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Turning Data into Dollars: How To use Quality Management information To Create Value for Your Practice
Richard P . Dutton, MD, MBA
Executive Director, Anesthesia Quality Institute, Park Ridge, IL
The Anesthesia Quality Institute (AQI) was founded in 2009 to promote patient safety and quality management efforts across the specialty. The primary mission of the AQI is development of the National Anesthesia Clinical Outcomes Registry (NACOR), a repository for anesthesia case-specific data from across the country. NACOR is populated by transmission of electronic information from participating anesthesia practices and hospitals, including administrative (billing) data, Anesthesia Information Management System (AIMS) data, elements from the hospital’s electronic healthcare records, and purpose- gathered patient outcome information. The AQI began recruiting practices a year ago, and began accepting case data from January 1, 2010. To date, the AQI has contracts with more than 40 anesthesia practices (including several ABC clients) and is working with more than a dozen anesthesia software vendors to format, transmit and translate their data into NACOR. Although few AQI sites have all of the desired data in electronic form today, all are working toward a future state that is 100% digital. In the meantime, the quantity of data that is available is truly astounding: NACOR will include a million anesthetics by the end of 2010, representing the work of thousands of anesthesiologists and CRNAs at hundreds of surgical facilities. But data collection, by itself, does not produce value. Value arises when the data is put to work.
This article will discuss the ways in which the data collected by the AQI—and reported back to participating practices—can be turned into tangible benefits for both patients and providers. I will cite examples that apply today using the relatively limited data now in NACOR, and I will suggest some examples that will apply in years to come. One of the first lessons of quality management, after all, is that the process is like peeling an onion: there is always another layer of understanding and improvement beneath the current one. The AQI and NACOR are just getting started, but will grow by incremental improvement in each year to come. More practices will be included, and more and ‘denser’ data will be gathered from the groups that are already signed up.
Benefits Provided by the Data
The purpose of quality management (QM) is to improve patient outcomes from their healthcare. ‘Improvement’ can take many forms, ranging from hard science (reduction in morbidity and mortality) to highly subjective (improvement in satisfaction scores). Improvement can also take the form of achieving identical outcomes at lower cost, or in higher- risk patients. Improved outcomes have direct value to the patients and practice, of course, but the data collected along the way can be applied for many other purposes. These are summarily listed in Table 1 and discussed in more detail below.
Let’s start with a straightforward example. One QM measure is “central- line associated blood stream infection,” or CLABSI. The rate of occurrence of this complication is provided by the AQI to the contributing practice, along with the national rate in similar hospitals. As a serious complication, the local rate would be ‘adjusted’ for known risk factors: age, ASA class, case mix, and others as available. The rate is reported only for those groups contributing all of the necessary data. Groups with a higher rate than their peers (“high outliers”) would be empowered to address the issue, and adopt new local policies to reduce the incidence of this complication, perhaps using guidelines or standards developed by ASA and promulgated by AQI. In the end, patient care is improved. And a considerable financial benefit is realized: each CLABSI prevented will save the hospital as much as $80,000, and perhaps more than that if current federal plans to dock payment for this so-called “Never Event” reaches fruition. For the anesthesia practice, reduction of the CLABSI rate begins as an opportunity to benefit patients, but ends up generating an important financial return. While this is just one example, the generic observation is equally true. Complications cost money. Reducing complications saves money. Everyone wins. And there are indirect benefits as well.
Improved QM data, with national benchmarks from AQI, will have value to the practice even before addressing specific outcomes. The core activity of QM is collection of data that documents a business, and the first result of most QM programs is simply a better understanding of how that business works. What activities consume the most time? What brings in the highest revenue? What just isn’t worth doing? These administrative endpoints, descriptions of process rather than outcomes, are nonetheless important for practice management. How many ORs should be staffed, and for how long each day? Which procedures take longer than they should? How much does it cost to perform an average anesthetic?
More particularly, QM data can be used to make decisions regarding hiring and firing, OR staffing, and contracts with hospitals and surgeons. Documentation of improved outcomes can feed directly into ‘gain-sharing’ discussions with the hospital. Trends over time can be examined to determine which portions of the business are growing, and which are not. Increased quantity and specificity of data is also useful to meet regulatory requirements, and facilitating this use is one of the AQI’s goals. Reporting of practice outcome data in comparison with national benchmarks will meet many overall requirements for anesthesia department QM activity, while data available on a per-practitioner basis will be of use for Joint Commission Ongoing Professional Practice Evaluation (OPPE) and Focused Professional Practice Evaluation (FPPE), and for the Maintenance of Certification requirements of the American Board of Anesthesiology – as well as to the practitioner seeking to understand his or her own performance.
The bottom line is that QM data equals business data. The numbers are the same, but the application is different. Putting the data to work for the practice is driven by the questions that need to be answered, and many times new questions can be answered by a different look at existing data. One of the goals of the AQI is to present data back to participating practices in such a way that they can make these new uses themselves. Rather than a static 2-dimensional stack of paper, the AQI practice report will be a web-based tool that allows the participating group to combine and manipulate the data in ways that are of most use to them, based on local circumstances. This includes specific reports for individual facilities and providers, specific looks at certain procedures, and detailed examination of outcomes data. As an example, consider the use of data surrounding the rate of post-operative nausea and vomiting in a given facility. Perhaps a question has been asked in the PACU Committee suggesting that the rate is too high. Practice data reported by the AQI could be used to confirm or deny this suggestion by comparison to national benchmarks. Even more important, AQI data could then be used to take a focused look at the problem, by showing which patients appear to have the greatest risk, based on provider, procedure, age, gender, specific anesthesia medications used, time of day, and combinations of all of these variables.
Future Measures Will Include Patient Satisfaction
Because they are hard to make perfectly objective, measures of patient satisfaction are under-represented in anesthesia QM at the present. Looking at the future state of regulation, however, it is hard to imagine that patient-focused outcome measures aren’t going to be important. These can range from obvious elements like the rate of postoperative nausea and vomiting or the quality of pain relief to more complex and synthetic measures such as the Net Promoter Score (e.g. “on a scale from one to ten, how likely would you be to recommend this anesthesiologist to a friend or relative?”).
Working to improve patient satisfaction, based on benchmarks from the AQI or other sources, might involve a variety of different tactics targeting everything from standardized orders for postoperative analgesia to changing the magazines in the Surgicenter waiting room. As patients become more empowered to choose their own healthcare, including physicians, treatments and hospitals, attention to providing the patient what they want will have increasing value. Odds are that your hospital is already putting substantial effort into improving the so-called “hotel services,” and odds are that the OR is an important portal of entry for patients and their families. How long will it be before the anesthesia practice is ‘invited’ to participate in customer service training? Wouldn’t there be value in getting to this first?
The Hawthorne Effect and Incidental Positive Outcomes
In addition to improved clinical outcomes and enhanced patient satisfaction, there are cultural benefits to the use of QM data. Quality management is strongly sensitive to the Hawthorne Effect, which states that close examination of outcomes tends to affect them. While this is a source of bias in scientific research, it is an important benefit in QM. Knowing that outcomes data is being collected, and seeing evidence of this in periodic reports will lead to improvement in the measured outcomes over time, even without overt changes in department practice or procedures.
There is also a ‘pull through’ effect, where focus on one outcome (e.g. PONV rate) may improve other seemingly unrelated outcomes (e.g. rate of satisfactory postoperative analgesia). Even without considering these subjective benefits of QM data reporting, the ability to present and discuss real numbers can make the process of implementing changes more digestible for members of the practice. Knowing the exact rate of inadequately documented procedures, for example, provides a powerful lever for making changes in the billing system.

