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Surgical complications are expensive for all constituencies in the U.S. health care system: the surgical patients who pay the price with their own health and safety; private and government (federal and state) payers; and hospitals.
Systematic data-driven surgical quality improvement, within one hospital and across multiple hospitals, took a leap forward in the 1990’s with the advent of the Veterans Administration’s National Surgical Quality Improvement Program (VA NSQIP) and, building on that foundation, with the advent of the American College of Surgeons program for private sector hospitals, the ACS NSQIP, in 2004. Both programs have demonstrated significant success in reducing risk-adjusted 30-day mortality and morbidity outcomes in the participating hospitals.
These efforts have been taken to a yet higher level by the Michigan Surgical Quality Collaborative (MSQC), which has demonstrated significant additional quality improvement – and resulting cost reductions – by adding the element of continuous regional collaboration. Following Michigan’s model, a similar effort has been launched in Tennessee.
This paper recommends a similar approach for Massachusetts.
Based on federal government data for 2005, as well as papers published by the University of Michigan regarding the costs of surgical complications, QCMetrix, Inc. has estimated that the total annual cost to the U.S. healthcare system of only four common surgical inpatient complications is $12 billion. Of this, $5 billion is estimated to be avoidable. Of this $5 billion in recurring annual avoidable cost, approximately $2.8 billion is incurred by the Centers for Medicare and Medicaid Services (CMS) and state governments.
The four surgical complications, identified by CMS as those it has targeted for improvement in the coming years, are: Surgical Site Infections, Myocardial Infarctions, Venous Thromboembolism, and Pneumonia. An in-depth paper published by the University of Michigan in the Journal of the American College of Surgeons quantifies these costs as follows:
Massachusetts represents 2.3% of the total surgical inpatient volume in the country. QCMetrix therefore estimates the annual cost of avoidable surgical complications to the Massachusetts health care system is $115 million. Of these, approximately $66 million are incurred by the federal government (CMS) and the state of Massachusetts.
QCMetrix is a privately held corporation based in Waltham, Massachusetts. Its mission is to improve clinical and financial outcomes for surgeons and hospitals by developing and applying: information systems for the collection of reliable clinical data; data-driven disciplines and research for quality improvement; health care data analytics; and knowledge of emerging mandates.
The company was established in 2001 to help bring the Veterans Administration’s National Surgical Quality Improvement Program (NSQIP) to private-sector hospitals.
QCMetrix proposes to apply in Massachusetts a statewide model for surgical collaboration that has already demonstrated success in Michigan and is now being implemented in Tennessee. The Michigan Surgical Quality Collaborative (MSQC) is a payer-funded collaboration among 34 surgical centers in Michigan, including the state’s preeminent hospitals, that has demonstrated marked financial benefits by reducing surgical complications.
There are two fundamental elements to the MSQC:
- Participation in the American College of Surgeons National Surgical Quality Improvement Program (ACS NSQIP)
- The statewide collaboration for sharing best practices and conducting focused surgical quality improvement initiatives.
The track record of the NSQIP in reducing surgical complications is significant:
- For the ten-year period between the launch of the NSQIP within the VA in 1994 and 2004, the VA experienced a 45% reduction in complications. While most of the improvements were achieved in the first three years, continued improvements were sustained over the subsequent seven years.
- When the NSQIP was first implemented outside the VA at 14 large academic medical centers during 2001-2004, complications were reduced by 9% over three years, or approximately 3% per year.
- The ACS NSQIP, launched in 2005 by the American College of Surgeons, is now in approximately 250 hospitals nationwide.
The results of the MSQC to date make a compelling case in favor of ongoing statewide collaboration. The graph and the chart below both demonstrate significant reductions in complications by MSQC, over and above those reductions achieved by ACS NSQIP hospitals that are not involved in a state-wide collaborative. (Please note that for the periods of these comparisons, there were still only 14-16 hospitals in the MSQC.)
QCMetrix has played a central role in providing the information systems and the day-to-day program management and clinical training for the ACS NSQIP and for MSQC and now also for the Tennessee Surgical Quality Consortium. In addition, QCMetrix has strong relationships with the leadership of MSQC. As a Massachusettsbased company, QCMetrix would propose to facilitate the establishment of the Massachusetts Surgical Quality Collaborative (MA-SQC).
Day-to-day program management and clinical training would include: design, deployment, maintenance and update of the program’s information systems; continuous operation of the information systems; technical support to hospital IT staffs for installation of key software components; documentation and daily support to clinical data collectors (usually, but not necessarily nurses) for software, application of clinical data definitions, and other issues; initial training and on-going testing of clinical data collectors; validation of data collection.
