CASE STUDY: TAVR Halo Effect at a Community Hospital
For hospitals to fully understand the financial performance of a transcatheter aortic valve replacement (TAVR) program, they need a complete picture of the monetary flows—screening through intervention—associated with the program. While the revenues and costs generated by the TAVR procedure itself may be obvious, monitoring the revenue of the ancillary services provided in the treatment and follow up care are also an important component of the TAVR program. These ancillary services should be included in the program’s financial analysis. A benefit of including them is that their often-positive margins create a “halo effect” that can significantly improve the program’s overall return. Consistent tracking is the key to capturing the halo effect. This case study describes how Bronson Methodist Hospital in Kalamazoo, Michigan, tracks revenue from services linked to its TAVR program in order to document the program’s halo effect. At Bronson, TAVR procedures themselves initially produced a slight negative contribution margin, but from the outset, a group of associated tests and procedures have contributed solidly positive margins to the TAVR program. Specifically, the halo effect comes from tests performed during the TAVR screening workup and from non-TAVR procedures that some screened patients subsequently receive. The hospital has developed systems to track these additional services quarterly.
TAVR at Bronson Since performing its first TAVR procedure in November 2012, Bronson has seen the program grow steadily each year (see chart). Carmela Pulling, MA, BSN, RN, has been the TAVR program coordinator since the inception of the program and says that in the beginning it was challenging for Bronson, a community hospital, to obtain TAVR patient referrals. Unlike
Annual TAVR Procedures 50 45
40 30 20 10 0
28
30
2013
2014
6
2012 (Nov.-Dec.)
2015
“ In order to understand the full financial impact, it is imperative to consider the ‘halo’ or indirect revenues that are attributable to a program.” –R ebecca East, CPA, MBA, FHFMA, senior VP and chief financial officer, Bronson Healthcare Group
an academic hospital, Bronson had no steady stream of referrals associated with medical research. “So we started out with patients from our own cardiology practices,” Pulling says. Three years later, she says, “We are now getting referrals from primary care providers outside of our own cardiology groups, now that we’ve established our TAVR program and they see our successes.” Not all patients evaluated for TAVR at Bronson actually have the procedure, “but our valve clinic—two Thursdays a month—is constantly full,” Pulling says.
Tracking the Halo Effect
Pulling realized early on that looking only at TAVR procedures to judge the program’s financial effect was not enough. In the first year, she recalls being asked, ‘Do you know we’re losing money on our TAVR program?” So Pulling started working with the finance department to gather revenue and cost data on all of the tests performed as part of the workup for patients being evaluated for TAVR. An analysis showed that these tests, such as echocardiograms, chest x-rays, and cardiac catheterizations, were actually making a profit. Later Pulling began tracking patients who were evaluated for TAVR but went on to have a different procedure, such as surgical aortic valve replacement, so that all procedures traceable to a TAVR referral could be included in the financial analysis. Now all of these data are compiled quarterly and shared with TAVR team members, performance improvement committees, and hospital executives. The expanded analysis shows that, in 2015, Bronson’s TAVR procedures alone produce a modest contribution margin. With the combined contribution margins of the related TAVR workup and non-TAVR procedures—the halo effect—provides an incremental increase in the TAVR program’s overall contribution margin.
“ We will hit our 100th TAVR around the same time we celebrate our program’s threeyear anniversary, and that is quite a milestone for our community.” –L isa Padgett, BSN, RN, cardiovascular service line administrator at Bronson Healthcare Group
Part 1: TAVR Workup To measure this important component of the halo effect, Bronson tracks financial data on the following tests performed during a patient’s TAVR evaluation:
Chest x-rays
Blood tests
Transthoracic echocardiograms
Transesophageal echocardiograms
Stress echocardiograms
Pulmonary function tests
CT angiograms
Cardiac catheterizations
Most TAVR patients undergo multiple tests during the screening process. A report shared by Pulling showed that one group of 28 patients had a total of 116 tests as part of their workup.
Part 2: Non-TAVR Procedures For this portion of the halo effect, Bronson tracks patients who undergo a TAVR evaluation and then proceed to have one of the following procedures:
Stent placement
Balloon aortic valvuloplasty (BAV)
Surgical aortic valve replacement (SAVR)
1 http://www.edwards.com/eu/Procedures/aorticstenosis/Pages/prevalence.aspx
“ Our outpatient workup and the incremental patient’s procedures (including BAV and SAVR procedures) give us a modest profit margin.” – Carmela Pulling
A Collaborative Process The tracking starts with Pulling but involves the teamwork of other people and departments. “I track every patient seen in our valve clinic and [the points] where they reenter the system. Every quarter I send that list to our finance people so they can pull the financial data from our electronic medical record,” Pulling says. To maintain accuracy, the finance department regularly updates previous quarters’ data to include lagging reimbursements. Once Pulling receives the financial reports, she shares them with the following groups:
TAVR team
Cardiac performance improvement committee
Open heart surgery improvement committee
Hospital executives
Pulling says the process works because of the efforts of many. “Collaboration is important— from the finance person to the people working in radiology and the medical records department, to the people on the committees…it’s absolutely a joint effort.”
