A Pay for QualityEfficiency System: A Skilled Nursing Home Balanced Scorecard Approach

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A Pay for Quality-Efficiency System A
Skilled Nursing Home Balanced Scorecard Approach

• Thomas T.H. Wan, Ph.D., M.H.S.
• Professor and Associate Dean For Research
• Jackie N. Zhang, MD, Ph.D.
• Assistant Professor
• Sam Marathe, MD, JD, Ph.D.
• Assistant Professor
• College of Health and Public Affairs
• University of Central Florida

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1. Value Proposition

• In a competitive environment, nursing homes are
  driven to achieve cost-effective, quality, and
  efficiency for residents. The focus of the
  research and development initiative, conducted by
  the UCF research team, is to serve the
  information needs for achieving comparative
  effectiveness and enable nursing home management
  to function efficiently and effectively on the
  basis of evidence-based approach.

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2. Nursing Home Informatics Research
Practice-based research

• Evidence-based practice research
• Nursing home performance improvement
• Data mining profiling of best practices
• Assessment of quality-efficiency vs. technical
  efficiency
• Executive decision support system

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3. Outcomes Evaluation An example
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4. Developing a Graphic-User Interface (GUI)
strategy

Data Sharing
Data Mining
Constraint-Oriented Reasoning Methodology
Simulation Optimization Benchmarking
Exploratory Statistical Modeling Structural
Equation Modeling Measurement models
Structural relationships
Graphics-User Interface (GUI)
Decision Making
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5. Critique on the Pay-for-Quality-System

• The emerging pay-for-performance system centers
  on quality to incentivize health care providers,
  and fails to include efficiency or productivity
  in performance evaluation.

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6. An Evidence-Based Approach to Nursing Home
Performance Study

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1) Aims

• This studys aims are to
• Demonstrate the feasibility of developing a
  quality- efficiency measurement.
• Evaluate its applicability as a method for
  benchmarking the performance.
• Compare the pay-for-quality and
  pay-for-quality-efficiency systems in terms of
  their relative performance rankings.

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2) Methodology

• Data All Florida skilled nursing homes certified
  by Medicare or Medicare with complete data
  (Medicare Cost Reports, MDS OSCAR) were
  included (N396).
• Design Longitudinal from 1999-2003.
• Measurement Data envelopment analysis (DEA) to
  generate the facility specific technical
  efficiency scores based on five years of data.
• Analytical Modeling Structural equation model

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3) Analytical Strategies

• Modeling the determinants of nursing home quality
• Modeling the determinants of technical efficiency
• Optimizing the quality-efficiency system

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4) Resident Outcomes/Quality

• 1/ (deficiency citations for staffing.
• 1/ (deficiency citations for nursing care
  quality.
• 1/ (pressure ulcer rate) 2) 1/ (urinary tract
  infection rate) and 3) 1/ (physical restraint
  rate).

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4) Efficiency Score

• Cost efficiency that is, the average operating
  cost per resident is a negative aspect of
  efficiency hence, this inefficiency indicator is
  inverted 1/ (average operating cost per
  resident).
• Process efficiency --the average occupancy rate
  reflects the process efficiency.
• Productive efficiency--the total skilled nursing
  inpatient days, intermediate nursing inpatient
  days, and other long-term care inpatient days. A
  technical efficiency TE) score is computed.

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5) Quality-Efficiency (QE) Score

• Quality indicators as output variables staff
  adequacy, nursing care quality, and resident
  outcomes.
• Input variables expenses for general services,
  routine services, and ancillary services.
• Iota score for QE is computed for each facility.

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6) Relationship Between TE and QE
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Implications

• the improvement of efficiency should not be at
  the expense of quality. Thus, the emphasis on an
  integrated efficiency-quality approach to the
  provision of nursing home care will enable the
  nursing home industry to be more competitive.
  Clearly, the objective is to achieve optimal
  levels of efficiency and effectiveness in all
  respects.

