Overview

Patient safety has been a longstanding declaration of priority in healthcare. Yet, when it comes to budget allocations, the commitment to patient safety often appears secondary. Developing a convincing CFO-grade business case for patient safety has been challenging due to the need to link timely patient safety and risk data directly to financial outcomes. Enter innovative tools like VPS that are shifting the paradigm.

Pascal VPS stands out by not only facilitating this connection but also offering a business case that meets CFO expectations. The real ROI derived from addressing adverse events—as opposed to general patient safety metrics—emanates from three pillars: patient safety, risk management, and the revenue cycle.

Three Pillars of ROI from Addressing Patient Safety

  1. Patient Safety. The quintessential hurdle in establishing a patient safety business case is measuring the efficacy of safety initiatives. VPS finds 10x more serious harm than currently captured by event reporting and Pascal clients reduce over 25% of that greater harm. Health system boards and leadership are now enabled by VPS with powerful data analytics and standardized metrics to accurately measure financial outcomes related to the incidence of adverse events such as excessive length of stay (XLOS). 

Specifically, both peer-reviewed published and real world evidence from Pascal’s Community Collaborative have validated that patient harm can extend patient hospital stays by an average consistent with what the landmark Harvard study in the NEJM published, i.e. 5.1 XLOS days. Based on validated patient harm reduction with the VPS solution, hospitals have demonstrated tangible financial benefits of adverse event reduction initiatives, generating over 3x ROI annually from XLOS reduction alone.

  1. Risk Management. Longstanding reliance on event reporting in risk management is now challenged by Pascal’s capability to detect serious harm and potentially compensable events within hours – not weeks or months. This expedites the essential process of “early identification” in medical liability, traditionally capped at 90 days. Utilizing real-time EHR data for adverse event outcomes, VPS can deliver substantial savings in legal costs and indemnity payouts.

By leveraging clinically validated adverse event outcomes based on real-time EHR data (“AE Outcomes”), VPS can enable the reduction of indemnity payouts, legal expenses, and overall financial exposure resulting from legal liability.

Check out next month’s blog to learn about a specific capability pioneered by Pascal VPS
illustrating what clinicians can do to avoid financial exposure and improve patient experience.

  1. Revenue Cycle. As CMS shifts towards value-based care (VBC), hospital reimbursement is increasingly tied to EHR-based harm measures. As a result hospitals must focus on minimizing harm incidents to protect reimbursement. Pascal VPS is a valuable asset in this regard, because CMS’ use of clinical data enables hospitals to avoid the choice of using claims data to meet CMS measures and get paid versus using clinical data and improving outcomes.  For the first time, health systems can do both!

CMS has used what is fundamentally the same underlying method of EHR data elements as used by Pascal’s trigger-based methodology to develop the first EHR-based hospital harm measures tied to reimbursement:  hyperglycemia; hypoglycemia; and opioid-related adverse events – with reportedly many new such measures in the measurement development pipeline. 

While a multitude of companies can apply CMS’ logic on discharged patients, very few can continuously fire algorithms upstream while the patient is in the hospital on an existing clinically integrated workflow – i.e. Pascal VPS – to identify patients who are “candidates for a measure”, i.e. those patient stays that will receive less reimbursement.  This is yet another way in which Pascal client investments can achieve higher ROI while not requiring a completely new investment (or fixed cost)

Conclusion

Historically, hospitals and healthcare organizations have largely relied on administrative or billing data which is after the patient has left the hospital, which are highly retrospective, or voluntary event reporting data, which can be more timely but miss 95% of the events and underlying patterns of harm.   

Researchers, regulators, and health systems are showing that trigger-based methodology can be operationalized at scale and can deliver a materially significant CFO-grade business case for patient safety – measured as an at least 3x annual ROI.