March 2018 â&#x20AC;˘ Vol.9 No.2
Industry experts share their insights into recent headlines of acquisitions, mergers in healthcare.
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CONTENTS »» MARCH 2018
4 Fee-for-service still reigns 28 Colorectal Cancer But alternative payment methods Early detection is key are catching on 34 HEDIS updates address 8 Stop Making Sense transitions of care Opioid usage and telehealth are also key points The Journal of Healthcare Contracting is published bi-monthly by Share Moving Media 1735 N. Brown Rd. Ste. 140 Lawrenceville, GA 30043-8153 Phone: 770/263-5262 FAX: 770/236-8023 e-mail: email@example.com www.jhconline.com
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The Journal of Healthcare Contracting (ISSN 1548-4165) is published bi-monthly by Share Moving Media, 1735 N. Brown Rd. Ste. 140, Lawrenceville, GA 30043-8153. Copyright 2018 by Share Moving Media All rights reserved. Please note: The acceptance of advertising or products mentioned by contributing authors does not constitute endorsement by the publisher. Publisher cannot accept responsibility for the correctness of an opinion expressed by contributing authors.
The Journal of Healthcare Contracting | March 2018
The first section of the report focuses on the extent to which physicians are in practices that belong to medical homes and Medicare, Medicaid, and commercial accountable care organizations (ACOs), as well as how that participation varies across practice attributes and how it has changed over time. The second section examines practice involvement in various payment models such as fee-for-service (FFS) and alternative payment models, including pay-for-performance, bundled payments, shared savings, and capitation.
Medical homes and ACOs At the end of the first quarter of 2017, ACOs covered more than 10 percent of
Fee-for-service still reigns But alternative payment methods are catching on
the U.S. population. ACOs have steadily grown, with a 2.2 million increase in covered lives and a net increase of 92 ACOs from the end of the first quarter in 2016 through the same period in 2017. In 2016: • 25.7 percent of physicians worked in practices that belonged to a
Fee-for-service may be on a decline, but it maintains a strong grip on physician practices, at least for now. At the same time, participation in accountable care organizations and medical homes is on the upswing. Last fall, the American Medical Association’s Division of Economic and Health Policy Research released the results of its 2016 Physician Practice Benchmark Survey, which focuses on
medical home. • 31.8 percent belonged to a Medicare ACO. • 20.9 percent belonged to a Medicaid ACO. • 31.7 percent belonged to a commercial ACO.
the practice arrangements and payment methodologies of
physicians who take care of patients for at least 20 hours per
Overall, 44 percent of physicians
week and who don’t work for the federal government. Bench-
were in practices that belonged to at
mark surveys had previously been conducted in 2012 and 2014.
least one type of ACO. Although earlier March 2018 | The Journal of Healthcare Contracting
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Payment Methods and Revenue Share Reported by Physicians inShare 2016 Figure 6. Payment Methods and Revenue Reported by 14
Physicians in 2016
that received payment by at least one formance and bundled payments had
the highest participation rates of the
alternative models examined – approxi-
mately 35 percent.
Despite participation in alternative
payment models, the results show that
percent of physicians were in practices alternative payment model. Pay-for-per-
models was not uncommon. In fact, 59.1
Percentage of Physicians with any Payment from Method
Share of Practice Revenue from Method
Source: Author's analysis of AMA 2016 Physician Practice Benchmark Survey. Note: See Appendix Table 2 for distribution of yes, no and don't know responses across payment methods. The revenue shares across payment methods do not sum to 100% because of "don't know" responses.
AMA Economic and Health Policy Research, “Payment and Delivery in 2016: The Prevalence of Medical Homes, Accountable Care Organizations, and Payment Methods Reported by Physicians.
such models accounted for a relatively small share of revenue. On average, pay-for-performance and capitation made up close to 7 percent of practice revenue, while bundled payments accounted for almost 9 percent and
data on Medicaid and commercial ACO participation were not
shared shavings only 2 percent. Thus,
available, AMA found that participation in medical homes and
FFS dominated with the highest par-
Medicare ACOs was up slightly (by 2 to 3 percentage points)
ticipation rate as well as a much higher
from 2014. Despite the increase in participation, awareness
share of practice revenue at an average
about participation remained the same as in 2014. For both
of 70.8 percent.
medical homes and Medicare ACOs, about 25 percent of phy-
As with their participation in medical
sicians did not know whether their practice was part of that
homes and ACOs, some physicians were
unaware of whether their practice re-
ceived revenue through certain payment models. While only 10.6 percent of phy-
The AMA study examined the percentage of physicians in
sicians were unaware of whether their
practices that received fee-for-service and/or alternative pay-
practice received payment through FFS,
ment models in 2016, trends in receiving payment from FFS
the level of unawareness about receiving
from 2012 to 2016, and whether receiving FFS or alternative
payment through alternative payment
models appeared to be related to participation in medical
models ranged from around 20 percent
homes and ACOs.
for pay-for-performance, capitation, and
Although FFS was the method reported most often by physicians (83.6 percent), receiving revenue through alternative
bundled payments, to almost 30 percent for shared savings.
Source: AMA Economic and Health Policy Research, “Payment and Delivery in 2016: The Prevalence of Medical Homes, Accountable Care Organizations, and Payment Methods Reported by Physicians,” https://www.ama-assn.org/ sites/default/files/media-browser/public/health-policy/prp-medical-home-aco-payment.pdf 6
March 2018 | The Journal of Healthcare Contracting
Editor’s note: On Feb. 21, after this article was written, Bon Secours Health System and Mercy Health announced their intent to merge. The merger would create a system comprising 43 hospitals, 1,000 care sites, and 10 million patient encounters across seven states.
The title of the afore-mentioned 1984 Talking Heads movie comes to mind when trying to interpret this winter’s flurry of healthcarerelated announcements: • CVS Health to acquire Aetna (Dec 3). • Advocate Health to merge with Aurora Health Care (Dec 4). • UnitedHealth Group to acquire DaVita Medical Group (Dec 6). • Dignity Health to merge with Catholic Health Initiatives (Dec 7). • Ascension rumored to be talking merger with Providence St. Joseph (Dec 10). • Humana Inc./Kindred at acquire Home Division of Kindred Healthcare (Dec 19).
March 2018 | The Journal of Healthcare Contracting
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STOP MAKING SENSE
What do these events mean for healthcare providers? For distributors
role of large health systems due to
and manufacturers of medical products and equipment?
their leverage as both insurer and physician provider.”
