Provider organizations are tackling social issues in order to help patients better manage their health and to avoid incurring government penalties.
This article first appeared in the April 2015 issue of HealthLeaders magazine.
As hospital and health system leaders look for ways to improve their population health management capabilities, it is becoming clear to some that they need to develop community outreach programs to assist patients in overcoming the social barriers that exist in many areas.
Hunger and nutrition challenges, low literacy rates, and a lack of safe housing are among the biggest obstacles faced by many patients who are high utilizers of healthcare services. Through community-based initiatives, provider organizations can help patients get beyond these hurdles to be able to prevent and manage chronic diseases and other costly health problems.
Focus on public health
Successful population health management requires an innovative way of thinking about care delivery, says Randy Oostra, president and CEO at ProMedica, a Toledo, Ohio-based health system with 2,268 licensed beds and fiscal year 2014 budgeted revenue of $2.6 billion.
Behavioral health patients have higher-than-average rates of emergency department visits, hospitalizations, and readmissions. To make behavioral health a core part of its population health strategy, one Ohio health system is partnering with a mental health services provider.
As hospitals and health systems work to develop population health strategies to better serve their communities and rein in the overall cost of care, behavioral health patients—who have higher-than-average rates of emergency department visits, hospitalizations, and readmissions—cannot be ignored.
Lee Hammerling, MD
These individuals make up a large subset of the patient population. According to the Substance Abuse and Mental Health Services Administration's 2012 National Survey on Drug Use and Health, 43.7 million (18.6%) U.S. adults experienced some form of mental illness that year. Additionally, 20.7 million adults (8.8%) had a substance use disorder, and of those, 8.4 million people had both a mental disorder and a substance abuse disorder.
"I think behavioral health needs to be a foundational core strategy for any population health program for an integrated delivery system," says Lee Hammerling, MD, chief physician executive and chief medical officer of ProMedica, a Toledo, Ohio-based health system with 2,268 licensed beds and fiscal year 2014 budgeted revenue of $2.6 billion.
"Without it, you will never be as successful as you need to be. Behavioral health is pervasive and impacts so many conditions, like diabetes, cancer, and congestive heart failure, and the increase in ED use and admissions can be as high as 60%."
Behavioral health is part of care coordination
ProMedica's approach begins with in-office screenings for behavioral health issues.
"Our goal is to screen 100% of patients that present in our offices. We have about 1.6 million encounters per year, and we want all of those patients to be screened at least once annually," Hammerling says. "Everybody is being screened for high blood pressure, weight, and BMI. Why wouldn't we also ask them about things like their sleep patterns, depression, and anxiety? It's not isolated. It's part of your overall health."
Once a physician determines that a patient needs additional care to deal with a mental health or substance abuse problem, there needs to be a referral path in place, he says.
"We are trying to connect the dots so physicians can be more effective in screening and make sure there is a way to quickly and appropriately refer patients for the right service."
To that end, ProMedica has recently formed a joint operating company with Harbor, a mental health and substance abuse services provider in northwest Ohio with several care sites throughout Toledo.
"This is a great opportunity for two not-for-profits to come together to create an efficient, lean, and mean structure that benefits the community," Hammerling says.
New funding rules create opportunity
Harbor CEO John Sheehan says that while behavioral health has long been treated like "an island in healthcare," that is changing now, thanks in large part to healthcare reform.
John Sheehan
"It's an interesting dynamic. For the last 30 years, there's been an inequity in required coverage for services. … But with the Affordable Care Act and the introduction of parity, health plans can no longer carve out behavioral health and deny coverage," he says.
"Now, in an environment where risk is the talk of the day, everyone has to think about chronic disease and population health, and behavioral health has to be a part of that conversation. It's creating a lot of discussion about what we are going to do with this population."
Sheehan says the new joint operating company allows healthcare professionals at both organizations to better coordinate and manage care for behavioral health patients across all care sites.
