ISMETT PERFORMANCE: EFFICIENT USE OF RESOURCES

ISMETT PERFORMANCE:
EFFICIENT USE OF RESOURCES
ISMETT: GOVERNANCE AND ORGANIZATIONAL STRUCTURE
ISMETT
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•
Public-private partnership between the Region of Sicily and UPMC.
Limited liability company: 55% Civico Hospital of Palermo (representing the Sicilian
Public Health Care System); 45% UPMC.
The facility belongs to Civico Hospital; UPMC has full responsibility for professional
and administrative management of ISMETT.
UPMC selects, hires and retains physicians, management and some technical staff.
ISMETT selects, hires and retains nurses and other clinical and technical staff.
Hospital operations are funded by the region on the basis of clinical, educational and
research activities performed
UPMC receives a fixed management fee and a fee based on clinical activity volumes.
•
•
•
•
•
2
SECOND ”FRAMEWORK AGREEMENT" BETWEEN REGION OF SICILY, CIVICO
AND CERVELLO HOSPITALS, AND UPMC INTERNATIONAL HOLDINGS
"The financial commitment herein defined and accepted by the Region of Sicily is also motivated and
finalized for the development and promotion of ISMETT’s role as:
(i) center of excellence and high clinical specialization;
(ii) support to other centers of the regional health system and academic and research institutions for
projects and collaborations focusing on the development of new procedures and technology solutions,
and medical and scientific training;
(iii) means for transfer and dissemination in Sicily, with the projects referred to above, of UPMC's
know-how and technology throughout the duration of the collaboration with UPMC;
(iv) consultant to the Region of Sicily for the development and implementation of these projects and
related research."
December 2003
With the Second Framework ISMETT is entrusted not only to provide patient care of
excellence, but also in an expanded role to improve the regional health system, research
and training. The mandate further distinguishes Ismett from other acute care hospitals in
Sicily and Italy.
3
ISMETT: CLINICAL, EDUCATIONAL AND RESEARCH PERFORMANCE
ISMETT MILESTONES OVER 15 YEARS SINCE INCEPTION

developed multiorgan transplantation, cardiothoracic and abdominal surgery programs with
outcomes among the best at national and international levels.

deduced the passive migration of patients outside of Sicily and treated patients from other Italian
regions and abroad.

attracted over €40 million in research grants.

attained research hospital status from the Ministry of Health

trained thousands of health care professionals using advanced methods (i.e. medical simulation
and telemedicine)

attracted to Sicily young highly educated italian health care professional and scientists.

attained JCI Accreditation
4
ISMETT: THE COST ISSUE
 The quality of care provided by ISMETT is well recognized and appreciated.
 The cost of ISMETT is perceived and represented as “too high” with
respect to the number of beds.
 ISMETT cost efficiency, when measured in terms of the complexity of the
clinical care provided, outpaces nearly all other hospitals in Italy across
various measures.
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METHODOLOGY FOR EVALUATION OF EFFICIENCY
“ DRG-weighted admissions seemed a more appropriate
approach versus the number of admissions or the total days
of hospital stay, as more akin to the idea of care that a
hospital should provide. Also, this is more coherent with the
current fees of acute care hospitals that provide for a
remuneration based on admissions and only partially on the
number of days of hospital stay.
DRG weighting allows to take into account the relative
complexity of admissions and therefore the degree of
cost absorption for each homogeneous diagnostic
related group.”
From: Technical Efficiency of Italian Public Hospitals”Economy and Finance Issues-Occasional Papers; Bank of
Italy-Eurosystem, 2008
Evaluating the efficiency is crucial to objectively assess the use
and allocation of resources. In order to compare the efficiency of
ISMETT with other acute care hospitals we used the same method
of a recent study performed by the Bank of Italy to assess the
technical efficiency of Italian public hospitals. This method uses
DRG weighting as a tool to assess the complexity of
performance.