The Journal of Healthcare Contracting couldn’t make sense of it all, so we
Insurers such as UnitedHealth
asked the following experts and observers to try to do so for us…and
“have not built up a large asset
base of hospitals and operating
• Mark Dixon, president, The Mark Dixon Group LLC, Edina, Minnesota.
room suites that need to be filled
• Ted Almon, chairman, Claflin Co, Warwick, Rhode Island.
to make them profitable,” says
• Blair Childs, senior vice president of public affairs, Premier Inc.
Dixon. “Thus, they are asset-light
• John Pritchard, publisher, Journal of Healthcare Contracting.
in comparison to large IDNs. And,
• Tom Charland, founder and chief executive officer, Merchant
they are the insurer, so they pre-
Medicine, a management consulting firm (who shared an article
sumably can direct more of their
from the company’s January 2018 “January ConvUrgentCare®
appropriate patient volume to
those physicians and contracted
• Melinda Hatton, general counsel, American Hospital Association.
(or leakage is lower).”
The ‘asset-light provider’ “The CVS/Aetna agreement is all about consumerism and redefining
where care will be delivered in a more convenient way and at a lower
“Certainly, this level of consolida-
cost,” says Mark Dixon. “Much of healthcare is organized around doctors
tion in all segments of the indus-
and hospitals, and this transaction will appeal to younger consumers
try is unprecedented, and it is tak-
and redefine where people receive their care.”
ing place not only among players
The United/DaVita deal is “another very fascinating merger,” he adds. United/Optum has quietly hired 30,000 physicians over the past several years in the U.S., he points out. “This acquisition doubles that and dramatically increases their provider footprint. This has the potential of also redefining insurers as asset-light providers. They can purchase, on a fee-for-service basis, the hospitals and other expensive services as they need them. It has the potential to lower costs and also redefine/possibly diminish the 10
facilities. Thus, keepage is higher
“This has the potential of also redefining insurers as asset-light providers. They can purchase, on a feefor-service basis, the hospitals and other expensive services as they need them.” – Mark Dixon
in various segments of the vast industry, but across some seemingly significant barriers, and between players of all sizes and types,” notes Ted Almon, chairman of Claflin Co. “It certainly defies any simplistic analyses of singular changes in the market. In fact, while individual deals all have apparent rationales behind them, collectively, the activity could best be described as chaotic.” “Without any political editorializing at all, it is hard to avoid the coincidence of the Trump election March 2018 | The Journal of Healthcare Contracting
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STOP MAKING SENSE
and all this activity,” says Almon. “There is no doubt that profound un-
the traditional model? With
certainty over the direction of health policy in the country has provided
the seemingly endless assault
much of the energy driving the merger mania. Some of it may be a per-
of Amazon, could one imagine
ceived opportunity to set policy direction in the seeming void that ex-
that CVS plans for the day when
ists, but that much of it arises out of fear seems at least as likely. In the
their prime real estate locations
final analysis, a single question still looms: Are the new and much larger
could be used for something
players who arise from the combinations going to be more capable of
more profitable than selling pa-
integrating and organizing healthcare in a new and possibly more ef-
per towels and greeting cards?
ficient way, thus possibly creating some savings opportunities? Or are
For now, we will just have to wait
they merely going to create pricing leverage over a payment system no
longer capable of contracting around them, possibly driving up costs
Closer to the patient
even further? The CVS/Aetna combination is worth watching, continues Almon. “Certainly, it is the vertical aspect of the deal – CVS being a giant pharmacy retail chain, Aetna a health insurance company – that is most interesting. In wake of the failed Aetna/Humana merger (attempted in February 2017), such business combinations have historically not drawn much regulatory attention. But what is the strategy behind the deal? Where is the potential synergy? One must take a pretty highlevel perspective to guess where this combination is going. Remember that CVS voluntarily exited the presumably
In the final analysis, a single question still looms: Are the new and much larger players who arise from the combinations going to be more capable of integrating and organizing healthcare in a new and possibly more efficient way?”
“The CVS/Aetna deal and other
– Ted Almon
and population health is here to
mega deals are all sending a clear message: A new form of healthcare competition is emerging, and providers need to take note,” says Blair Childs, Premier Inc. “The CVS/Aetna merger is based on the belief that the combined company will be able to disrupt the system with a retail, pharmacy and e-enabled high-value provider network. “These mergers and acquisitions are being driven by a need for scale and vertical integration. Healthcare leaders see that the movement to value-based care
of selling tobacco products over a
stay in the public sector, and pri-
year ago, announcing its intention to become a ‘healthcare company.’
vate companies are now getting
Assuming this move follows on that, and combining it with the com-
on board. Companies are seeking
pany’s industry-leading 1,100 MinuteClinic locations in its stores, could
to 1) find more cost-effective, con-
a whole new model of delivering care be the vision?
venient and high-quality ways to
“Or how about a health plan that integrates the retail clinics into
manage a population, 2) organize
its primary care coverage, avoiding some more expensive sites in
high-value providers networks, March 2018 | The Journal of Healthcare Contracting
STOP MAKING SENSE
and 3) attract, engage and retain their patient population. All of these
The supply chain implications
companies are trying to get closer to the patient, a position hospitals al-
of such mergers are fascinating,
says Pritchard. As they come to-
“Health systems are also seeking scale and vertical integration, and
gether, IDN leaders have to make
are increasingly partnering with private payers and other health sys-
big decisions: Will one of the
tems to continue to develop high-value provider and financing net-
system’s supply chain processes
works. These will be organized and run by competing health systems,
prevail? If so, whose? Will they
insurers, physicians, and retail establishments.
run autonomously for a period of
“To ultimately succeed, healthcare leaders need to, above all else,
time? How long? And then what?
excel at using data to cost-effectively manage a population, and
“The other question I would
create systems to attract and engage patients and consumers,” says
ask is, ‘Who is all this good for?’” he says. “Is it the shareholder?
“The CVS/Aetna merger is based on the belief that the combined company will be able to disrupt the system with a retail, pharmacy and e-enabled high-value provider network.” – Blair Childs
The patient? The payer? As the healthcare systems, in particular, merge, will their larger footprints allow them to scale up worldclass healthcare? I’d like to think so, but that may be tough to do for a period of time.”