Tracking QM outcomes over time, which AQI data will facilitate, allows practice leadership to develop success stories that will meet regulatory needs externally and can help to improve culture internally. Being able to walk a surveyor or hospital executive or board member through a QM project from start to finish (see Table 2), using real data from real patient care is the most powerful possible illustration of the practice’s commitment to continuous improvement. Internally, being able to describe victories in tangible terms will help snap colleagues out of their normal cynicism towards increasing bureaucracy.
Working for a practice that takes QM seriously will improve the morale of individual practitioners, and will enhance recruitment and retention efforts. Done right, QM helps to put the emphasis on evidence-based improvements in care, and encourages a team and systems approach over individual blame. Self- reporting is enhanced. Anesthesia providers feel empowered when they can see tangible improvements in outcomes developing over time. This facilitates participation in further effort and further change.
External to the Department, the use of QM data to guide decisions and make improvements will create an important perception of the group as interested in patient outcomes, driven by data and committed to continuous improvement. Even beyond the use of specific pieces of data and QM stories to influence particular decisions, the reputation for collecting and acting on objective information will benefit the group in contracts with surgeons and hospitals, relations with other departments and service contractors and even with public advertising. One reason that the AQI has a licensing program for our preferred vendors and participating practices is that we believe that commitment to data- driven QM is the mark of an efficient, future-oriented practice, one that can be trusted to take good care of its patients.