6
DRG, COMPLEXITY AND REIMBURSEMENT
The DRG system classifies all patients discharged by a hospital in
homogeneous groups in terms of resource consumption. Different
diseases and procedures are grouped together when they use the same
amount of resources. This allows economic quantification of the use of
resources and reimbursements from each single care event. One of the
purposes of the system is to monitor and contain health care expenditure.
Each DRG has a numeric "weight" that represents the amount
reimbursed to the hospital by the health system. Diseases or services
are "weighted" based on the amount of the required resources
(staff, medications, etc.). Higher levels of complexity are associated
with higher reimbursements.
7
ad essere fra loro coerenti per classi omogenee, nelle analisi di secondo stadio verranno
comunque adoperate le stime del campione unico inserendo tra i fattori di controllo variabili
SIZE OF12HOSPITALS ANDcheCOMPLEXITY
OF ADMISSIONS
possano tenere conto della composizione
dell’output e in particolare della complessità
delle prestazioni.
Fig. 2
Fig. 1
SCALE PROFITS BASED ON NUMBER OF BEDS
I RENDI M ENTI DI SCALA I N BASE AI POSTI LETTO
(percentage
variance
compared
minimum
efficiency
scale)
(scostamenti
percentuali
rispettotoalla
scala minima
efficiente)
OPTIMUM SCALE BASED ON COMPLEXITY OF ADMISSIONS
SCALA OTTI M ALE I N BASE ALLA COM PLESSI TÀ DEI RI COVERI
(beds)
(posti letto)
.5
500
450
400
0
350
scale_
300
250
-.5
200
150
100
-1
50
0
500
1000
1500
0
letti
q1
q2
q3
q4
Un ulteriore aspetto del processo produttivo suscettibile di influire sulla stima
La dimensione ottimale non è però un parametro fisso e può risentire della specificità
dell’efficienza è rappresentato dall’ampiezza
nella gamma delle prestazioni fornite dalle
Complexity
el processo produttivo. Un fattore rilevante a tale riguardo è rappresentato dal modello di
strutture
ospedaliere.
Un on
indicatore
tipicamente
per of
misurare
By dividing the hospital sample
in four
groups
the basis
of theutilizzato
amount
highlyil grado di
pecializzazione dei ricoveri e quindi dall’output mix (Cfr. Banker et al, 1986).
11
diversificazione
rappresentato
dal cd.
indiceincreases
di entropia . Sul
legame
efficienza tecnica
complex admissions, the optimal
scale è(chart
on the
right)
with
thefraincrease
of
Suddividendo il campione in quattro gruppi in base alla quota di ricoveri ad alta complessità,
complex admissions. The hospitals
moredei
specialized
in high
complexity
an optimum
e diversificazione
ricoveri influisce
la presenza
da un latohave
di economie
di scopo e
a scala ottimale10 risulta crescente all’aumentare della quota di ricoveri complessi: le
size of approximately 500 beds.
dall’altro di economie di specializzazione. Naturalmente l’approfondimento di questo
trutture più specializzate nell’alta complessità presentano una dimensione ottimale
legame
richiederebbe
di analizzare in maniera più specifica le interrelazioni fra le diverse
It is tende
interesting
to note athat
in the
Bank
of Italy study:
ll’incirca di 500 posti letto mentre questa
progressivamente
ridursi
per tutte
le altre
 sampled hospitals have from less
thandi100
to over
beds
tipologie
ricovero.
Nel1,000
presente
studio ci limiteremo ad utilizzare l’indice suddetto per
fig. 2).
 the ideal size to maximize the efficiency
of acute
care hospitals
with high
inferire l’impatto
sull’efficienza
che scaturisce
dalcomplexity
modello di admissions
produzione siaisquesto
approx. 500 beds
Un esercizio di robustezza è consistito nel confrontare le stime dell’efficienza
di scala
orientato
a fornire una gamma diversificata di prestazioni oppure comunque specializzato.
el campione 8
unico con quelle che si ottengono separatamente per ciascun quartile, stimando
11
Si tratta di un indice assoluto elaborato dal Ministero della Salute che “misura l’eterogeneità della
n questo modo la frontiera di produzione per sottocampioni più omogenei al loro interno.
ripartizione dei dimessi nei vari DRG”.
