1. Mike Dinneen, MD, PhD Director, Office of Strategy Managment Office of the Assistant Secretary of Defense for Health Affairs Why MEPRS Matters More Than Ever

2. Transformational Change “Most ailing organizations have developed a functional blindness to their own defects. They are not suffering because they cannot resolve their problems, but because they cannot see their problems.” John Gardner “The significant problems we face cannot be solved at the same level of thinking we were at when we created them.” Albert Einstein “There is nothing so powerful as an idea whose time has come.” Victor Hugo

3. Objectives Understand Department of Defense Strategic Direction and how expense reporting fits in. Understand the MHS Strategic Plan and how MEPRS fits in. Understand the critical importance of MEPRS Time allocation in achieving performance based management. Understand how MEPRS accounting will be modified to enable collection of cost and workload data in a manner that resembles best civilian practices.

4. Patient Care, Sustain Skills and Training Promote & Protect Health of the Force and Communities Deploy to Support the Combatant Commanders to and MHS Mission: To enhance DoD and our Nation’s security by providing health support for the full range of military operations and sustaining the health of all those entrusted to our care. Manage and Deliver Beneficiary Care Medically Ready and Protected Force Deployable Medical Capability Support Homeland Defense Provide Humanitarian Aid MHS Vision: A world-class health system that supports the military mission by fostering, protecting, sustaining and restoring health.

5. Create Value for our External Stakeholders – What are the key outcomes? A fit, healthy and protected force Reduced death, injuries and diseases during and after military operations Satisfied beneficiaries Creation of healthy communities **Effective management of healthcare costs

6. MHS Mission To enhance DoD and our Nation’s security by providing health support for the full range of military operations and sustaining the health of all those entrusted to our care. Stakeholder Perspective Customer Perspective Internal Process Perspective Learning & Growth Perspective Medically Ready and Protected Force F1 Manage health care costs Mission Centered Care IP9 Health and environmental monitoring S2 Warrior Care – Before, during and after operations S3 Beneficiary satisfaction R1 Transparent and reliably available resources Patient Centered Care C2 Convenience and accessibility C1 Health Partnerships S4 Healthy communitie s DoD Beneficiaries Commanders and Service Members Resource Perspective C3 Care anytime, anywhere IP10 Individual medical readiness C4 Readiness partnership S1 Force medical readiness and community protection “Total Customer Solution” “Product Leadership” Manage and Deliver the Health Benefit IP1 Evidence based medicine IP3 Patient centered, effective processes IP2 Partnerships with beneficiaries Deployable Medical Capability and Homeland Defense for Communities IP8 New product and service development IP6 Globally accessible health and performance information IP5 Joint processes deliver care anytime, anywhere L5 Total force developmen t R2 Infrastructure management Human Capital Organization & Culture Financial Perspective IP7 Humanitarian missions and homeland defense L6 Coordinated Biomedical R&D L7 IM/IT optimall y leverage d Science and Technology Learning & Growth Perspective L4 Authority and accountability are aligned L3 Culture of jointness and interagency cooperation L2 Performance based management L1 Customer focus Organization & Culture

7. Performance Based Organization A high performance organization is: –Employer of choice – (staff) –Provider of choice – (customers) –Best value for investors (stakeholders) What is required to create a high performance organization: –A strategic plan that describes how value is created for each of the three groups above –Business plans for each business unit that link with the strategic plan –Well understood objective measures of success –A workforce provided with incentives and tools to innovate

8. The Burning Platform – What is the Problem that We Are trying to Solve We do not know for sure that our medical professional workforce has the experience to excel in operational settings. We appear to be less efficient that civilian counterparts in part because we are not “valuing” non-clinical but, mission essential activites. We can’t accurately compare performance across MTFs because we count differently Our data systems have not been designed to specifically support our business model

9. What is the Cause of the Problem Current policy does not specify use of a specific business model Current organizational structure is widely variable Training does not adequately address performance based management in healthcare Our systems were not designed to monitor costs, outputs and outcomes in a manner consistent with commercial practices Leadership accountability for system performance is not been aligned with incentives and measures. We are not developing business managers and group practice managers as a strategic job family.

