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The heart and science of medicine.
UVMHealth.org
Electronic Health Record Replacement Project
Green Mountain Care Board
November 6, 2017
Agenda
• Introductions and overview
– John R. Brumsted, MD, President and CEO, UVM Health Network, and CEO, UVM Medical Center
• Project Overview
– Adam Buckley, MD, MBA, Chief Information Officer, UVM Health Network
• Panel Discussion: How a Unified EHR will Impact Patient Care
– Betty Diette, Patient
– Kate Fitzpatrick, DNP, RN, NEA-BC, FAAN, Chief Nursing Officer, UVM Medical Center
– Anna Hankins, MD, Pediatric Primary Care (Barre), CVMC
– Fred Kniffin, MD, President, Porter Medical Center
– Wouter Rietsema, MD, VP, Chief Quality & Information Officer, CVPH
• Project Costs & Implementation
– Marc Stanislas, VP, Treasury & Finance, UVM Health Network
– Matt Abrams & John Waters, Cumberland Consulting Group
2
The University of Vermont Health Network
3
Number of physicians 1,219
Number of RNs 2,759
Staffed beds 936
Inpatient discharges 40,559
Patient visits 1,807,764
ED visits 171,989
OR cases 34,626
Lab visits 4,606,466
STATISTICS - ALL NETWORK MEMBERS (FY 2016)
UVMHealth.org
Project Overview
Project Description
• Replace existing, disparate and outdated HIT systems at four UVM Health Network hospitals with a unified EHR from Epic Systems
• Capital cost: $112.4 million
– $109.3 million capital expenditures
• Software, hardware, implementation, internal and external staffing, training, data conversion
– $3.1 million capitalized interest
5
What is an Electronic Health Record (EHR) and What
are We Proposing?
• EHR consists of all important patient information
- Health and clinical information, registration, billing, scheduling, and
insurance
• The UVM Health Network is proposing a unified EHR
– The project is to implement a connected system called Epic for four
network hospitals:
• University of Vermont Medical Center
• Central Vermont Medical Center
• Champlain Valley Physicians Hospital
• Porter Medical Center
6
Many UVMHN Systems are Outdated
and Need Replacement
• Each UVM Health Network hospital has different systems for medical, billing, and scheduling, some more than 20 years old
• Many of these systems have reached the end of their useful life and need replacement or updating
• The existing systems do not guarantee that all necessary information is available when and where it is needed
• Multiple systems with multiple log-ins and interfaces puts undue burden on patients and their families
• This hinders our ability to measure outcomes effectively and standardize care in order to improve the overall health of Vermonters and slow the growth of health care costs
7
Current State of EHR at UVMHN is Complex
and Disjointed for our Patients and Providers
STATE REGULATORY AUTHORITIES
MEDICAL GROUPS
AND OUTPATIENT
NURSING HOME AND
REHABILITATION
HOME HEALTH / AND SOCIAL WELFARE /
FAMILY SUPPORTPHARMACY AND
PRESCRIPTION
LABORATORY
AND DIAGNOSTIC
MEDICAL GROUPS
AND OUTPATIENT
HOSPITALS AND INPATIENT
EMERGENCY
RESPONSE /
TRANSPORT
8HOSPITALS AND INPATIENT
The Hodgepodge
Organization
Inpatient
Clinical
System
Inpatient
Financial
System
Ambulatory
Clinical
System
Ambulatory
Financial
System
Clinical Ancillary
Systems
UVM Medical Center Epic GE Epic GE Optum (OR)
Sunquest (lab)
GE (imaging)
CVMC Meditech Meditech eClinical
Works
eClinical
Works
Picis (ED)
Philips (imaging)
Merge (cardiology)
CVPH Soarian Soarian GE
Medent
Paper
Soarian
Medent
None
ORSOS (OR)
Sunquest (lab)
Siemens (imaging)
McKesson (cardiology)
Porter Meditech Meditech Meditech
LSS/MPM
Meditech
LSS/MPM
MedHost (ED)
Philips (imaging)
ECS (nursing home)
9
How will a Unified EHR Impact Patient Care?