ALTEMS PERFORMANCE STUDY
“Based on the assumption that every public choice or
decision should balance economic rationality and
political discretion, the analysis of the most appropriate
and objective indicators able to demonstrate the
effectiveness, efficiency, and appropriateness, should
be the main information underlining such decisions.
This however is not always easy, especially when the
goal is to measure not so much the productivity and
efficiency, but the efficacy and outcomes of the
procedures.”
From: Comparison among the main Lazio hospitals
and some national hospitals: Economic and Financial
Performance” – High School of Economics and
Managements of Health Care Systems, Working Paper
2/2013
In 2013, a working paper was published by the High
School of Economics and Management of Health Systems
(ALTEMS) of the University Cattolica del Sacro Cuore in
Rome, with the goal to study the efficiency of some
hospitals in the Region of Lazio and in other Italian
regions.
9
PERFORMANCE INDICATORS
The outcomes of the ALTEMS study cover the following areas:
• Performance indicators
• Management indicators
• Reclassified profit and loss statements
• Economical-financial indicators
Performance of the hospitals (# beds) and staff (in its various categories) was measured taking as reference the admissionrelated hospital activity.
The following indicators were calculated:
•Discharges per bed = Number of discharged patients (inpatients + DH/DS) / Total average active beds in the period
•Discharges weighted for bed = Number of discharged patients (inpatients + DH/DS) * CMI (case mix index) / Total average
active beds in the period
•Discharges per physician = Number of discharged patients (inpatients + DH/DS) / Total physicians
•Discharges per nurse = Number of discharged patients (inpatients + DH/DS) / Total nurses
The management indicators considered mainly concern the hospital staff. The indicator selected for the analysis is
the cost of one full-time equivalent (FTE) obtained from the ratio between P&L statement cost items for salaries and
wages, contributions, and regional tax for productive activities (IRAP), and the number of hospital employees on
term contracts.
This analysis uses performance indicators that, as in the Bank of Italy study, weigh the operational, management,
and economical-financial parameters according to the average DRG weight.
By virtue of the weighting by average DRG weight, these indicators allow to assess the hospitals' performance based
on the ratio between (human and economical-financial) resources and "production of care" and not, as often occurs,
simply taking into account the ratio between hospital management costs and the number of beds.
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2010 BALANCE PERFORMANCE INDICATORS
A.O. San
Indicatore
Average DRG weight
Performance
Giovanni
San Filippo
A. O.
*
Molinette
˄
Neri
S.Camillo
Umberto
A. O.
1,03
1,18
1,07
1,10
1,14
1,03
45,50
45,50
48,00
53,60
60,70
55,00
46,80
53,70
51,30
59,00
69,20
56,60
61,20
54,10
58,30
95,50
62,10
104,70
63,00
63,80
62,40
105,10
107,70
28,50
23,00
38,70
33,30
70,70
38,6
0
S.Andrea
*
Vergata
*
Policl.