Benefits to the Specialty of Anesthesiology
On the national level, the contribution of practice data to the AQI will bring benefits to the specialty as a whole. Aggregated data will have scientific purposes, of course, but it will also empower the advocacy efforts of ASA and its leaders. In an ever-changing landscape of healthcare reform the ability to help shape the regulations that we will live under is priceless, and there is no better way to influence discussions with regulators than to bring data from real clinical practice to the table.
The practice of medicine is changing rapidly in the United States, and its final shape remains uncertain. One thing that is likely, though, is that every provider— hospital, practice and individual—is going to face an increasing need to demonstrate in a tangible way the value they bring to patient care. The AQI is committed to meeting this need on behalf of anesthesiology, and with the help of practices and practitioners across the country we will find many future ways to do so.
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Richard P. Dutton, M.D., MBA, is Visiting Professor of Anesthesiology, University of Maryland School of Medicine and AQI Executive Director. To contact Dr. Dutton or the AQI, visit www.aqihq.org.

More Than Ever, It's About Data

Tony Mira
President & CEO

By the end of 2010, the Anesthesia Quality Institute will have records for more than one million anesthetics in its database, the National Anesthesia Clinical Outcomes Registry. This is an impressive feat, considering that NACOR only began accepting data on January 1. We are proud of the fact that some of our clients were among the first practices to sign participation agreements and that our information system, F1RSTAnesthesia, was quickly adapted so that we could easily transmit client data to NACOR.

The overall number of practices contributing data can be expected to grow exponentially now that the AQI has truly established its identity. The AQI booth at the ASA Resource Center in San Diego will certainly draw a great deal of interest. So will the various presentations and lectures on improving patient outcomes using case registries.

To paraphrase Richard P. Dutton, MD, MBA, Executive Director of the AQI and author of the lead article in this issue of the Communique?, the volume of quality management data is just the beginning. The real value lies in the use of the data, and Dr. Dutton makes an excellent argument for the proposition that “the bottom line is that QM data equals business data.” Table 1 on page 4 lists some of the ways in which the use of AQI data can add value to an anesthesia practice, including reducing costly complications, meeting regulatory requirements, understanding the basic metrics of the practice, and “fueling resource allocation and contract discussions with facilities.”



The AQI was the future; it is now the present. Also very much in the present is the need for anesthesia practice owners—the anesthesiologists themselves—to understand the basics of running their business and to continue studying the market. “Breaking Down the Business of Anesthesia” was written by two practicing anesthesiologists and one professional practice administrator. Attorneys Abby Pendleton’s and Jessica Gustafson’s article “Focus on Compliance” also contains here-and-now recommendations.