A Tracking Tool Developing a tracking tool is essential in monitoring TAVR-related revenue. Pulling uses the tracking tool to streamline data analysis and help evaluate the TAVR program’s effectiveness. She inputs patient demographics, tests performed, test results, follow-up visits, and mortality information for patients who have the TAVR procedure. The tool then provides procedural data to share with the TAVR team. “All I have to do is enter the data, and it computes for me,” Pulling says. In addition to halo financial data, the tracking tool Bronson uses computes metrics on procedure success rate (overall and by approach), gender, average age, and length of stay, all of which are important to the executive team at Bronson. Edwards Lifesciences, in conjunction with Optum, has developed a web-based halo tool for TAVR programs to track their respective volume of patients entering their health system through the valve clinic. The tool then calculates the attributable reimbursement, direct costs, and contribution margins. (See tracking template pg. 4).
Patient Care Improvements Lead to Better Program Economics In addition to broadening the TAVR program financial analysis by including the halo effect, Bronson has made other changes that have improved program financials. One important accomplishment was reducing the length of stay for TAVR patients. In the three years since the program began, patients’ average length of stay has dropped from about five days to about three days, an improvement Pulling attributes to better post procedure care and patient education as well as specific changes such as eliminating Foley catheter use in appropriate patients and extubating in the OR. Bronson also works hard to successfully send patients home instead of to a rehabilitation or extended-care facility after the TAVR procedure. This not only lets patients get back to their lives, but also helps Bronson avoid reimbursement penalties associated with Medicare’s Post-Acute Care Transfer (PACT) policy, which Pulling says can be 25% of the full payment. Another positive change was the new TAVR-specific DRGs (Medicare severity diagnosisrelated groups) that took effect October 2014 for Medicare reimbursement. The two new DRGs—one for TAVR in patients with a major complication or comorbidity (MCC), and one for TAVR in patients without an MCC—have resulted in greater payments than when the hospital had to use DRGs associated with surgical valve replacement. This increased reimbursement, Pulling says, has helped the bottom line. Together, the reduced length of stay and the new DRGs have had a positive effect on TAVR financials by both improving payment and lowering costs.
A Unique TAVR Program: Bronson Methodist Hospital is a community hospital serving a 10-county area in southwest Michigan. To effectively serve the broad range of patients in the area, it operates its TAVR program jointly with Lakeland Regional Medical Center, a hospital 50 miles to the west in a different healthcare system. Interventional cardiologists and cardiothoracic surgeons from both hospitals are part of the TAVR team. Patients are evaluated for TAVR in a valve clinic located at Bronson, and all TAVR procedures take place in Bronson’s hybrid operating room. Team members are committed to collaborating to bring high-quality care to patients in their communities.
Summary The most complete financial picture of a TAVR program includes not just the margin on TAVR procedures themselves but also the margins on associated tests and procedures—those that occur because of the TAVR program. Bronson Methodist Hospital, through careful tracking and sharing of data, has documented a considerable halo effect from these additional services that changes the program’s overall financial performance for the better. Following are some factors to this community hospital’s success that could be implemented by any hospital with a TAVR program: Track all tests performed as part of TAVR workups Track all non-TAVR procedures that result from a TAVR workup Compile financial reports as frequently as possible Share information with key internal groups Develop or acquire tools to streamline tracking Collaborate to optimize care and reduce length of stay Aim to appropriately discharge patients home to family/self-care
TAVR Halo Effect Report Template Valve Program Dashboard
Reimb. Direct Cost
Halo Effect Summary
Incremental Screening
Clinic Diagnosis
CPT Code
Transthoracic Echocardiogram (TTE)
93306, 93307
Transesophageal Echocardiogram (TEE)
93312, 93313, 93314, 93318, +93320, +93321, +93325
Thoracic/Chest X-Ray
71010, 71015, 71020, 71021, 71023, 71030, 71034, 71035
Contribution Margin
Volume
Reimb.
Direct Cost
Contribution Margin
Volume
Reimb.
Direct Cost
Contribution Margin
Other (Echo Test, Nuc Med Test or Diagnostic Test) Sub-Total
Vascular Imaging
Abdominal Angiogram
36200, 75625, 75630
Abdominal Angio-Lower Extremity
36200, 75716
CTA (Abdomen, Chest, Pelvis)
71275, 74176, 74177, 74178, 74174, 74175, 75635
CTA (Abdomen, Pelvis)
74174
Other Vascular Diagnostics Sub-Total
Cardiac Imaging
Cardiac CT(A)
75572, 75574
Cardiac CT(A) with CA Test
75571
Cardiac MRI
75557, 75559, 75561, 75563
Left/Right Heart Cath
93453
Left/Right Cath with CA
93460, 93461
Right Heart Cath w CA
93456, 93457 Sub-Total
Other
Lab Work (BNP, PT/INR, CBC, BMP/CMP, Sub-Total
TOTAL
Incremental Procedures
Procedures
MS-DRG Codes
Balloon Valvuloplasty (00.24, 35.96)
250, 251
Open AVR (35.11, 39.61, 35.93, 35.21, 35.22, 35.33, 35.25)
216, 217, 218, 219, 220, 221
Mitral Valve Repair (35.02, 35.12, 39.61, 35.23, 35.24)
216, 217, 218, 219, 220, 221
CABG (36.11, 36.12, 36.13, 36.14, 39.61, 231, 232, 233, 36.15, 35.16, 36.17, 36.19) 234, 235, 236 Other (stents, etc.)
TOTAL
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