*
Primo
*
Policl. Tor
*
*
Gemelli
2,74
1,03
65,58
41,10
179,64
42,30
65,58
59,80
179,64
61,60
Discharges per nurse
18,10
27,60
Discharges weighted by nurse
49,58
28,40
29,40
27,20
41,40
36,60
44,00
49,00
Cost of goods and services / Weighted discharges
€ 2.805
€ 2.589
€ 3.771
€ 2.942
€ 4.093
€ 4.243
€ 4.957
€ 2.076
Cost of staff + IRAP / Weighted discharges
€ 2.988
€ 4.549
€ 4.523
€ 4.963
€ 2.456
€ 3.831
€ 1.841
€ 2.518
€ 1.148.903
€ 328.642
€ 414.820
€ 477.409
€ 390.307
€ 526.074
€ 520.150
€ 336.770
€ 419.462
€ 319.070
€ 402.738
€ 404.584
€ 364.773
€ 478.249
€ 456.272
€ 326.961
€ 7.512
€ 5.940
Discharges per bed
Economic-Financial
ISMETT
Discharges weighted by bed
Discharges per physician
Discharges weighted by physician
Internal cost of production (ICP) / Beds
Internal cost of production (ICP) / Weighted beds
Internal cost of production (ICP) Weighted discharges (Inpt + DH)
Reddito Operativo Netto (RON) / Posti Letto
*
€ 6.396
43,10
52,60
24,20
€ 509.271
€ 7.761
-€ 117.035,00
-€ 7.967,00
Lazio Region (Center Italy) Public Hospital
˄ Piemonte Region (North Italy) Public Hospital
For ISMETT: - cost of staff includes all UPMC personnel
- cost of goods and services includes the full cost for UPMC services
€ 8.861
€ 8.886
€ 7.602
€ 8.921
-€ 156.421,00
-€ 177.548,00
-€ 82.561,00
-€ 130.704,00
47,60
-€ 153.097,00 -€ 23.779,00
Note: - "weighted" indicators are normalized to the hospital's average DRG weight
- the average DRG weight includes all categories:
• Regular Admissions: 4.08 average weight (ISMETT)
• Day Hospital: 1.28 average weight (ISMETT)
To assess ISMETT's performance we used the ALTEMS study indicators referred to the 2010 balances of ISMETT and of
the ALTEMS study hospitals. It is important to note that the ALTEMS study hospitals have between 433 and 1893 beds
and therefore with economies of scale much more favorable than ISMETT that, in 2010, had 70 beds. This analysis
shows:
• ISMETT has an average DRG weight (inpatients + DH) 230% higher than the most complex facility included in the
study (S. Camillo Hospital)
• the number of discharged patients weighted by DRG, bed, and physician is higher by 150% and 65% respectively
compared
to the two most complex hospitals. The discharged patients per nurse are higher by 1.2%
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• weighted costs of staff and goods & services fall within the low-end range of the other hospitals, as also does the
cost of production weighted by bed and discharged patients.
AVERAGE DRG WEIGHT: ALTEMS STUDY + ISMETT
Average DRG weight
Italian public hospitals in black
The average DRG weight is the indicator of the complexity of the clinical conditions treated and patient care provided.
12
NUMBER OF DISCHARGED PATIENTS PER BED:
ALTEMS STUDY + ISMETT
Discharges per bed
Discharges weighted by bed
The number of discharged patients per bed (green) is an indicator of an efficient use of beds and resources associated
with the hospital stay (work of physicians, nurses, general management costs, etc.)
Overall, ISMETT has the highest number of discharged patients per bed. When this datum is weighted by patient and
treatment complexity (purple), ISMETT shows extraordinarily higher levels of efficiency.
13
NUMBER OF DISCHARGED PATIENTS PER PHYSICIAN
AND NURSE: ALTEMS STUDY + ISMETT
Discharges per physician
Discharges per nurse
The number of discharged patients per physician (green) and nurse (purple) reflects the medical and nursing workload
and the facility's commitment to these resources.
ISMETT has a number of discharged patients per physician in line with the larger hospitals included in the study.
The number of discharged patients per nurse is instead lower because, given the high level of specialization and the need
to ensure safe and quality care 24/7, ISMETT invests considerable resources on the nursing staff and on their work.
14
NUMBER OF DISCHARGED PATIENTS WEIGHTED FOR PHYSICIAN AND
NURSE: ALTEMS STUDY + ISMETT
Discharges weighted by
physician
Discharges weighted by
nurse
When the number of discharged patients per physician is weighted by complexity (green) ISMETT once more proves
much more efficient than the other hospitals. A higher number of discharged patients means shorter hospital stays which in
turn express the quality of the clinical outcomes. A shorter hospital stay is in fact a result of lesser complications, one of the
main causes of prolonged hospitalizations.