Still in the future are various vehicles for sharing the savings from improvements in health care delivery such as Accountable Care Organizations. Re-reading Kathryn Hickner-Cruz’s and Carey F. Kalmowitz’s article on ACOs, I am struck by how heavily the Patient Protection and Affordable Care Act stacked the ACO decks in favor of maximizing patients’ choices. Even so, the ACO provisions offer so much opportunity to run afoul of the anti-kickback and Stark laws and federal antitrust principles that as we go to press, the FTC and CMS are holding a major joint public meeting to resolve apparent conflicts. The nascent ACO rules could, all by themselves, turn out to be the “Full Employment for Lawyers” legislation that we feared the Affordable Care Act might become.

We expect to learn about additional developments and trends in anesthesia practice management at the ASA Annual Meeting that begins on October 15. Please come by our booth and talk with our staff and business partners. See you in San Diego!

With best wishes,

Tony Mira
President and CEO
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AQI and Related Presentations at the ASA Annual Meeting
As a strong supporter and early adopter of the AQI, ABC encourages readers who will be attending the ASA Annual Meeting to visit the Anesthesia Quality Institute (AQI) booth October 15th-20th in the ASA Resource Center at the San Diego Convention Center - Sails Pavilion (Upper Level). AQI personnel will staff the booth and be available for questions and information.
A variety of educational opportunities relating to anesthesia data and registries is being offered (see the list below) during the meeting. More information and registration for these programs can be found on the ASA Anesthesiology 2010 Web page at http://www2.asahq.org/web/index.asp.
Saturday, October 16, 2010
• Implications of Patient Outcomes Registries for the Practice of Anesthesiology
  San Diego Convention Center, Upper 5B
  9:30 – 11:30 am
• Anesthesia Information Management Systems: How to Choose and How to Use
  San Diego Convention Center, Upper 6C
  2:10 – 3:00 pm
Sunday, October 17, 2010
• AIMS Outside of the OR
  San Diego Convention Center, Upper 2
  10:00 – 12 noon
• ASA Closed Claims Project and its Registries: Value to Patients and Pocketbook
  San Diego Convention Center, Upper 6F
  1:00 – 3:00 pm
Monday, October 18, 2010
• Rovenstine Lecture/Anesthesiology: From Patient Safety to Population Outcomes
  San Diego Convention Center, Upper Ballroom 20A-C
  11:15 – 12:20 pm
• Should My Group/Department Share Patient Data with National Data Repositories?
  San Diego Convention Center, Mezzanine 16A
  3:00 – 4:30 pm
Tuesday, October 19, 2010
• So You Want to Install an AIMS System
  San Diego Convention Center, Upper 33A-B
  8:00 – 11:00 am
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Breaking Down the Business of Anesthesia
Joseph F. Answine, M.D. Assistant Secretary Treasurer, Pennsylvania Society of Anesthesiologists
Fred Rosetty, Practice Administrator and Chief Operating Officer, Riverside Anesthesia Associates, Ltd.
Kevin Slenker, M.D., President, Anesthesia Associates of Lancaster, Ltd.
During most doctors’ undergraduate and medical education, understanding the business side of the industry is the furthest thing from their mind. They want to be a doctor, help people, and somehow miraculously it would come with a paycheck.
Most go through their residency years expecting to compile significant debt. But that is OK because, the thinking goes, all the debt would go away and their ignorance to the financial side won’t be a factor.
However, in today’s world of being a doctor and anesthesiologist, the initial payout is larger, the debt is huge, overhead isn’t shrinking to say the least with malpractice premiums at the top of the list, and reimbursement is dwindling with projections of becoming significantly worse. In a private anesthesia group, many times the physicians in the group are too busy to realize when they have reached a critical mass and the need has arisen to hire a professional businessperson to take over the day-to-day management of the practice.
The most successful private practice anesthesiagroupshaveahighlyfunctional and symbiotic relationship between the physician CEO and the layperson practice administrator, executive director or chief operating officer.
Private anesthesia groups all have differing needs due to market demographics, payer markets, clinical needs of the facilities they cover and internal group dynamics. However, a seasoned practice administrator can work collaboratively with the group’s physician CEO, board of directors and/ or executive committee to improve three important underlying business dynamics: payer contracting process, governance/ strategic planning and managing the billing process.
