Whitepaper - Attitudes Toward Patient Harm And Hospital Finances

ATTITUDES TOWARD PATIENT HARM IN THE CONTEXT OF HOSPITAL FINANCES

JUNE 30, 2015

2 of 6© Pascal Metrics 2015

Patient Safety Leaders Believe Decreasing Harm Increases ProfitabilityIt is clear from our survey that those within the “patient safety” field understand the value their work can have on a hospital’s finances. When asked weather they were convinced that reducing patient harm has direct financial benefits for their organizations more than 75% of respondents strongly agreed, and no respondents disagreed with that statement (Fig 1). This response highlights that community members take seriously the impact they can have not just on patient wellbeing but on corporate performance as well. Despite research that may suggest the contrary2, they believe they can help both patients and the bottom line by improving the quality of care. What is not clear is whether participants feel this way based on reliable data or on more qualitative observations.

Professor Lucian Leape, one of the founding fathers of the modern patient safety movement, said in a 2010 speech that the patient safety movement has been a “great failure” partly because it is not always fully prioritized by hospital or system leadership1. Why is this the case? Why isn’t safety the first priority for hospital leadership?The answer may lie in the unclear relationship between safety and a hospital’s financial performance. Does a safer hospital make more money, or the opposite? Is there any relationship between harm and cost? Recent academic research has started to explore and answer these questions, but how are health systems responding, operationally?

To understand perceptions of the relationship between harm and cost, we conducted a targeted survey of patient safety leaders across the United States attending the National Patient Safety Foundation 2015 Congress. What we found was that while many believe reducing harm is good for business, they still struggle to obtain the necessary resources.

This short white paper discusses the survey findings, and also provides an overview of additional research that analyzes hospital financial data to understand the profitability impact of patient harm.

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FIG. 1 - I AM CONVINCED THAT REDUCING PATIENT HARM HAS DIRECT FINANCIAL BENEFITS FOR MY ORGANIZATION, SUCH AS REDUCED COST OR MORE REVENUE

1 Dr. Lucian Leape in Modern Healthcare magazine. April 13, 2010 at http://www.modernhealthcare.com/article/20100413/NEWS/3041399852 Eappen, S. Gawande, A. et al. Relationship Between Occurrence of Surgical Complications and Hospital Finances. JAMA. 2013;309(15):1599-1606.


Patient Safety Leaders Mostly Believe Their Executives Share Their ViewOur data shows general agreement but also some skepticism amongst patient safety leaders when it comes to alignment with executives and leadership. While most survey participants believe they see eye-to-eye with their leadership on the business value of safety, about a quarter of respondents were neutral or even negative, perhaps suggesting that hospital leadership has not articulated a position on whether or not reducing harm has a financial benefit (Fig 2).

The qualitative comments from survey participants seemed to suggest the same, with one respondent saying, for example, that “leadership does not have patient safety in their radar!!” Simply looking at the attendance demographics from the 2015 NPSF Congress - perhaps the foremost patient safety-focused conference in the U.S. - provides further evidence, less than 1% of the attendees came from the C-Suite.3

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FIG. 2 - MY ORGANIZATION’S LEADERSHIP IS CONVINCED THAT THERE IS FINANCIAL VALUE NOT JUST A MORAL IMPERATIVE TO REDUCING PATIENT HARM

Most Patient Safety Leaders Do Not Believe There is a Clear Plan Toward Reducing HarmWhile most survey participants believe their leadership agrees on the financial importance of reducing harm, less than half believe their leadership have a clear plan for how to reduce harm. More than one third of respondents actively disagree that their organization’s leadership has a clear plan of what to measure to achieve zero harm (Fig 3). When taken in context of the previous two questions, this may suggest that leaders are just beginning to understand the financial importance of safety and have not yet started to fully mobilize and resource a strategy for high-reliability in safety as a top priority. It may also suggest that while everyone agrees safety is both morally important and financially beneficial4 , what is less clear is the right way to track and improve safety.

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FIG. 3 - MY ORGANIZATION’S LEADERSHIP HAS A CLEAR PLAN OF WHAT MEASURES WE MUST BE TRACKING IN ORDER TO ACHIEVE ZERO PREVENTABLE ERRORS

3 Pascal Metrics analysis 4 Pascal Metrics white paper. Current Use of Technology in Automating Patient Harm Identification: A Survey of Patient Safety Leaders June 10, 2014


Most Patient Safety Leaders Do Not Have the Support They NeedWe find that, even though patient safety leaders and many of their executives believe safety leads to profitability, most patient safety leaders report not having the necessary support from their organization to improve safety. In fact, only a third of respondents said that they did in fact have all the necessary support (Fig 4).