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7) Findings for Benchmarking

• -The quality-efficiency scores were successfully
  developed using the DEA approach. Relative
  rankings of nursing home performance in terms of
  quality-efficiency were produced as the balanced
  scorecard, with the maximum score of 100. The
  variations of the performance scores allow us to
  identify the top performers (top 25) and low
  performers (bottom 25) among all studied skilled
  nursing homes in Florida.
• -The comparisons between the pay-for-quality and
  pay-for-quality- efficiency systems suggest that
  two systems yield different benchmarks for
  nursing homes performance.
• -The correlation between the two performance
  scores (quality-efficiency and technical
  efficiency) for the panel of the same nursing
  homes appears to be moderate but statistically
  significant.

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7. Executive Decision Support System Software
expert system design

• Graph 1 Florida Nursing Home Performance

• Graph 2 Technical Score and Ranking of the
  Facility

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Graph 4 Decision Support System
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8. Potential Collaboration

• Nursing home informatics research evaluation
• Data sharing IT infrastructure
• Monitoring performance

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9. Discussion

• Collaboration of Nursing Home Informatics
  Research
• Consultation and technical assistance
• Dissemination research

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Related Publications

• Wan, T.T.H., Breen, J., Zhang, J.N., and Unruh,
  L. Evidence-based Approach to Improving Nursing
  Home Quality. (under review)
• Zhang, N.J., Paek, S., and Wan, T.T.H.
  Reliability Estimates of Clinical Measures
  between Minimum Data Set and Online Survey
  Certification and Reporting Data of U.S. Nursing
  Homes. Medical Care, 2008.
• Breen, J., Wan, T.T.H.,Zhang, N.J., and Marathe,
  S. Doctor-Patient Communication Examining
  Innovative Modalities vis-à-vis Effective
  Patient-Centric Care Management Technology.
  Journal of Medical Systems, 2008.
• Zhang, J. N., Unruh, L., and Wan, T.T.H. Has the
  Medicare Prospective Payment System Led to
  Increased Nursing Home Efficiency. Health
  Services Research 43(3) 1043-1061, 2008.
• Zhang, J. and Wan, T.T.H. Effects of
  Institutional Mechanisms on Nursing Home
  Quality. Journal of Health and Human Services
  Administration 29(4) 380-408, 2007.
• Unruh, L., Zhang, J., and Wan, T.T.H. Impact of
  Medicare Reimbursement Changes on Staffing and
  the Quality of Nursing Homes. International
  Journal of Public Policy, 1(4) 421-434, 2006.
• Wan, T.T.H., Zhang, J., and Unruh, L. Predictors
  of Resident Outcome Improvement in Nursing
  Homes. Western Journal of Nursing Research,
  28 (8) 974-993, 2006.
• Zhang, J., Unruh, L., Liu, Rong, and Wan, T.T.H.
  " Minimum Nurse Staffing Ratios for Nursing
  Homes." Nursing Economics 24(2) 78-85, 2006.
• Zhang, J. and Wan, T.T.H. The Measurement Model
  of Nursing Home Quality A Two-Level Analysis.
  Journal of Medical Systems, 29(4)401-411,2005.
• Unruh, L. and Wan, T.T.H. A Systems Framework
  for Evaluating Nursing Care Quality in Nursing
  Homes, Journal of Medical Systems, 29(2),
  197-212, 2004.
• Wan, T.T.H. Nursing Care Quality in Nursing
  Homes Cross-sectional Versus Longitudinal
  Analysis. Journal of Medical Systems 27(3)
  283-295, 2003.
• Yeh, S.C., Wan, T.T.H., and Neff-Smith, M.
  Subacute Care in Nursing Homes. Journal of
  Nursing Administration 32(7/8) 369-370, 2002.

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Thank You

• Thomas T.H. Wan
• twan_at_mail.ucf.edu
• Phone [phone]
• Fax [phone]
• Address Doctoral Program in Public Affairs
• College of Health Public Affairs
• University of Central Florida
• IST Building Room 108
• 3280 Progress Drive
• Orlando, FL 32826

The project is partially supported by a research
grant from NIH-NINR (2003-2008).