In the case of Michigan, Blue Cross Blue Shield is the dominant payer, with 47% of the patient population, and has been willing to take this leadership role in the state.
However, in the long run, given the collaborative nature of this work, QCMetrix believes that state governments may be best positioned to act as neutral, independent enablers of this scale of collaboration.
Return on Investment
From the graph included in the “Solution” section, above, the complication rates at the participating MSQC hospitals went from 13% to 8% in the first two years alone. This 5 percentage point drop in complication rates translates to a 38% reduction in the number of surgical complications.
The total recurring annual costs to the Massachusetts health care system, as derived in “The Problem” section, above, is $115 million. Since we propose to establish the collaborative at the 35 hospitals that account for 80% of the state’s surgical volume, the total annual costs of surgical complications at these hospitals is $92 million.
A sustained 38% reduction in these costs amounts to annual savings to the Massachusetts state health care system of $35 million. Of these savings, we estimate the savings to the state of Massachusetts and the federal government to be $20 million per year. This would constitute a dramatic return on the investment, assuming no contribution by the federal government or by the participating hospitals themselves.
The charts on this page are from an article from the Annals of Surgery titled The Michigan Surgical Quality Collaborative – Will a Statewide Quality Improvement Initiative Pay for Itself? This lays out both the background of the MSQC initiative and the positive outcomes from establishing a statewide surgical collaborative. They show dramatic reductions in surgical complications over time.
There is no requirement for the passage of legislation, executive order, or mandatory regulations. The NSQIP program is sponsored and overseen by the American College of Surgeons. There has not been any attempt to date to regulate or develop policy for the ACS NSQIP or for the Michigan Surgical Quality Collaborative (MSQC). However, the leader of the MSQC, Dr. Skip Campbell of the University of Michigan, has spoken with U.S. Congressional panels about the potential of applying this collaborative model nationwide.
In order to set up and organize the surgical collaborative, we estimate that the costs of personnel, travel, telecommunications and other associated office expenses will be approximately $100,000. This would cover six months of an experienced administrator’s salary and benefits, with the balance used to cover travel, communications and other office expenses. An additional sum of up to $20,000 may be needed for designing and developing an identity and a web site for the collaborative, and to support the remote installation of the web-based software on one or several of the hospitals’ personal computers, which will be used by the nurse who collects the data. The costs of hardware and software will be covered in the monthly service fee paid by the collaborative for hosting, supporting, and maintaining the data collection software, data analysis, and reports for the hospitals.
In order to participate in the ACS NSQIP program, hospitals are required to hire a trained surgical clinical reviewer whose only task is data collection and submission to the ACS NSQIP. When fringe benefits are included, a surgical clinical reviewer’s compensation as well as travel and administrative costs will be, on average, approximately $115,000/year. The annual hospital fee for participation in the ACS NSQIP, which includes licensing fees for the use of NSQIP methodology, the web site, data automation, data reporting and analysis, and nurse education is $35,000. Therefore, the per-hospital cost will be $150,000 per year.
Approximately 35 Massachusetts hospitals account for 80% of the state’s surgical volume. The annual cost of funding their participation will be $5.25 million. We estimate the annual cost of coordinating the collaborative, including statistical analysis, quarterly meetings and staff will be approximately $1.25 million.
There is no fundamental reason to limit the program to 35 hospitals. This proposal has been based on publicly-available research indicating that 80% of Massachusetts’ annual volume of surgical procedures is performed at 35 hospitals and that, therefore, the highest ROI would be derived from working on the hospitals with 80% of cases, but it is certainly true that the program can encompass the participation of all hospitals performing surgery in Massachusetts, and can potentially be extended regionally to other New England states.
The total cost of this proposal, focused on the 35 hospitals, would be $6.5 million per year. Based on the experience of the MSQC in reducing surgical complications, the state of Massachusetts can realize a significant return on its investment.
The initial goals for establishing a statewide collaborative would be to address the lack of good reliable data and the lack of well-organized systems for translating data into meaningful quality improvement. The ultimate goals are to improve surgical outcomes and to reduce costs in Massachusetts. To meet these goals, we need to identify 35 Massachusetts hospitals interested in collaborating, establish a sustainable, cost-efficient system for tracking processes and outcomes at each participating hospital, and collaborate with clinical champions at each hospital in identifying and implementing “best practices”. Also, tracking quality improvement initiatives targeted at specific procedures, linking quality improvement efforts to rigorous health services research, and demonstrating to both consumers and purchasers that systems of care are effectively working to optimize surgical quality and outcomes will help achieve these goals.
Contact the Author:Majed Tomeh
President & CEO
400-1 Totten Pond Road
Waltham, MA 02451