The number of discharged patients per nurse weighted by complexity (purple) at ISMETT is also better, albeit only
slightly, than the other hospitals. This difference is not so evident also because ISMETT’s ICU beds are 20% of the total beds.
Other hospitals have a percentage of ICU beds of less than 10%. In the ICU the nurse-to-bed ratio is 1:1, 1:2 . This ratio is
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considerably
higher than in the inpatient units.
COST OF GOODS & SERVICES AND STAFF PER WEIGHTED
DISCHARGES: ALTEMS STUDY + ISMETT
Cost of goods and services /
Weighted discharges
Cost of staff + IRAP /
Weighted discharges
Costs of goods and services in € (green) include all costs to purchase medications, biomedical devices, utilities (electricity,
telephone, etc.), services, etc. for ISMETT. These costs include the UPMC management contract.
Costs of staff + taxes in € (purple) includes cost of all personnel (physicians, nurses, technicians and administrative staff).For
ISMETT this includes all staff employed by ISMETT and UPMC.
The two cost categories are weighted by discharged patients; at ISMETT these are among the lowest.
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INTERNAL COST OF PRODUCTION (CPI) / BED:
ALTEMS STUDY + ISMETT
Internal cost of production (ICP) / Beds
The internal cost of production is the cost paid by a hospital to provide care to its patients. This includes costs for goods and
services, personnel, depreciation, write-downs, accruals, etc. The cost divided by the number of beds does not take into
account the complexity of the patients treated and provided care. Moreover, it fails to take into account the number of patients
treated with respect to the number of beds, i.e. the occupation rate.
This chart would indicate has ISMETT a cost/bed ratio that is much higher than the other hospitals.
17
INTERNAL COST OF PRODUCTION (CPI) / WEIGHTED BEDS:
ALTEMS STUDY + ISMETT
Internal cost of production (ICP) / Beds
If we appropriately assess the costs per bed, i.e. weighting them by complexity, it is clear how ISMETT's costs are in line with
those of the other hospitals.
This indicator, however, still does not take into account the occupation rate, or the overall quality of outcomes. It takes into
account the complexity of the cases, but not the number of treated patients, or outcomes.
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INTERNAL COST OF PRODUCTION (CPI) PER WEIGHTED
DISCHARGES: ALTEMS STUDY + ISMETT
Internal cost of production (ICP) / Weighted discharges (Inpt + DH)
The cost per weighted discharges reflects both the complexity and the number of patients and therapeutic procedures
performed.
This is the indicator of the utilized resources that better reflects the efficiency of an acute care hospital.
ISMETT has the lowest internal cost of production per weighted discharges among the hospitals included in the sample, after
Policlinico Gemelli in Rome, which is slightly lower. It should however be noted that Policlinico Gemelli has over 1,800 beds,
19
therefore
a much more favorable economy of scale than ISMETT.
FINANCING FOR FACILITY: 2013
Source: Economic data published on the facilities' institutional web sites
Note: Data reclassified for accounting homogeneity from 2013 balance of the single facilities.
E.g. Main P&L statement items reclassified in:
Ref. 6 - Other revenues
A.4.C) Revenues for clinical services and social services of clinical relevance provided to private patients
A.4.D) Revenues for clinical services provided with in-hospital private medical practice
Production percentage
DRG on total financing
Acute care hospitals are financed with the reimbursement of their DRG production, to which funding for their "functions" is
added to remunerate the activity (e.g., emergency rooms not providing DRG-related services) and cover additional costs. Is
often stated that ISMETT has excessive differential between its DRG production and the total financing it receives from the
Regional Health Fund.
By comparing 2013 balance data it is evident how ISMETT, much smaller in size than other hospitals to which it is compared,
has a DRG production of 36.5% of the total financing, i.e. slightly less than the much larger Sicilian hospitals.
20
PRODUCTION / TOTAL FSR FUNDING RATIO
Data of previous table is shown in this chart.
FSR = Regional Health Fund
21
COMPARED REGION OF SICILY HOSPITALS:
The medical, nursing and overall ISMETT staff is compared with that of other Sicilian clinical hospitals in
relation to the number of beds and average DRG weight.
