Rochester (N.Y.) Regional Health went from losing $1 million per day in 2022 to saving $300 million annually through a cost transformation leveraging technology and data to improve operational efficiency and cut costs.
"Data was a huge part of this at the outset of the transformation," said Chris Ragsdale, vice president and CAO of Rochester Regional. "It really highlighted for us gaps in our own data and our ability to monitor internal operations, care delivery operations, finances with advanced data and analytics. The transformation was the impetus for building a new data infrastructure, new analytics capabilities, and hiring two new team members dedicated to analytics, which were table stakes for this transformation."
The health system's leadership identified opportunities for efficiencies and improved operations throughout the transformation. They worked with Boston Consulting Group to optimize results and tailor the principles to their history, culture and values. The organization found top issues were:
- Reducing reliance on nursing agencies
- Shortening length of stay
- Improving provider productivity
- Enhancing network integrity
There were more than 100 issues and initiatives considered for the transformation. They tracked the key performance indicators daily, weekly and monthly to track results. Clinical and administrative staff enterprisewide quickly adapted to new initiatives and technology for improved outcomes; the alternative would have meant losing access to care.
"The transformation has always been not just about our organization, but about protecting the health and wellness of the entire community; the entire region," said Mr. Ragstaff. "That helped make it part of our culture when we connected [the cost transformation] back to the preservation of the community."
The initial cost transformation had a big positive impact on the health system. But what comes next?
"As we turn the corner on our transformation, and we're nearing breakeven for the first time in years, we're now starting to think about how do we go beyond breakeven and start producing new sources of revenue again to ensure the financial sustainability and wellness of our organization," said Mr. Ragstaff. "We see population health and value-based care as a key strategy to start unlocking new sources of revenue."
The majority of Rochester Regional's primary care patients are already in shared savings arrangements, with a major focus on Medicare Advantage. There is still progress the system can make with Medicare Advantage and commercial plans.
"Over the next couple of years, as we start to focus more on this, our organization has established readmissions as the number one quality goal that the entire organization will be committed to over the next several years," said Mr. Ragstaff. "Every department, every service line, every team will have a role in driving performance in reducing readmissions."
The leadership team is examining the care management, care coordination and transition teams to reorient them around Rochester Regional's readmissions goal. They are also enhancing workflows so teams can collaborate more effectively. Rochester Regional also has a full set of post-acute services and has been identifying opportunities for improvement in post-acute as well.
"Hisotrically, we have not yet integrated those services into our value-based care strategy," said Mr. Ragstaff. "We are taking a look to see how we can leverage those services to manage our value-based care; populations are better and making sure that our managed lives end up in the best possible setting or best possible acute care for them."
Rochester Regional also plans to deepen ties with Trilliant to access cost, utilization and network integrity data. The system is installing Epic's population health suite to offer new analytics capabilities and will invest in the Milliman benchmarks through Epic to better understand how management capabilities compare to industry standards.
"My goal is to leverage all of this new data and technology to be able to provide physicians with all of the actionable data they need, in a true population health environment," said Mr. Ragstaff. "That's our true north for data and technology."
Rochester Regional's other big goals for the year are integrating the recently acquired St. Lawrence Health and optimizing their self-funded insurance plan to scale positive results in employee engagement.
"Our goal there is to demonstrate success and potentially use that success to develop new solutions for employers in our community," said Mr. Ragstaff. "There's a lot of work to do over the next couple of years, but we're very excited about it."
The opportunities are endless. But what are the headwinds?
"The biggest headwind is that fee-for-service economics are not sustainable for us in the long term, like most health systems," said Mr. Ragstaff. "I get really excited when I think about where value-based care can take us, not just for our system, but for patients too, because we have a healthcare affordability crisis in our country."