Again, this finding may be reflective of the ambiguity surrounding the right plans and types of support to provide in order to reduce patient harm. More likely, however, this finding demonstrates that while the industry acknowledges the importance of patient safety, most organizations are not yet willing to do whatever is necessary to achieve it.

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FIG. 4 - MY ORGANIZATION PROVIDES ME AND MY TEAM WITH ALL THE NECESSARY SUPPORT, RESOURCES AND TOOLS TO ACHIEVE ZERO PREVENTABLE ERRORS

Patient Safety Initiatives Each Require a Business CaseClinical and moral arguments alone are insufficient for receiving resources, according to survey respondents. Only a quarter of our participants said they did not need a business case in order to receive additional resources for safety initiatives (Fig 5). For most participants, the moral argument must accompany a business case in order to receive investment.

The problem with this situation is that the clear and quantitative business case for safety improvement has been elusive. At best, it has not been identified, and at worst it has actually been disproved. But that’s changing. Researchers have begun investigating the cost and profit impacts of harm, and the business case for safety is finally emerging.

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FIG. 5 - WHEN I NEED ADDITIONAL RESOURCES FOR SAFETY, IT’S EASY TO GET THEM BY CITING A CLINICAL QUALITY ARGUMENT ALONE (IF IT’S THE RIGHT THING TO DO, MONEY CAN BE FOUND)


Building The Business Case That Health Care NeedsIn March 2015, the Journal of Patient Safety published research that demonstrated that adverse events have a negative impact on contribution margin, a measure of a hospital’s profitability.5,6 The research analyzed four years of data and more than 20,000 patients across Adventist Health System. Rather than contributing positively to margin as was previously believed to be the case, researchers found that harming a patient took, on average, more than $1,000 out of the hospital’s profit (Fig 6).

Over the four years of the program across this 40 hospital system, using a robust semi-automated trigger methodology developed with Pascal Metrics, researchers found $500 million of harm related cost by using this risk adjusted harm contribution number. Having measured the harm accurately and implemented a high reliability system with a number of improvement levers they were able to reduce the cost of harm by over $100 million during that period.

Adventist observed an all-cause harm rate similar to what other hospitals across the nation have found. Based on that rate, they extrapolated the cost of harm to all hospitals across the nation. What the researchers found was that the U.S. health care system currently wastes $63 billion that could be saved by improving safety (Fig 7). If there was no business case before, there appears to be one now.

First, there is a business case to measure harm using an advanced automated trigger based approach because the amount of cost opportunity such an approach finds is orders of magnitude greater than existing retrospective and sample based approaches. Second once the harm is found, targeted and specific improvement can be introduced to reduce each category in close to real-time. This is perhaps the most significant green-field quality improvement and cost reduction opportunity in healthcare and safety leaders can feel comfortable taking this story to system leadership.

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SEVERE HARMTEMPORARY HARM

ADDITIONAL CONTRIBUTION BEFORE RISK ADJUSTMENT

ACTUAL CONTRIBUTION, AFTER RISK ADJUSTMENT

FIG. 6 - IMPACT OF PATIENT HARM ON HOSPITAL CONTRIBUTION MARGIN

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5 Adler, L. Classen, D. et al. Impact of Inpatient Harms on Hospital Finances and Patient Clinical Outcomes. J Patient Saf. 20156 Disclosure: Lead author Dr. David Classen and co-author Dr. Michael Li, are both senior staff members at Pascal Metrics.


Summary of Survey FindingsFrom our research of patient safety leaders, it is clear that both they and their executives believe that improving patient safety can have a positive financial impact. Yet it is also clear that existing investment in the field is insufficient and that patient safety leaders could benefit from additional support. Perhaps that is because leaders are unclear on how best to improve safety. Or perhaps it is because the business case has been lacking. New research resolves the latter objection and demonstrates that is a substantial financial benefit to measuring and managing patient safety. What’s left now is to implement the best technologies and methodologies for doing so.

“I once heard the Director of Finance for the Nursing Department give a presentation complete with graphics that showed us that despite all our improvement projects, we never saw them affect the “dark green dollars.” How disheartening. I’ll never forget the way the room full of nursing leaders felt instantly defeated. The feeling was one of “why even bother?”

And making the clinical argument alone was never sufficient to get what you needed. You had to be savvy in making a business case to get anything done.”

- Survey participant

Documents

Whitepaper - Attitudes Toward Patient Harm And Hospital Finances