"I would say the main thing we are focusing on is access. It's important to maintain contact with the patient from treatment modality to treatment modality, wherever they touch the system, so we are following their care, actively managing care, and assisting in a treatment plan they participate in and approve of," he says.
"We are really working for this individual to get the best treatment plan in place and to monitor that care going forward so we are not seeing a backslide in their condition."
Care coordination for behavioral health is not a new idea, Sheehan says, but he believes there are big changes occurring in how inpatient, hospital-based care is now being integrated with outpatient, community-based care.
"Previously, there hasn't been a lot of linkage between these modalities of care. … The changes in the funding of healthcare have allowed us to take a different view of how we provide care. We can now look at all the care the patient needs and actively coordinate that wherever we need to and to span the entire system, which is better for patients and providers. It will also produce better outcomes at a better cost. It's amazing to see how high on the radar behavioral health has risen as an issue," he says.
Health systems have historically not done a great job of providing outpatient behavioral health services to patients, Hammerling says, adding that ProMedica's relationship with Harbor will allow the organization to make significant strides in this area.
"We are implementing these core ideas in new ways," he says. "By bringing in experts like John and his team to become part of ProMedica's care team, we are creating a link and helping to provide better care to our patients. … Behavioral health is now part of every service line."
A better system for physicians
In addition to helping patients receive more effective care, the new agreement between ProMedica and Harbor will also benefit primary care physicians, who often lack support in working with behavioral health patients, Sheehan says.
"Primary care has typically been a catch-all for everything. … That is what is changing here, and I think there is a great need for this kind of synergy between primary care and behavioral health resources. Primary care physicians now have a well-linked referral source. I think this is an opportunity-rich environment because there are so many people who are desperate for this care."
By providing more payment options and moving away from a "one-size-fits-all" collections approach, one Florida hospital is making progress toward managing the revenue leakage that comes with self-pay patients.
Providing too many services that don't get reimbursed is a recipe for financial disaster for hospitals and health systems. And as more patients move into health plans with a significant self-pay portion, uncompensated care is a growing threat.
Jeffery D. Hurst
Senior VP of Finance
Florida Hospital
"There are lots of areas of revenue leakage, I would call it, as it relates to the services we provide where, unfortunately, we don't always get paid," says Jeffery D. Hurst, senior vice president of finance at Orlando-based Florida Hospital, a not-for-profit health system with eight hospitals and 22 campuses throughout the state.
Hurst cites uncompensated care as Florida Hospital's top revenue challenge over the past several years and says he expects that trend to continue, thanks in large part to high-deductible health plans.
"We have had some relief in terms of the number of patients who were previously uninsured and now have insurance or some type of coverage, predominantly through the open enrollment of exchange products. However, the challenge is that a lot of those patients now have a $3,000 or a $7,000 out-of-pocket obligation. In theory they are technically insured, but until they satisfy that out-of-pocket cost, they really don't have insurance," he says.
Creating Better Patient Engagement
In an attempt to prevent leakage, Florida Hospital has upped its efforts to engage patients in conversations about their medical bill, Hurst says.
"I think uncompensated care will continue to be a challenge for us over the next several years, but it also creates an opportunity for us in the age of consumerism to elevate the conversation and elevate the relationship with patients and to be more proactive and educational in our approach. We are creating collaborative relationships with patients."
Part of that collaboration, Hurst says, is to provide more payment options and to move away from the "one-size-fits-all" approach Florida Hospital has taken in the past to its collections process.
"We have a sophisticated workflow in place to stratify and segment populations based on things like credit worthiness and insurance plans and that has worked fairly well for us. However, when it came to the point of having a conversation with the patient it was still just one approach. They had to pay it all in full. Now we are giving patients different options and letting them choose what works best for them, and that is creating better relationships," he says.
For example, the organization is working with "an external third-party strategic partner to offer zero-cost, zero-interest payment plans" to patients who have a desire to pay but may not be able to write a check for the entire amount at one time, Hurst says.