• Betty Diette
– Patient
• Kate FitzPatrick, RN
– Chief Nursing Officer, UVM Medical Center
• Anna Hankins, MD
– Pediatrician, UVM Health Network – CVMC
• Fred Kniffin, MD
– President & CEO, UVM Health Network – Porter Medical Center
• Wouter Rietsema, MD
– Chief Quality & Information Officer, UVM Health Network – CVPH
10
UVMHealth.org
Project Costs & Implementation
Cost to Maintain, Update and Replace Existing
Systems Separately
• Done independently, it could cost up to $200 million for
the four hospitals to upgrade their own systems and
would lack the network connectivity
• It will cost $151 million over 6 years to move the four
network hospitals to a unified EHR system
12
Implementation Timeline
13
Project Safeguards
• We will draw from the UVM Medical Center’s successful Epic clinical installation 10 years ago
• We have conducted a review of Epic installs nationally to understand implementation challenges
• Rigorous internal and external safeguards
– Expert project management
– Specialized internal governance
– Robust public transparency and accountability
– Thorough training and testing before activation
– Adequate contingency
14
“Total Cost of Ownership”
• TCO model captures all costs and savings associated with an HIT project over a defined period of time
– “Best practice” for understanding true costs of a project
• TCO modeled for a six-year period (includes implementation and post-implementation period)
– $151.7 million net cost over six years (capital and operating combined)
15
Introduction to the TCO
• The UVMHN Total Cost of Ownership (TCO) for the Epic project was developed with input from each organization, Epic and Cumberland
• The TCO is comprised of several different cost categories which together make up the capital and operating expenses associated with the project over a six-year period
• The model’s intent is to include all incremental capital and operating costs associated with the transition to Epic
• The following slides provide an overview of what is included in each of the six cost categories
16
Overview of TCO – Capital Costs
17
Capital Cost Category What's Included? Methodology/Data Source 6 Year Total Cost
Epic Software Costs One-time licensing fees Epic pricing quote
14,361,500$
Epic Implementation and
Travel Costs
Epic's implementation services (fees and expenses) Epic pricing quote
15,241,619$
Required 3rd Party
Software
Database license for Caché operating environment Epic pricing quote
2,661,746$
UVMHN Internal Staffing Internal staff who will serve as PM's, Team Leads and Analysts Epic and Cumberland best practices tailored to UVMHN's project needs - 69
total resources over 40 months 11,800,641$
External Staffing Cumberland staff who will serve as PM's, Team Leads and
Analysts
Epic and Cumberland best practices tailored to UVMHN's project needs - 40
total resources over 40 months 36,385,100$
Epic and Network Related
Technology Costs
Network and infrastructure upgrades and additional hardware
and interfaces
UVMHN analysis based on Epic requirements
16,306,139$
Facilities, Communications
and Travel
Space for implementation and training, communications to
stakeholders and patients
Local estimates used for space planning. Stakeholder and patient engagement
estimates provided by Communications department 1,215,145$
Pre-Implementation -
External Staffing
Cumberland staff who will serve as work stream PM's during
pre-implementation
Cumberland best practices for pre-implementation work - 8 total resources
1,458,180$
Contingency 9.9% contingency to account for any unforeseeable capital
project costs
Industry standard for similar size and scope projects
9,824,746$
109,254,817$ Total
Overview of TCO – Operating Costs
18
Operating Cost
Category What's Included? Methodology/Data Source 6 Year Total Cost
Epic Software Costs Annual maintenance costs for new Epic modules Epic pricing quote
7,986,133$
Required 3rd Party
Software
Annual maintenance costs for Caché operating environment Epic pricing quote
2,632,375$
UVMHN Internal Staffing Internal staff for long-term support and training during
implementation
Epic and Cumberland best practices tailored to UVMHN's project needs - IS
staff for training and long-term support plus Super Users 26,808,920$
External Staffing Cumberland staff who will design training materials and train
end users
Epic and Cumberland best practices tailored to UVMHN's project needs - 23
total resources over 40 months 2,832,750$
Epic and Network Related
Technology Costs
Annual maintenance costs for technology UVMHN analysis based on Epic requirements
35,429,681$
Facilities, Communications
and Travel
Travel costs for Epic certification training, training hours for
clinical end users and maintenance of leased training facilities
Travel costs based on expected staff traveling to/from Verona, WI. Training
hours based on actual end user counts and estimated training requirements 2,391,543$
UVMHN Staffing Offsets Savings for employees currently working on legacy systems
that will be replaced by Epic
Actual counts of employees currently supporting legacy systems
(31,016,221)$
UVMHN Legacy System
Offsets
Savings in annual maintenance costs for legacy systems that
will be replaced by Epic
Based on line item annual maintenance costs for each system being replaced.
Savings were not applied until system is expected to be fully sunset (12,434,933)$
Contingency 10% contingency to account for any unforeseeable operating
project costs
Industry standard for similar size and scope projects
7,808,140$
42,438,387$ Total
Cost and Funds Flow
19
6-Year Summary of Epic Costs & Funds Flow
Total
University of Vermont
Health Network
(UVMHN)
University of Vermont
Medical Center
(UVMMC)
Central Vermont
Medical Center
(CVMC)
Porter
Medical Center
(Porter)
Champlain Valley
Physicians Hospital
(CVPH)
Total Capital Costs1 $109,254,817 $109,254,817 $0 $0 $0
Total Operating Costs2 $85,889,541 $85,889,541 $0 $0 $0
Subscription Fees3 $0 ($30,744,948) $9,403,958 $4,734,147 $16,606,843
Total System & Staffing
Offsets4 ($43,451,154) ($27,101,902) ($4,322,229) ($2,748,998) ($9,278,024)
Total Net Capital &
Operating Cost of Epic
Implementation
$151,693,203 $137,297,507 $5,081,729 $1,985,148 $7,328,819
Footnotes:
1 UVMMC as the licensee has all the capital costs. Amount shown does not include capitalized interest.
2 UVMMC as the Epic licensee will be allocated all operating costs.
3 The UVMHN hospitals reimburse UVMMC for their share of the operating costs.
4 Staffing & system offset savings generated from Epic implementation.
Financial Projections
• 10-year financial models built for UVMHN and UVMMC
– FY 2016 used as base year, FY 2017 based on budget (modified for known margin adjustment items)
– FY 2018 – FY 2025 projections
• Operating margin between 2.6% - 3.5%
• Staffing growth between 0.6% - 1.0%
• NPR growth between 3.4% – 3.5%
• Expense Savings of $75M by FY 2023
– Will refresh financial model and assumptions annually
• Assessed financial metrics to determine operational efficiencies necessary to maintain “A” rating
• Tested financial model and assumptions with Ponder & Co., a leading national health care financial advisor, for independent review
20
Deloitte Report
21
Summary
• This is a necessary and important update to EHR systems for patients
• Higher-quality, safer care for patients
• Greater collaboration and care coordination with our partners
• Industry standard for regulatory compliance
• Carefully planned and budgeted to not raise costs for patients
• Rigorous internal and external safeguards to mitigate and address risks
22