10. What is the Solution? Group Practice and Clinical Work Centers –managed separately –supports optimal performance while adapting to some variation in organizational structure –Supports business plans and financing in Multi-Service Markets to be Market based –Promotes monitoring and management of clinical currency for all medical professionals

11. The Civilian Model of Institutional vs. Professional Charges – a key enabler Institutional Charges –Pays for hospital and some clinic expenses –Linked to DRG/RWP for IP care –Pays for ER and APV facility expenses Professional Charges –Pays for group practice expenses –Linked to RVUs earned by providers in all clinical settings (IP, OP and APV)

12. How will this affect you? Standard Application of MEPRS across all Services Standard triservice business processes for the collection of labor expenses Full transparency of performance data, including MEPRS labor cost allocation You must identify your customers and answer the so-what question.

13. Keys to Success Simplify data capture for individuals –Lump, don’t split work centers –Standard naming of work centers –Standard time allocation rules –Simplified data entry –Show people their data –Align accountability with authority – the golden rule

14. Monthly Group Practice Profit and Loss Statement (Professional) Total "Revenue" 3000RVU*$40/RVU =$120,000 Support Staff Salary Expense (MEPRS )($45,000) Supply Expense($5,000) Travel Expense($4,000) Overhead Expense (E Stepdown)($20,000) Net Earnings$46,000 Provider Salaries($56,000) Profit (or loss)($10,000) Monthly Hospital Ward Profit and Loss (Institutional) Total "Revenue" 150RVU*$6000/RWP =$900,000 Support Staff Salary Expense (MEPRS )($325,000) Supply Expense($145,000) Travel Expense($10,000) Overhead Expense (E Stepdown)($300,000) Profit (or loss)$120,000 Hypothetical Example of Group Practice and Clinical Work Center Monthly Financial Reports Note: Q: Where does the group practice “revenue” come from? A: All of the work done by the providers in the group practice regardless of where it is done! Note: Q: Where does the ward “revenue” come from? A: All of the work done by the ward only, (not the work that the physicians receive RVU value for).

15. What do you think?

16. Synopsis I will show how success in strategic transformation in the Department of Defense and the Military Health System depends on accurate and reliable expense data. I will then explain how minor changes and improvements in the methods for capturing and displaying MEPRS data will allow us to compare performance across MTFs and benchmark with civilian healthcare facilities. This section of the brief will include an overview of the concept of professional and institutional charges. Finally, I will try to show how success in simplifying and standardizing MEPRS 3 rd and 4 th level names and definitions will make the transition to DMHRSi much easier.

17. Strategic Goal: Enhance deployable medical capability, force medical readiness and homeland defense including humanitarian missions Tactical Focus: Partner with VA to improve case management and share medical information Improve care for traumatic brain injury (TBI) and post traumatic stress disorder (PTSD) Conduct TBI and PTSD research within the MHS and in partnerships Improve the medical surveillance program Codify and expand humanitarian mission support Improve the Medical Logistics System

18. Strategic Goal: Sustain the Military health benefit through top quality patient-centered care and long-term patient partnerships with a focus on prevention Tactical Focus: -Improve provider-patient communication and partnering – ensure that our patients are in control of their health -Expand tobacco, alcohol and weight management programs -Implement focused disease management in MTFs and the purchased care system -Target CPI projects to improve access to care, referral management and pharmacy management

19. Strategic Goal: Provide globally accessible, real time, health information that enables medical surveillance and evidence based healthcare Tactical Focus: Implement AHLTA and TMIP and ensure seamless patient tracking Develop joint DoD and VA IP electronic health record Improve the speed and reliability of AHLTA Develop real time prevention, disease management and medical surveillance capabilities within AHLTA Deploy the personal health record

20. Strategic Goal: Provide incentives to achieve quality in everything we do Tactical Focus Implement Continuous Process Improvement throughout the MHS Make clinical quality data transparent and widely available Focus MTF business plans on the entire MHS mission, not just production of health services Develop alternative RVU scale to incentivize prevention and readiness activities Implement joint governance to improve mission effectiveness Implement true market management especially in large multi- Service markets

21. Strategic Goal: Develop our most valuable asset—our people Tactical Focus Improve joint leadership training Develop common curricula and a tri-Service educational campus Implement coordinated programs to improve recruiting and retention Fully implement the Defense Medical Human Resource System (DMHRSi)

22. Strategic Goal: Build and sustain the best hospitals and clinics; nurture a caring environment Tactical Focus  Implement BRAC  Use evidence-based design to create healing environments  Remove barriers to effective management of facilities