Retail clinics “One line of thought, highlighted by most articles on the subject, is
Childs. “It is important that Washington not impede the development
the prospect that Aetna and CVS
of this new era of competition through zealous antitrust regulation or
intend to leverage the Minute-
Clinic platform to deliver lowercost healthcare,” writes Charland
in his January report. “Two as-
The potential mergers among the six large IDNs (Dignity Health/Catho-
pects of the MinuteClinic foot-
lic Health Initiatives, Advocate Health Care/Aurora Health Care, and As-
print would indicate that this has
cension/Providence St. Joseph) bring to mind the question, How big is
nothing to do with the merger.
big enough? says John Pritchard of the Journal of Healthcare Contracting. “Whatever constitutes true scale must be ever-rising,” he says.
“First, CVS has more than 8,000 stores. Only 1,104 of them have a
But these IDNs aren’t pursuing scale in order to gain leverage and
MinuteClinic, and those are con-
purchasing clout, Pritchard says. That may be an unintended conse-
centrated in the largest 100 met-
quence, “but that’s not why they’re doing it. They are absolutely merg-
ro areas in the United States. It
ing to gain greater negotiating power vis a vis payers.”
will take a much greater footprint March 2018 | The Journal of Healthcare Contracting
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ENVIRONMENT OF CARE
STOP MAKING SENSE
of MinuteClinic locations and a much wider scope of services to pull off
patients’ needs,” says Melinda
a full court press on lowering costs using this strategy.
Hatton, general counsel, Ameri-
“Second, there was no evidence of MinuteClinic expansion in 2017 to go along with this merger.
pitals aren’t alone: The decision
“What is more likely is that CVS Health is aiming to compete directly
by CVS to acquire health insurer
with UnitedHealth Group in terms of the integration of pharmacy and
Aetna is being defended on the
grounds that it will build a care
Regarding medical benefits integration, Charland suggests compar-
system closer to consumers that
ing the CVS/Aetna proposed merger with that of UnitedHealth Group
is more responsive to their needs.
and Da Vita Medical Group. “This company (that is, UnitedHealth Group) has an insurance arm – United Healthcare – which looks a lot like Aetna; and a healthcare services arm – Optum– that has a [pharmacy benefit management provider] that looks a lot like CVS’ Caremark subsidiary. Optum also has a clinic/provider network that is significantly larger than
“Those same goals are driv-
“Health systems are absolutely merging to gain greater negotiating power vis a vis payers.” –John Pritchard
what CVS has right now.
ing some hospitals and health systems to join together. According to a 2017 economic study from Charles River Associates, hospital mergers result in significant cost savings and appreciable quality improvements that cannot be replicated by looser affiliations. They can also expand the types of services available to patients and com-
“If we were to predict what happens from here, it would be that CVS
munities, and provide a stable
Health begins to expand its clinic and provider network well beyond
foundation on which to deliver
the retail clinic space, i.e. urgent care, primary care and specialty care
more comprehensive, coordinat-
expansion. The next big wave in healthcare will be the move to at-risk
ed, and convenient care. In some
payment models sold directly to employers and government.
communities, mergers may be
“CVS Health, Aetna, Optum and UnitedHealthcare are extremely
the only practical way to preserve
adept at selling to those channels. As their provider networks expand,
services and enhance quality. As
this will be a major threat to hospital systems across the country. These
hospitals and health systems re-
companies will nip away at the profitable ambulatory care services while
align to meet these goals, they
leaving hospitals with their not-so-profitable inpatient services. Notice
have been leaders in controlling
Optum is not acquiring hospitals!”
costs, with hospital price growth,
Hospitals and health systems are prepared
can Hospital Association. “Hos-
as measured by the Hospital Producer Price Index, just 1.2 per-
“Rapid changes in the healthcare field are leading many hospitals
cent in 2016, the second-slow-
and health systems to explore new ways to improve quality, reduce
est rate since 1998 and down
costs, and provide more convenient access to care to meet their
from 3.5 percent in 2007.” March 2018 | The Journal of Healthcare Contracting
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STOP MAKING SENSE
Fast and furious The merger and acquisition announcements came fast and furious this winter. December 3: CVS and Aetna. CVS Health and Aetna announced the execution of a definitive merger agreement under which CVS Health would acquire all outstanding shares of Aetna for a combination of cash and stock. A “personalized healthcare experience” will be delivered by connecting Aetna’s provider network with greater consumer access through CVS Health, according to the two companies. This includes more than 9,700 CVS Pharmacy locations and 1,100 MinuteClinic walk-in clinics as well as further extensions into the community through Omnicare’s senior pharmacy solutions, Coram’s infusion services, and the more than 4,000 CVS Health nursing professionals providing in-clinic and homebased care across the nation. December 4: Advocate Health Care and Aurora Health Care. Chicago-based Advocate and Milwaukee-based Aurora announced their intention to merge. The new organization would operate 27 hospitals, more than 500 sites of care, and employ more than 3,300 physicians and 70,000 associates and caregivers. (The deal was approved by the Federal Trade Commission in February.) December 6: UnitedHealth Group and DaVita Medical Group. Optum, part of UnitedHealth Group, announced its intention to acquire DaVita Medical Group, one of the nation’s leading independent medical groups and a subsidiary of DaVita Inc., for approximately $4.9 billion in cash. DaVita Medical Group serves approximately 1.7 million patients per year through nearly 300 medical clinics, 35 urgent-care centers and six outpatient surgery centers. “With medical groups in California, Colorado, Florida, Nevada, New Mexico and Washington,
DaVita Medical Group will expand the market reach of Optum’s strategic care delivery portfolio, including Surgical Care Affiliates, MedExpress and HouseCalls,” the companies said. December 7: Dignity Health and Catholic Health Initiatives. Englewood, Colo.-based Dignity Health and San Francisco-based CHI announced their intention to merge, creating a system encompassing more than 700 care sites and 139 hospitals across 28 states. December 10: Ascension and Providence St. Joseph. The Wall Street Journal reported that the two hospital systems were discussing a merger that would create an entity encompassing 191 hospitals in 27 states and annual revenue of $44.8 billion. Ascension operates across 22 states and the District of Columbia, including Texas and Washington, where Providence also operates. Providence also has hospitals in Alaska, California, Montana, New Mexico and Oregon. (No news from these two at press time. However, in February, Ascension and Arlington Heights, Illinois-based Presence Health signed a definitive agreement for Presence Health to join Ascension and become part of AMITA Health, a joint venture of Ascension’s Alexian Brothers Health System and Adventist Midwest Health, part of Adventist Health System.) December 19: Humana and Kindred Healthcare. Humana Inc. announced it signed a definitive agreement to acquire a 40 percent minority interest in the Kindred at Home Division of Kindred Healthcare, Inc., said to be the nation’s largest home health provider and second largest hospice operator, for approximately $800 million. Currently, nearly 40,000 caregivers serve approximately 130,000 patients daily in Kindred at Home with annual revenues of approximately $2.5 billion.