"Up until a year ago, we were still charging interest on patient payment plans. [Our strategic partner] recommended that we really needed to move away from charging interest. We should have recognized this previously because for the population we are dealing with, the dollars that are involved are often significant, so layering or adding interest on top of that creates more of a financial burden," he says.
"We are shifting the conversation, which has typically been focused on collections, to one that is about resolution and helping the patient find the best payment option for them… We are being more flexible and offering more options and moving away from things like interest-bearing loans so that we are not providing any disincentives for payment."
The results of this heightened level of patient engagement have been significant so far. For example, from 2010 to 2014, by working with patients through its financial assistance program, Florida Hospital has dropped its bad debt as a percentage of total uncompensated care on its uninsured population from 6.5% to 2.9%.
"In relative terms, we have reduced our bad debt by over 50%," Hurst says. "That's good for us and good for our patients."
Aligning Financial and Clinical Priorities
Another critical component to protecting the bottom line from revenue leakage is to develop what Hurst calls a "clinically aligned revenue cycle."
"In much the same way that we've focused on engaging with patients at a higher and better level, we are also doing the same thing with the level of engagement between our financial team and clinical team," he says.
Florida Hospital's care management team has reported up through the finance side of the business for about 25 years—something that has gone a long way toward aligning goals within the organization, Hurst says.
"On the inpatient side, it's looking at capacity, throughput, and the efficiency of workflows. It's really a triad model with our physician team, nursing team, and care management team to improve clinical outcomes and the efficiencies with which we are providing care," he says.
"A lot of what our care managers do today focuses on the appropriateness of admissions, the appropriateness of discharge, on patients who need post-acute care and on making sure they are going to the right care setting."
On the outpatient side, roughly 45% of patients who present in the emergency department are in need of services that could be provided in a lower-cost setting, Hurst says. By redirecting patients to alternate locations, care managers are helping Florida Hospital reduce the overall cost of the care it provides. Additionally, providing care at lower-cost sites means fewer dollars are at risk of non-payment.
"We have care managers in the ED, not only to monitor the appropriateness of admissions but… to try to do more with the uninsured, the working poor, and the Medicaid population to get them access to alternative care sites so they can get the care they need at the right price for them and, quite frankly, at the right price for us," Hurst says.
The Importance of Leading by Example
To mitigate the financial risk of uncompensated care and to meet other pressing organizational objectives, it's crucial to have a culture of teamwork and cooperation where everyone is working toward the same goals, Hurst says, noting that the best way top executives can achieve this is to set the example.
"I am very blessed that I have a very good relationship with our chief medical officer and chief clinical officer. I have been ordained, if you will, as an honorary member of our clinical team even though I am a finance guy. It starts at the senior level of the organization and those senior leaders have to lead by example, including your physician leadership," he says.
"By having that type of relationship at the senior level, it disseminates down to our teams and to the front line staff. It sends a very strong message and fosters a collaborative relationship."
In preparing to take on the financial risks involved with caring for defined patient populations, healthcare providers are finding value in their billing and coding data.
This article first appeared in the March 2015 issue of HealthLeaders magazine.
Most hospitals and health systems still operate mainly in a fee-for-service environment, but payment reform is on the horizon. As the healthcare industry evolves toward risk-based reimbursement structures and clinical protocols designed around population health management models, the role of the revenue cycle is changing as well.
Some hospital leaders are accessing claims data housed within the billing system to strengthen their organization's ability to provide high-quality, low-cost care and are redesigning finance functions to create processes that can adapt quickly to changing needs.
Shifting toward accountable care
About five years ago, University Hospitals in Cleveland, a 15-hospital system with more than 2,400 beds and $3.5 billion in annual revenues, launched the University Hospitals Accountable Care Organization to establish new care delivery practices for defined patient groups.
Instead of wishing for more time, the leadership team of one New York hospital has been working hard to ensure it is ready when the conversion finally happens on October 1.