2012
Indicators
Data
ISMETT
Civico- Di
Cristina
Palermo
Villa SofiaCervello
Palermo
P.Giaccone
Palermo
S. Giovanni
Di Dio
Agrigento
Cannizzaro
Catania
S. Antonio
Abate
Trapani
PapardoPiemonte
Messina
Beds
78
688
621
478
237
508
223
434
ICU beds
16
38
42
16
14
30
8
24
20,5%
5,5%
6,8%
3,3%
5,9%
5,9%
3,6%
5,5%
Medical staff
92
674
532
478
139
409
167
390
Nursing staff
299
1.319
966
687
274
690
358
699
Total staff
753
2.792
2.401
1.937
596
1.380
792
1.543
Average DRG weight
3,03
1,05
1,21
1,17
0,87
1,16
0,96
1,19
Physicians / Beds
1,18
0,98
0,86
1,00
0,59
0,81
0,75
0,90
Physicians / Weighted beds
0,39
0,94
0,71
0,86
0,68
0,69
0,78
0,76
Nurses / Beds
3,83
1,92
1,56
1,44
1,16
1,36
1,61
1,61
Nurses / Weighted beds
1,27
1,83
1,28
1,23
1,33
1,17
1,68
1,35
Total staff / Beds
9,65
4,06
3,87
4,05
2,51
2,72
3,55
3,56
Total staff / Weighted beds
3,19
3,88
3,19
3,47
2,90
2,34
3,72
2,99
ICU beds / Total beds
Source: Ministry of Health - Database archive (updated 2012) - www.salute.gov.it/portale/documentazione/usldb/regusl_personale_az_osped.jsp
Region of Sicily - Assessorato alla Salute – Department of Strategic Planning - area 4 - www.rssalute.it
Note:
Regular admissions.
The number of intensive care beds includes ICU and Neonatal ICU.
NHS and university personnel (for ISMETT this includes ISMETT and UPMC staff)
The comparison with other Sicilian hospitals confirms ISMETT's high level of specialization (average weight almost three times
higher and percentage of ICU beds over three times higher). The total number of physicians, nurses and staff per
weighted
bed is either lower or in line with that of the other compared hospitals. Once again this data confirms the
22
extremely high level of efficiency of ISMETT that would be even higher if the number of beds were not so limited, and thus
associated with totally unfavorable economies of scale. The table's data is reported in the charts in following slides (20-23).
COMPARED SICILIAN HOSPITALS:
AVERAGE DRG WEIGHT
3,5
3
2,5
2
1,5
1
0,5
0
23
COMPARED SICILIAN HOSPITALS:
NUMBER OF PHYSICIANS PER BED AND WEIGHTED BEDS
1,2
1
0,8
0,6
0,4
0,2
0
24
Physicians / Beds
Physicians /
Weighted beds
COMPARED SICILIAN HOSPITALS:
NUMBER OF NURSES PER BED AND WEIGHTED BEDS
4
3,5
3
2,5
2
1,5
1
0,5
0
25
Nurses / Beds
Nurses / Weighted beds
COMPARED SICILIAN HOSPITALS:
TOTAL STAFF PER BED AND WEIGHTED BEDS
10
8
6
Total staff / Beds
Total staff / Weighted beds
4
2
0
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CONSIDERATIONS ON PERFORMANCE DATA
 Data show how ISMETT’s costs, evalued in terms of clinical complexity, volume of
patients treated and levels of provided care, are lower than those of large acute
care public hospitals.
 These results are obtained by a small-size facility, with adverse economies of
scale, and delivering high-quality services. Additional significant efficiency
improvements could be achieved by increasing its size.
 ISMETT has high levels of internal efficiency and should be considered a
management model for the regional and national health system.
 ISMETT performance indicates that public-private partnership, in which a private
partner has extensive know-how in health care, can provide high quality patient
care at lower costs
 Appropriate methodology needs to be used to properly evaluate health care
organization performance
27