March 2018 | The Journal of Healthcare Contracting
Guidance for the outpatient lab A good distributor representative can guide even the most seasoned outpatient-lab professionals Carolyn Blair has worked in a
Charles Powell, M.D., mean-
Despite all those combined
lab for about 40 years, first as a
while, has been practicing medi-
years of experience, Blair and
phlebotomist, then as a hema-
cine for 19 years, including 16
Powell still draw on the expertise
tology supervisor in the hospital
years in the Army and Navy. To-
and knowledge of their primary
setting, and today as laboratory
day, he is executive vice president
distributor â&#x20AC;&#x201C; McKesson Medical-
manager of the Diagnostic Clinic
of clinical operations for Health-
Surgical â&#x20AC;&#x201C; to help keep their labs
of Longview (Texas).
care Associates of Texas in Irving.
The Journal of Healthcare Contracting | March 2018
Sponsored by McKesson Medical-Surgical
Diagnostic Clinic of Longview
its current chemistry analyzer –
Founded more than 35 years ago,
we’ve had in my 22 years here” –
DCOL is a multispecialty physi-
after visiting a user in Oklahoma.
cian group practice that includes
Staffing is a challenge for
18 locations, more than 90 phy-
DCOL, as it is for other labs, says
sicians and 30 mid-level provid-
Blair. Finding well-qualified peo-
ers. The majority of its lab work
ple takes time and effort. Add to
is performed in the central lab in
that the stress associated with
Longview, but outlying locations
running a lab today, with all the
have phlebotomy draw stations
required regulations, and provid-
and perform point-of-care test-
ing comprehensive training to
ing as needed. The lab performs
which Blair describes as “the best
more than 1 million tests per year.
“That’s why, in the end, it’s im-
“Evan comes by once a week,”
portant find a good rep like Evan,”
says Blair, referring to McKesson
she says. “He’s kind of old school;
Medical-Surgical Account Man-
not many account managers come
ager Evan Stanley. “My chemistry
around once a week like he does.
tech sends orders on Monday;
We really depend on him, and it
Evan comes in on Wednesday,
takes a lot of stress off us, knowing
walks through the lab, and we let
we will receive what we ordered in
him know what is needed. Every-
a timely manner. Any time we have
thing is delivered on Thursday.
issues, I’ll ask him, ‘Have you heard
“Rarely is it not here on Thursday,” she adds.
of this before?’ or ‘Do you have a customer with this problem?’”
Stanley is quick to put Blair in
Stanley guides DCOL in choos-
touch with directors and techs
ing instruments. “That’s very im-
from labs that may be using a
portant to us, because we want
piece of equipment in which she
to keep our instruments for as
has an interest. “He is always tell-
long as possible” says Blair. “We
ing me what’s out there, and he
want to make sure we’re making
lets me be the judge,” she says.
the best decision for our needs.”
“He takes us to other labs and
He also helps the lab identify
gives us time to talk to the techs,
reliable service options when
to ask questions, to see how they
needed. “When you run the vol-
feel about it – and he doesn’t
ume of tests we do in a 12-hour
hover over us.” DCOL acquired
period, fast and efficient service
is very important. Evan helps us
will include a 60,000-square-foot
were OK businesspeople, but it
get any assistance we may need
facility housing an ambulatory sur-
was time to bring in some heavi-
regardless of what brand equip-
gery center and medical offices.
er guns,” in the form of private
ment we purchased.”
Healthcare Associates of Texas Healthcare Associates of Texas is on the move. Founded 26 years ago by two doctors and one office, HCAT now has 48 providers, and it intends to double that number by the end of 2018. This summer, HCAT will move into a new “mother ship,” a 95,000-squarefoot facility providing primary care and specialist services, imaging, laboratory, nerve conduction, urodynamic and sleep studies, and more. Phase II of the construction
“We grew to three locations on
equity firm Webster Capital. “Our
our own dime,” says Powell. “Then
concept is to grow by acquisition
we realized that, as doctors, we
and organic growth, and they will help us with both.”
McKesson helps HCAT maintain what Powell describes as “that very fine balance” between too much inventory on the shelves, and shortages, which can jeopardize patient care.
project, set to begin later in 2018,
Powell actually prefers the word “integration” to “acquisition” when speaking about new clinics. “We wouldn’t buy a practice if things weren’t already working,” he says. “We like to step in and adopt those things that are working well, and bring in solutions of our own that can improve operations.” One of those “solutions” is McKesson Medical-Surgical Account Manager Jonathan Poulin, who began servicing HCAT five and a half years ago.
“As we have grown, McKesson has made sure that Jonathan is the representative for the new facilities,” says Powell. “He visits the locations, reviews their practices, including what lab tests they do, and works on standardizing supplies and equipment through HCAT, which gives us economy of scale.” He also helps HCAT decide which tests formerly done in the facility or sent out to a reference lab may be performed more efficiently at HCAT’s central lab. “Doctors love it,” says Powell, referring to the central lab. “Turnaround
multiple diseases in an hour. Its GI
“Having accurate and comprehensive test results in one hour enables physicians to immediately prescribe treatment protocols that target the specific infections, rather than administering a wide-spectrum antibiotic, which may not be necessary.” – Charles Powell, M.D.
times are faster, they have more
panel, for example, identifies 22 disease targets for bacterial, viral and parasitic gastroenteritis infections; its respiratory pathogen (RP) panel identifies 20 viral and bacterial respiratory pathogens. “Not every patient needs that test, but using it in a responsible manner will improve patient care,” says Powell. “Having accurate and comprehensive test results in one hour enables physicians to immediately prescribe treatment protocols that target the specific infections, rather than administering a wide-spectrum antibiotic, which
control over their panels, and it’s
patient care. McKesson has also
seamless for the patients.”
played a key role in helping HCAT
For a growing physician prac-
McKesson helps HCAT maintain
upgrade its lab equipment. In July,
tice or health system, continuity in
what Powell describes as “that very
for example, they helped HCAT
the supply chain is critical. Carolyn
fine balance” between too much
implement the FilmArray system
Blair and Charles Powell believe
inventory on the shelves, and
from BioFire, a molecular labora-
they have found it, with help from
shortages, which can jeopardize
tory instrument that can identify
may not be necessary,” he says.