While it's impossible to know for sure if ICD-10 will go into effect as planned on October 1, 2015, the hospital and health system executives I have spoken to recently are not banking on—or even hoping for—another delay.
[CMS says there will not be another delay.]
"I'm not sure there will be another groundswell that will delay it further. Of course, there is always the potential that the doc lobby will push for a delay, but I don't think you'll find at this point that [hospitals are] interested in seeing another delay. I think most hospital providers would prefer to take the hit than to keep doing this start and stop sort of thing," says Mark Bogen, chief financial officer and senior vice president, finance at South Nassau Communities Hospital in Oceanside, NY.
Instead of wishing for more time, South Nassau's leadership team has been working hard to ensure the organization is ready when the conversion finally happens. According to Bogen and Richard Rosenhagen, South Nassau's assistant vice president, electronic medical record, health information management and clinical documentation improvement, the hospital has implemented several strategies to help with readiness:
Mark Bogen
Senior VP and CFO,
South Nassau Communities Hospital
1. Reducing Staff Anxiety
South Nassau has been preparing for more than three years for the transition to ICD-10, which has given the hospital time to develop plans and put them into place in a thoughtful manner, Bogen says.
"We kicked off our steering committee in November 2011… This has helped because nobody feels like we are in crisis mode. We've been able to give it a lot of thought, energy, and attention, and we've been able to update our technology and tools."
By giving itself enough time to get ready, South Nassau has significantly decreased the level of anxiety its staff has regarding the change.
"The fact that we started early—about three years ago—to prepare staff has decreased the degree of angst because the concept is not really scary for staff now," Rosenhagen says.
"Sometimes the media jokes about coding things like 'skis caught on fire' or 'hit by bird' and these kind of things can make ICD-10 seem scary. But, our coding staff has been engaged in this over a long enough period where any angst or anxiety has been dealt with, and they know we are going to give them the toolset they need to enable the best coding possible based on the best documentation we can provide them. I think if we had started any later, that may have been a problem, but I don't think it will be for us."
2. Creating Physician Buy-in
South Nassau has also worked to mitigate apprehension amongst physicians. Three years ago, South Nassau formed a physician hospital organization to become clinically integrated in preparation for new state and federal regulations governing the healthcare industry. As part of this new partnership, the hospital sponsors quarterly education sessions for physicians and their office staff to help them prepare for ICD-10.
"This relates to the impact ICD-10 will have on physicians. It has nothing to do with the impact to the hospital. It's about what physicians' practices really need to know and how to document under ICD-10 for their own practices and professional billing," Bogen says.
"That has engendered a lot of good will because it is primarily driven by the impact it will have on individual physicians."
3. Hiring Coders from Within
South Nassau is located in a densely populated area on New York's Long Island and competes with other healthcare organizations to hire and retain coders—something that has been a particular challenge for the hospital. By focusing on ICD-10 for such a long lead time, South Nassau has been able to train coders from its existing employee base.
"It has been tough to both recruit and retain coders. In the past, most hospitals preferred to go out and find experienced coders and were poaching from each other and driving up the market from a cost perspective. We are always interested in getting good, experienced coders, but we decided in terms of recruitment, it may be easier to grow our own, although that can take more time," Bogen says.
"More and more employees are at least going to the coding classes and getting the certification because when working in HIM, there is a substantial difference in pay for those who are doing clerical work versus those doing coding."
On the retention side, South Nassau is allowing fully trained coders to work from home, which is a benefit many employees value highly and an advantage for a hospital that is pressed for office space.
"With our enhanced tool kit, we can now manage productivity from a remote site as well as we can when someone is within the four walls of the hospital. This also benefits us because we are not taking up valuable hospital territory with something that is not necessarily the best use of the space," Bogen says.
4. Upgrading Technology to Maximize Revenue
Another critical piece of ICD-10 readiness is having the technology in place to manage the process and maximize its potential positive impact on revenue. South Nassau has worked with a vendor to make the necessary enhancements to its IT systems.
