Philips eSearch data

1.0 = Performance as Expected

Skilled Nursing Days Reduction Per 1000 Members

55

60

65

70

75

80

851

/1/2

01

5

2/1

/20

15

3/1

/20

15

4/1

/20

15

5/1

/20

15

6/1

/20

15

7/1

/20

15

8/1

/20

15

9/1

/20

15

10

/1/2

015

11

/1/2

015

12

/1/2

015

1/1

/20

16

Clinical Performance Analytics,

BHN Datamart : Michael Parris

BHN Inpatient Days Reduction Per 1000 Members

175

195

215

235

255

275

295

1/1

/20

15

2/1

/20

15

3/1

/20

15

4/1

/20

15

5/1

/20

15

6/1

/20

15

7/1

/20

15

8/1

/20

15

9/1

/20

15

10

/1/2

01

5

11

/1/2

01

5

12

/1/2

01

5

1/1

/20

16

BCBS AZ ADVANTAGE PIONEER ACO UNITED M/A

Pioneer ACO Quality Performance

• 1st in cost savings total in the country (!) at $29M,

• 3rd in the country in savings per beneficiary ($550)

• 2015 Performance is Projected

• Note: Our membership is one of the largest in US (>52k) and our physician network is the 3rd largest

62.2%

81.2%

87.6% 89.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015*

Overall Quality Score – Maximum 100 per CMS

MRSA Bacteremia Rate Reduction with Bathing Redesign

Infection Prevention

5/10/2016

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14201

4M

01

201

4M

02

20

14

M0

3

201

4M

04

201

4M

05

201

4M

06

201

4M

07

201

4M

08

201

4M

09

201

4M

10

201

4M

11

201

4M

12

201

5M

01

201

5M

02

201

5M

03

20

15

M0

4

201

5M

05

201

5M

06

201

5M

07

201

5M

08

201

5M

09

201

5M

10

201

5M

11

201

5M

12

Rate

per

1000 p

atient

days

MRSA Bacteremia Mean Target

Daily CHG

bathing in

ICUs

Theresa Lake, CPA, 8/24/2015

Cerner, TSI

0.0

20.0

40.0

60.0

80.0

100.0

120.02

Q 2

01

1

3Q

20

11

4Q

20

11

1Q

20

12

2Q

20

12

3Q

20

12

4Q

20

12

1Q

20

13

2Q

20

13

3Q

20

13

4Q

20

13

1Q

20

14

2Q

20

14

3Q

20

14

4Q

20

14

1Q

20

15

2Q

20

15

3Q

20

15

4Q

20

15

1Q

20

16

2Q

20

16

Primary Stroke Minutes to Intravenous Thrombolytic Therapy Times - Median

30%

40%

50%

60%

70%

80%

90%

100%

Jul-

11

Au

g-1

1

Sep

-11

Oct

-11

No

v-1

1

Dec

-11

Jan

-12

Feb

-12

Mar

-12

Ap

r-1

2

May

-12

Jun

-12

Jul-

12

Au

g-1

2

Sep

-12

Oct

-12

No

v-1

2

Dec

-12

Jan

-13

Feb

-13

Mar

-13

Ap

r-1

3

May

-13

Jun

-13

Jul-

13

Au

g-1

3

Sep

-13

Oct

-13

No

v-1

3

Dec

-13

% o

f TK

A C

ase

s A

chie

ved

Total Knee Arthroplasty Care Composite Catheter Avoidance and Day 0 Ambulation

Composite Average LCL UCLGuillermo Mendez, CPA, 8/24/2015

Cerner, MS4

Improvement

Composite Score 49.8%

30-Day Readmission 24.3%

Complications 18.5%

Length of Stay 7.5%