Help wanted Your outpatient labs need you.
As a supply chain executive, you may not be conversant with hematology, chemistry, immunoassays, analyzers, molecular testing, point-of-care testing or CLIA. You may not be familiar with the supplychain-related demands of the typical outpatient lab. 23
And yet, chances are, your
operational and financial efficien-
Purchasing efficiencies are also
health system has been actively
cies and delayed care to patients
sacrificed, as without a strong
with lower quality outcomes.
formulary, the opportunity to ne-
surgery centers, urgent care cen-
Having a distribution partner
gotiate for best price tier from the
ters, even retail clinics, over the
who understands the complexi-
distributor or manufacturer may
past few years. And with each
ties encountered with acquisition
one comes a lab.
and consolidation and the ben-
Glass adds, “As health systems
efit of an integrated lab strategy
acquire more and more sites,
is essential to healthcare delivery
things can become increasingly
in today’s environment.
disorganized. There may be no
standardization of products or
A key pillar
processes. You might find a hun-
“Laboratory is a key pillar to suc-
dred non-acute locations, each
cess with value-based-care pro-
one ordering from a different
grams from government and
vendor, ordering different tests,
private payers alike,” says Patrick
and employing different supply
Bowman, Director, Strategic Ac-
counts, Lab, McKesson Medical-
Health system administrators
Surgical. “A significant amount of
– including supply chain execu-
Source: The Impact of Diagnostics on Healthcare Outcomes, Health Industry Distributors Association.
a health system’s revenue is based
tives – might assume (or hope?)
all those non-acute operations
“Having lab testing close to the
grams, which essentially score an
are taking care of themselves,
point of the patient encounter
organization’s ability to achieve
Glass says. “And they are … but
with immediate results, diagnosis
certain benchmarks, many of
they might not be doing a very
and treatment in the non-acute
which require both a higher level
good job of it.”
space of the health system can be
of patient compliance and com-
an essential component in achiev-
pleted laboratory results.”
Point of care
Lack of control over those labs
Some healthcare systems opt to
can have negative operational, fi-
pull all testing out of the non-acute
says Lynn Glass, Vice President of
nancial and clinical consequences.
clinics and into a central lab, says
Strategic Accounts, Lab, McKes-
“Having multiple laboratory
Bowman. “I think the easy answer
son Medical-Surgical. ”Failure to
products that execute the same
for many is, ‘We have this hospital
fully integrate a lab strategy that
function can result in clinical inef-
lab that runs like a well-oiled ma-
addresses standardization, up-
ficiencies, as not all tests replicate
chine, so we can do our tests there
grade in product, and efficien-
the same result and range,” he
at a fraction of the cost.’”
cies impacts both supply chain
says. “This leads to both confu-
But doing so can lead to unac-
and patient care with decreased
sion and potential misdiagnosis.
ceptable delays getting results,
ing higher quality outcomes and increased
making a diagnosis, and begin-
experience, and also addresses
ning treatment, he says. What’s
management of the chronic dis-
more, a high percentage of pa-
ease patient population.
tients – particularly those with chronic conditions – fail to comply
Supply chain’s role
with instructions to go to a central
Just as they must in the hospi-
lab for a test. That’s a problem, be-
tal, supply chain executives must
cause patient compliance and en-
work as part of a team to take
gagement are in direct correlation
control of the scattered non-
with better patient outcomes.
“It’s important to see the big
“Decisions on non-acute lab
picture, to have a strategy,” he
strategy should be made by com-
says. “Keep as close to the cli-
mittee, which will often include
nicians as possible those tests
representation from nursing staff,
whose results are needed quick-
medical leadership, supply chain,
ly,” even if the nominal cost of
finance and the laboratory direc-
running them at the central lab
tor or manager,” says Bowman. “A
might be less.
committee of this size and scope
Patient Satisfaction: Top Three Reasons a Provider Failed Expectations Unable to Get Laboratory Test Results in Same Visit / Appointment Wait Time to Receive Care Speed of Diagnosis
Source: 2016 HIDA Horizon Millennials As Healthcare Consumers
“It’s important to address and
is essential, because non-acute
provide healthcare in conjunction
laboratory testing can greatly
with value-based care,” adds Glass.
impact each of their respective
Utilizing point-of-care lab testing
areas of responsibility.”
provides immediate diagnosis,
A distributor with experience
treatment and a higher quality of
in the non-acute lab setting can
care. This will impact both reim-
help the team make sound deci-
bursement and the overall patient
sions. For example, McKesson can 25
help supply chain executives take control of the non-acute continuum through improved supply chain operations, stronger financial performance and building a clinical infrastructure that leads to better outcomes. “A large hospital lab operates very differently than lab in the non-acute space of a health system,” says Glass. “A distributor with the capability of servicing
afford best contracting and pric-
An acute hospital lab is likely to have semi-trucks backing up to their dock and delivering supplies once a week. But the larger system might have 50 to 100 sites with ongoing needs for point-of-care lab supplies.
the large hospital may not have
ing. McKesson can sequester specific lots of reagents, supplies and controls, then deliver them to the non-acute sites as space allows. “We’re more than a distributor,” says Glass. The company’s strategic account teams, point-of-care specialists, lab equipment specialists, consultants and technology resources can help health systems implement solutions that drive increased revenues, operational and
the same level of expertise in the
knows how to pack and ship in
financial efficiency, and a higher
non-acute sites. Adds Bowman,
small quantities, while maintain-
quality of care to the patient with
“The delivery model is key in this
ing product integrity throughout
better clinical outcomes and higher
space. An acute hospital lab is
likely to have semi-trucks back-
McKesson supply chain opera-
“It’s a matter of changing
ing up to their dock and deliver-
tions has a storage and delivery
the conversation, changing the
ing supplies once a week. But the
model that can efficiently provide
whole process by which lab ser-
larger system might have 50 to
cold chain storage and delivery,
vices are provided and collabo-
100 sites with ongoing needs for
lot track and trace, lot sequestra-
rating to determine a new strate-
point-of-care lab supplies. They
tion and shipments in low units of
gy that best serves their patients
need a vendor that can deliver in
measure, and additionally has re-
and provides the highest quality
vans to all those sites, and who
lationships with prime vendors to
in lab testing.”