The billing process can be managed either internally with an in-house staff or externally by working with a competent and established anesthesia billing company.
Both the Medical Group Management Association (Physician Compensation and Production Survey and Cost Survey for Single Specialty Practices) and the ASA (Fee Survey) have compiled statistics and metrics that can be successfully used to negotiate and benchmark payer contracts. Most payer contracts can be broken down into three or four different components: surgical anesthesia, obstetrical anesthesia, non-anesthesia procedures (TEE monitoring, insertion of Swan Ganz catheters, insertion of Arterial lines, etc.) and chronic pain management.
Many anesthesia groups focus exclusively on negotiating a fair market value for the anesthesia unit conversion factor at the expense of factoring in how the remaining two or three components can dilute the overall expected value of the contract. Obstetrical anesthesia (labor epidurals, caesarian sections) claims can easily be underpaid or denied by payers because of the varying methodologies for billing anesthesia services for labor epidurals.
Units for epidural insertion, infusion time, units for anesthesiologist face- to-face time with the patient and units for removal of the epidural catheter may all be partially reduced or denied entirely depending on each payer’s claim processing system ability. For simplicity and improving the effectiveness of post payment monitoring, some anesthesia groups have successfully negotiated global fees for obstetrical anesthesia, which removes several impediments in processing obstetrical anesthesia claims.
Careful attention should also be paid to payer fee schedule rates for non-anesthesia procedures and chronic pain management. Historically most of these procedures have been assigned units via the ASA Relative Value Guide; unfortunately, since Medicare and most commercial insurers’ payment methodology is via a fee schedule unrelated to ASA units, most practices have abandoned the process of assigning ASA units to these procedures when managing their billing operations.
Payer fee schedule rates should be converted into per ASA Relative Value unit rates to effectively monitor the effect of these items on the overall payer contract that is being negotiated. By maintaining this practice, which assigns relative value to all of the services that a typical anesthesia group provides, multiple payer contracts or terms can be compared to determine the most favorable arrangements.
The following example illustrates how a seemingly innocuous payer contract with a unit conversion factor of $60 per unit can “net out” at significantly less money for the anesthesia group:
In this example, the dilutive effect of obstetrical anesthesia, non- anesthesia procedures and chronic pain management reduced the overall expected reimbursement of the contract by $7.50 per unit or 12.5 percent. Further significant dilution will occur when a payer’s policy is to split the anesthesia claim (reducing reimbursement to the attending anesthesiologist for medical direction of non-group employed nurse anesthetists). In the example above, if the anesthesia group medically directs 50 percent of the total surgical anesthetics, group reimbursement will be further reduced by $21 per unit ($60 per unit times 70 percent times 50 percent).
This is a simplistic example of how payers can dilute the value of an anesthesia contract without the anesthesia group knowing how and why the dilution occurs. Similarly, many anesthesiologists do not have a good understanding of some of the internalprocessesandmechanicsofthe health insurers that pay their claims.
An important concept to understand when interacting with health insurance payers· is the concept of ‘float.’ Financial ‘float’ occurs when premiums are collected ‘up-front’ by payers and invested until those premiums are paid out later as claims. The longer the payer holds onto the premium money collected, the more valuable the float becomes. In its essence, float is money and health insurance payers are conduits for investable cash.
Warren Buffett, whose holding company, Berkshire Hathaway, is one of the top 10 insurance companies in the world, described this concept wittily in “The Making of An American Capitalist:” “Initially, the morning mall brings in lots of cash and few claims. This state of affairs can produce a blissful, almost euphoric, feeling akin to that experienced by an innocent upon receipt of his first credit card.”