The Future of Non-Acute Care – Is your supply chain ready to perform?
Primary Care Practice
Long Term Care
Dialysis & Infusion
CHC Home Health Agency
Ambulatory Surgery Center
Home Medical Equipment
As care shifts to non-acute facilities*
of patient visits happen beyond the hospital
To address the unique needs of non-acute care, your supply chain needs to deliver — and without your clinicians playing shipping manager in between seeing patients. With McKesson MedicalSurgical’s supply chain technology, you can return clinical hours to patient care, increasing productivity while controlling costs. From inventory management and automation to systems integration and contract management, take delivery of greater efficiency for your non-acute supply chain today. Let McKesson Medical-Surgical help drive inefficiencies out of your supply chain. Visit mms.mckesson.com or call 866.MCK.ANSWer. *Source: Health, United States, 2015. US Department of Health and Human Services, Centers for Disease Control and Prevention. © 2017 McKesson Medical-Surgical Inc. All rights reserved.
Colorectal Cancer Early detection is key
Colorectal cancer is the second-leading cause of cancer
choice in colorectal cancer screening strat-
death in the United States, according to the U.S. Preventive Ser-
egies may increase screening uptake.
vices Task Force. In 2016, when the USPSTF issued its most re-
The benefit of early detection of and in-
cent set of screening recommendations, an estimated 134,000
tervention for colorectal cancer declines af-
persons were likely to be diagnosed with the disease, and about
ter age 75 years, says USPSTF. Among older
49,000 were expected to die from it.
adults who have been previously screened
Colorectal cancer is most frequently diagnosed among adults aged 65 to 74 years; the median age at death from colorectal cancer is 73 years. The USPSTF found convincing evidence that screening for colorectal cancer in adults aged 50 to 75 years reduces colorectal cancer mortality. However, about one-third of eligible adults in the United States have never been screened for colorectal cancer. Offering 28
There is convincing evidence that colorectal cancer screening substantially reduces deaths from the disease among adults aged 50 to 75 years, and that not enough adults in the United States are using this effective preventive intervention.
for colorectal cancer, there is at best a moderate benefit to continuing screening during the ages of 76 to 85 years. However, adults in this age group who have never been screened for colorectal cancer are more likely to benefit than those who have been previously screened. The time between detection and treatment of colorectal cancer and realization of a subsequent mortality benefit can be substantial. As such, the benefit of early detection of and intervention for colorectal cancer in adults 86 years and older is at most small. March 2018 | The Journal of Healthcare Contracting
DEDICATION makes all the difference. Partnering with Terumo brings our expertise and care to you, your clients and ultimately where it matters most. Our SurGuard®3 safety hypodermic needle offers some very convincing benefits. Decrease healthcare costs: 20%* less expensive than the leading hinged safety hypodermic product. Standardize operations: A broad range of product sizes and three modes to meet every clinician’s style make it simpler to standardize with Terumo. Improve patient outcomes: Patients benefit from a more comfortable injection, as our needles are 10%* sharper than the market leader. Increase OSHA compliance and reduce liability: Safety mechanism includes a lock for both the needle and hub, and is designed to minimize the ability to be removed. We want to hear from you! Find your Terumo representative – call 1-800-888-3786, email TMPsupport@terumomedical.com or visit us online at www.terumotmp.com.
TERUMO and SurGuard are trademarks owned by Terumo Corporation, Tokyo, Japan, and are registered with the U.S. Patent and Trademark Office. ©2017 Terumo Medical Corporation 11/17. All rights reserved. Accession TMP-0325-11152017. *Data on file. Terumo Medical Products, April 2016.
Screening recommendations In June 2016, the U.S. Preventive Services Task Force
aged 50 to 75 years, and 2) not enough
updated its recommendations regarding colorectal cancer
adults in the United States are using this
screening. Eight years earlier, the USPSTF had recommended
effective preventive intervention.
screening with colonoscopy every 10 years, annual FIT, annual
Note that recommendations made by
high-sensitivity FOBT, or flexible sigmoidoscopy every five years
the U.S. Preventive Services Task Force
combined with high-sensitivity FOBT every three years.
are independent of the U.S. government.
In the current recommendation (below), instead of empha-
They should not be construed as an offi-
sizing specific screening approaches, the USPSTF chose to high-
cial position of the Agency for Healthcare
light the convincing evidence that 1) colorectal cancer screen-
Research and Quality or the U.S. Depart-
ing substantially reduces deaths from the disease among adults
ment of Health and Human Services.
Adults aged 50 to 75 years
The USPSTF recommends screening for colorectal cancer starting at age 50 years and continuing until age 75 years.
A (There is a high certainty that the net benefit is substantial.)
Adults aged 76 to 85 years
The decision to screen for colorectal cancer in adults aged 76 to 85 years should be an individual one, taking into account the patient’s overall health and prior screening history. • Adults in this age group who have never been screened for colorectal cancer are more likely to benefit.
C (The USPSTF recommends selectively offering or providing this service to individual patients based on professional judgment and patient preferences. There is at least moderate certainty that the net benefit is small.)
• Screening would be most appropriate among adults who 1) are healthy enough to undergo treatment if colorectal cancer is detected and 2) do not have comorbid conditions that would significantly limit their life expectancy.
Source: U.S. Preventive Services Task Force, June 2016 (https://www.uspreventiveservicestaskforce.org/ Page/Document/RecommendationStatementFinal/colorectal-cancer-screening2#tab) 30
March 2018 | The Journal of Healthcare Contracting
Colorectal cancer screening strategies Screening Method
Evidence of Efficacy
High-sensitivity versions have Does not require bowel preparation, anesthesia, or transportation superior test performance characteristics than older tests. to and from the screening examination (test is performed at home)
Improved accuracy compared Does not require bowel preparation, anesthesia, or transportation with gFOBT. Can be done to and from the screening examiwith a single specimen nation (test is performed at home)
Every 1 or 3 yearsd
Specificity is lower than for FIT, resulting in more falsepositive results, more diagnostic colonoscopies, and more associated adverse events per screening test. Improved sensitivity compared with FIT per single screening test
There is insufficient evidence about appropriate longitudinal follow-up of abnormal findings after a negative diagnostic colonoscopy; may potentially lead to overly intensive surveillance due to provider and patient concerns over the genetic component of the test.
Direct Visualization Tests Colonoscopyc
Every 10 years
Requires less frequent screening. Screening and diagnostic followup of positive results can be performed during the same examination.
Every 5 years
There is insufficient evidence about the potential harms of associated extracolonic findings, which are common
Every 5 years
Flexible sigmoidoscopy with FITc
Flexible sigmoidoscopy every 10 years plus FIT every year
Modeling suggests it provides Test availability has declined in the United States less benefit than when combined with FIT or compared with other strategies Test availability has declined in the United States. Potentially attractive option for patients who want endoscopic screening but want to limit exposure to colonoscopy.
Abbreviations: FIT=fecal immunochemical test; FIT-DNA=multitargeted stool DNA test; gFOBT=guaiacbased fecal occult blood test. Source: U.S. Preventive Services Task Force, June 2016 (https://www.uspreventiveservicestaskforce.org/ Page/Document/RecommendationStatementFinal/colorectal-cancer-screening2#tab) 32
March 2018 | The Journal of Healthcare Contracting
Whatâ&#x20AC;&#x2122;s ahead for FIT? Testing for novel protein biomarkers in stool finds sig-
from controls. By using a combination
nificantly more colorectal cancers (CRC) and advanced adeno-
of four novel protein biomarkers, in this
mas (precursors to cancer) compared to testing for hemoglobin
study the investigators found that they
alone, according to researchers from the Netherlands Cancer
were able to detect almost twice as
Institute and VU University Medical Center, and published in
many colorectal cancers and five times
Annals of Internal Medicine in November 2017.
as many advanced adenomas, com-
The proteins can be detected in a small sample of the fecal immunochemical test (FIT), which suggests that they can be applied in population screening.
pared to using hemoglobin alone. According to the researchers, this new test has the potential to be easily inte-
The researchers sought to identify novel protein biomark-
grated into population-wide screening
ers in stool that could outperform or complement hemoglo-
programs upon successful clinical valida-
bin in detecting CRC and advanced adenomas. They used
tion. Because it uses the same technol-
mass spectrometry to search for proteins that were present in
ogy as the current standard stool-based
stool specimens from persons with CRC or advanced adeno-
test, few adjustments to the screening
mas, and which were virtually absent from stool specimens
program would be needed.
The Journal of Healthcare Contracting | March 2018
dimensions of care and service. Because so many plans collect HEDIS data, and because the measures are so specifically defined, HEDIS makes it possible to compare the performance of health plans on an “apples-to-apples” basis. First established in the late 1980s, HEDIS measures address a broad range of health issues, such as persistence of beta-blocker treatment after a heart attack, controlling high blood pressure, comprehensive diabetes care and breast cancer screening. Included in HEDIS is the CAHPS® 5.0 survey, which measures members’ satisfaction with their care in areas such as claims processing, customer service, and getting needed care quickly. “CAHPS” is
HEDIS updates address transitions of care Opioid usage and telehealth are also key points
an acronym for “Consumer Assessment of Healthcare Providers and Systems.” Health plans use HEDIS results to see where they need to focus their improvement efforts. In addition, many health plans report HEDIS data to employers or use their results to make improvements in their quality of care and service. Employers, consultants, and consumers use HEDIS data, along with accreditation in-
Ensuring a smooth continuum of care for discharged
formation, to help them select the best
hospital patients, curbing opioid usage, and telehealth were all
health plan for their needs. Many plans
on the minds of the National Committee for Quality Assurance
commonly include HEDIS compliance
(NCQA), as it issued new technical specifications for the 2018
targets into payment contracts with pro-
edition of the Healthcare Effectiveness Data and Information
viders, reports America’s Health Insur-
Set, or HEDIS. The specifications include seven new measures,
ance Plans, or AHIP.
changes to several existing measures and two cross-cutting topics, which address issues across multiple measures. HEDIS is a tool used by more than 90 percent of America’s health plans to measure providers’ performance on important 34
HEDIS results are included in Quality Compass, a web-based comparison tool that allows users to view plan results and benchmark information. March 2018 | The Journal of Healthcare Contracting
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5. Use of opioids from multiple pro-
The newest additions to HEDIS are designed to address emerg-
viders. This measure assesses the rate
ing health needs and evolving processes in care delivery, ac-
of health plan members 18 years and
cording to NCQA.
older who receive opioids from multiple prescribers and multiple pharma-
1. Transitions of care. This measure is designed to improve care
cies. According to NCQA, high dosage,
coordination during care transitions for at-risk populations,
multiple prescribers and pharmacies
including older adults and other individuals with complex health
are all risk factors for dangerous over-
needs, according to NCQA. It assesses percentage of inpatient
dose and death.
discharges for Medicare members 18 years and older who had each of the following during the measurement year:
6. Depression screening and follow-up
• Notification of inpatient admission.
for adolescents and adults. This mea-
• Receipt of discharge information.
sure assesses the percentage of health
• Patient engagement after inpatient discharge.
plan members 12 years and older who
• Medication reconciliation post-discharge.
were screened for clinical depression and, if screened positive, received
2. F ollow-up after emergency department visit for people
follow-up care. It completes a set of
with high-risk multiple chronic conditions. This measure
three measures that address the needs
assesses the percentage of ED visits for Medicare members
of patients receiving care for depres-
18 years and older with multiple high-risk chronic condi-
sion: screening, ongoing monitoring,
tions and follow-up care within seven days of the ED visit.
and response to treatment.
This follow-up should ensure better coordination of diagnoses, medications and follow-up needs, says NCQA.
7. Unhealthy alcohol use screening and follow-up. This measure assesses the
3. Pneumococcal vaccination coverage for older adults. This
percentage of health plan members 18
measure assesses the percentage of health plan members
years and older who were screened for
65 years and older who received the recommended series of
unhealthy alcohol use and, if screened
pneumococcal vaccines: 13-valent pneumococcal conjugate
positive, received appropriate follow-up
vaccine and 23-valent pneumococcal polysaccharide vaccine.
care within two months.