These examples serve to illustrate that sophisticated market forces are at work and can adversely affect the financial fortunes of anesthesiologists. I would encourage all anesthesiologists to devote as much time as possible to understanding some of these forces and to obtain business education either by working with experienced practice administrators, attending the ASA PracticeManagementConferenceor registering for the ASA Certificate in Business Administration Program.
It is not enough just to provide a great clinical service in today’s marketplace. To those anesthesiologists who venture into private practice without a fundamental understanding of market forces, I will close with “Caveat emptor.”
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Joseph P. Answine, M.D. is a past president of the Pennsylvania Society of Anesthesiologists and is currently serving as Assistant Secretary Treasurer. Dr. Answine is also a delegate to ASA’s House of Delegates.
Fred Rosetty, MBA earned his Bachelor’s and Master’s of Business Administration degrees from Shippensburg University and has also done graduate and postgraduate work in Healthcare Administration at Penn State University Harrisburg. Mr. Rosetty worked for Highmark BlueShield from 1989-1992 as a Senior Financial Analyst. From 1992- 2007 he worked as Administrative Director for a 35+ physician anesthesia group and since June, 2008 he has served as Executive Director of a 45 physician anesthesia group.Mr. Rosetty’s expertise includes payer contracting, practice benchmarking, financial and revenue cycle analysis and physician/staff recruitment and development. Mr. Rosetty has also been an Adjunct Professor of Business Administration at Central Pennsylvania College in Summerdale, PA since 2002. He may be reached at frosetty@raahq.com.
Kevin F. Slenker, M.D., President, Anesthesia Associates of Lancaster, Ltd. and Staff Anesthesiologist, Lancaster General Hospital. Dr. Slenker may be contacted at kevin_slenker@aal.bz.
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ABC Partners with ePREOP
Anesthesia Business Consultants, LLC (ABC) has entered into a partnership with ePREOPTM Integrated Preoperative Services. ePREOP is a revolutionary software system designed by anesthesiologists who want to ensure that the right pre- anesthesia tests are ordered and the correct patient instructions are given for each procedure. The software also facilitates the transfer of patient data between parties. This eliminates duplicate interviews and data entry requirements. A standardized mobile anesthesia preoperative evaluation form is available that allows timely access and completion of the record. It also provides an anesthesiologist with the ability to capture and track quality measures. ePREOP helps anesthesia groups secure their standing with their contracting institution by improving outcomes and eliminating waste.
Using a web-based platform, ePREOP is specifically intended to bridge the gap between the surgeon’s office and the surgical facility. ePREOP interfaces with various electronic health records like Google Health, Allscripts, and HealthVault. The software’s algorithms are based on a large,viewable database of peer-reviewed articles on preoperative testing from the anesthesia and surgical literature. The program analyzes hundreds of thousands of data points and delivers preoperative clinical guidelines tailored to the individual patient. These recommendations can significantly improve postoperative outcomes, decrease case delays and cancellations, and reduce wasteful spending.
ePREOP allows for a seamless transfer of patient data between parties — surgeon, anesthesiologist and hospital or surgery center — and eliminates the need for duplicate patient interviews. When an existing electronic health record is not in use, ePREOP creates a stand-alone preoperative EHR that is accessible from an electronic kiosk, iPad, or other computer, even one in the patient’s home. The patient data go directly to the surgical facility along with lab recommendations and results.
ePREOP, the company, was founded by a team of independent, board-certified physicians. As the delivery of healthcare services becomes increasingly complex, ePREOP, provides a service that simplifies the communication between patients and the multiple physicians and hospital staff that will be involved throughout any surgical experience. Among the most immediate, measurable clinical and cost saving benefits is the invaluable opportunity for customers to demonstrate their value by increasing OR efficiency and quality of care within their institutions.
For further information, visit www.epreop.com, or contact: epreop@epreop.com, or visit the ABC exhibit at the ASA Annual Meeting in San Diego, where ePREOP will be on display.
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