The measure is designed to track more closely to updated Practices (ACIP) The measure also uses electronic data, and
Changes to existing measures
will one day supplant the current survey-based metric.
1. Immunizations for adolescents.
guidance from the Advisory Committee on Immunization
NCQA revised the human papilloma-
4. Use of opioids at high dosage. This measure assesses the
virus (HPV) vaccine rate to align with
rate of health plan members 18 years and older who re-
the updated Advisory Committee on
ceive long-term opioids at high dosage (average morphine
Immunization Practices guidelines,
equivalent dose >120mg).
which now permit a two-dose, rather March 2018 | The Journal of Healthcare Contracting
than three-dose vaccination schedule for adolescents.
5. Plan all-cause readmissions. NCQA developed a strategy to extend the existing Plan All-Cause Readmission (PCR) measure to the Medicaid population, essentially becoming a
2. Breast cancer screening. NCQA added digital breast tomosynthesis
new measure for Medicaid. NCQA expects the measure will especially useful to states as they assess quality.
(DBT) to the list of acceptable tests for breast cancer screening.
Cross-cutting topics 1. Telehealth for behavioral health measures. Telehealth is an
3. Initiation and engagement of alco-
effective, efficient way of delivering healthcare, and is becom-
hol and other drug abuse or depen-
ing widely reimbursed by payers such as health plans, states
dence treatment. NCQA updated this
and CMS, says NCQA. That’s why NCQA introduced telehealth
measure to include medication-assist-
in seven behavioral health measures for HEDIS 2018.
ed treatment (MAT) as an appropriate treatment for people with alcohol and
2. Excluding members in institutional care settings. NCQA
opioid dependence. The measure also
is excluding Medicare members enrolled in Institutional
adds telehealth to treatment options.
Special Needs Plans (I-SNPs) or who live long-term in institu-
Additionally, alcohol, opioid and other
tional care settings from the following measures:
drug dependencies are added as sub-
• Breast cancer screening.
groups for reporting (rate stratifica-
• Colorectal cancer screening.
tion) and the engagement timeframe
• Osteoporosis management in women
is extended from 30 to 34 days.
who had a fracture. • Controlling high blood pressure.
4. Identification of alcohol and other drug services. NCQA updated this
The listed HEDIS measures are appropriate for the age-de-
measure to include MAT as an appropri-
fined general population but not always for people who are
ate treatment for people with alcohol
frail or have mobility or other functional limitations, according
and opioid dependence, and report-
ing of measure rates by alcohol, opioid and other drug dependence diagnosis
Transitions of care
as subgroups; and for more granular
Mary Barton, vice president performance measurement, NCQA,
reporting, it separates outpatient, ED
discussed the importance of the “Transitions of care” measure
and telehealth services. NCQA says the
during a video chat on the organization’s website.
measures will give providers, consumers
For the patient, the days and weeks following discharge can
and plans better insight regarding ac-
be a vulnerable time, she said. “We’re concerned about medi-
cess to treatment services, and add clini-
cal errors. Maybe the patient’s medications were changed in
cally useful information about utiliza-
the hospital; maybe tests had been ordered during the hospital
tion of services for those with substance
stay, but the results were incomplete by the time of discharge.
There is a lot of opportunity for things to get dropped.”
The Journal of Healthcare Contracting | March 2018
To ensure what Barton referred to as a “clear connection between sites of care,” NCQA will be measuring how frequently – or if – primary care physicians are notified of an inpatient admission of one of their patients. The organization will also measure how complete the patient’s information is on the dis-
“EDs are excellent at taking care of the first thing that brought the patient in. But they’re not necessarily trained or staffed to do the kind of in-depth communication that a primary care team should do.”
in Medicare who are over 65, who have multiple chronic conditions,” she said. “They are vulnerable; they may be frail; they often have functional limitations; and when they go to the ED, they may experience a change in their medication, which needs to followed-up.” Also, there may be a multifactorial set of events that led to that ED visit. “EDs are excellent at taking care of the
charge record, so the next
first thing that brought the patient in,”
provider (primary care physician, long-term-care facility, etc.)
said Barton. “But they’re not necessar-
knows what has been done and what needs to be done.
ily trained or staffed to do the kind of
And finally, NCQA will measure how promptly the discharged
in-depth communication that a prima-
patient’s physician contacted him or her after discharge, to
ry care team should do.” For example,
make a follow-up appointment, if necessary. “We have to close
the patient may face socioeconomic
the loop on that patient’s care,” she said. After a hospital stay,
forces that led him or her to the ED,
with its steady stream of caregivers, a patient can feel alone. He
such as an eviction from their house
or she needs a primary care support team to guide him or her
through the next stage of recovery.
“We know there is a subset of patients
“We’re looking for evidence that an
Similarly, the measure “Follow-up after emergency depart-
ongoing care team took note of that ED
ment visit for people with multiple high-risk chronic conditions”
visit and circled that patient back to the
is designed to address the continuum of care, said Barton.
primary care setting.” March 2018 | The Journal of Healthcare Contracting
Better, faster. It’s what we want for patients.
What about your clinicians?
Connecting vital signs monitors to the EMR has been shown to: Y
Reduce errors caused by manual processes1
Save clinicians time by removing manual documentation steps2
Increase clinical time spent on value-added care3
Reduction in minutes of vital signs data latency in the EMR after connecting vital signs4
Welch Allyn partners with leading EMRs to send data from the Connex® family of vital signs devices directly to the patient’s record. Our goal is simple: help your clinicians work better, faster so they can focus on getting patients better, faster.
Start today at www.welchallyn.com. 1 CIN: Computers, Informatics, Nursing: Eliminating Errors in Vital Signs Documentation, FIELER, VICKIE K. PhD, RN, AOCN; JAGLOWSKI, THOMAS BSN, RN; RICHARDS, KAREN DNP, RN, NE-BC, 2013. The paper vital signs recording had an error rate of 18.75%. 2 JHIM FALL 2010 Volume 24:Number 4, Vital Time Savings: Evaluating the Use of an Automated Vital Signs Documentation System on a Medical/Surgical Unit 3 Going One Step Further at Scott & White Medical Center—Temple: Eliminating manual vital signs documentation to prioritize value-added care. 2017 Welch Allyn. www.welchallyn.com 4 CareAware® VitalsLink: Eliminating Data Latency & Manual Documentation at Naples Hospital. Prepared by Cerner, 2013. © 2017 Welch Allyn
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