"We have gone through and have now upgraded our systems and installed a suite of products that is ICD-10-compliant and has the ability for us to start coding in 9 and 10. The sooner you can start the dual coding, the better, even though it obviously creates issues from a productivity standpoint," Bogen says.
"You really need six months with dual coding to feel like you have any shot of being successful when the light goes on October 1st. This is to us where the opportunity lies and, to some degree, where the risk mitigation is."
The hospital has also installed a computer-assisted coding and natural language processor tool that "lays on top of the EMR," to improve its clinical documentation, Rosenhagen says.
"Using the CAC and NLP, we are able to uncover hidden components in the medical record that we might otherwise miss. With the tool examining the text, it allows the CDI nurse to get a really good picture of the case as early as the first day, and it promotes better documentation. When it sees some fuzzy documentation, it requests clarification and helps assure that the codes are accurate," he says.
Having more specificity in the clinical records will not only be important for coding correctly in ICD-10, it will also likely lead to more revenue for the hospital, Bogen adds.
"Better documentation is always a good thing and often leads to higher acuity and higher payments."
Executives attending the HealthLeaders Media Revenue Cycle Exchange shared how they solved two of the function's biggest problems.
At HealthLeaders Media's recent Revenue Cycle Exchange, held in Austin, TX, finance leaders from more than 20 hospitals and health systems came together for two and a half days to share with each other solutions to some of the biggest billing and collections challenges their organizations are facing.
Kathleen Bourgault
Two of the many success stories I heard were presented at the Idea Breakfast on the last morning of the event.
Agreeing on three priorities at a time
When Kathleen Bourgault, vice president of revenue cycle, joined Mary Washington Healthcare in October 2011, she arrived in the middle of what she calls "the perfect storm" for the Fredericksburg, VA-based health system.
"Mary Washington for years had been designated a sole community provider. In 2010, a 100-bed, for-profit hospital was built a few miles from Mary Washington Hospital. The loss of sole community provider status was estimated to be worth over $30 million in Medicare and Tricare reimbursements," Bourgault says.
"In the same period of time Mary Washington Healthcare had already started building a smaller facility to the north, towards the Washington, D.C., area in a growing but underserved market. Almost overnight we had competition, a significant reduction in reimbursement dollars, a major system conversion, and a still sluggish economy."
Bourgault says her first priority was cultural rather technical. She had to inspire the changes that were necessary for the organization to succeed within its new economic reality.
"Mary Washington had not experienced these kinds of financial situations in their recent history. I first needed to create a sense of urgency in the revenue cycle. I convened an executive steering committee, including the vendor of our HIS system because they were key partners," she says.
The next critical steps were to define priorities and get everyone agreed on the actions that needed to be taken.
"We created a meeting structure and prioritized items, because what I found was people weren't tying their efforts together. IT had their own list and revenue cycle had their own list. There were a huge number of consultants in there, and they had their own list," she says.
"Everybody had their own list of priorities, and they were working very hard with their individual lists, but nothing was happening. So the first thing we did was to create one list and identify three priorities per week. No more than that. Everybody was focused on those top three priorities. ... We developed cross-functional teams and then we developed process and action owners to make sure people were being held accountable."
One area of focus was central scheduling, which at that time was not integrated into the billing software. The result was a duplicate registration process where patient data was entered into two systems, resulting in long call wait times, patient and physician dissatisfaction, and a high percentage of denials for no authorization.
After hiring a manager, Bourgault says she began to reorganize the department to streamline processes and provide a better patient experience.
Jill Barber
Director of Managed Care
and Payer Strategy,
Southwest General Health Center
"In our high-volume practices, we actually placed a 'concierge.' The concierge can do it all, including scheduling, insurance verification, and pre-registration. Then we have a centralized team for those smaller offices, and they do the same functions," she says.
A crucial aspect for success was placing the right people in those important jobs. "We talked about the job competencies and the skill set that was needed. What did we really need for these people who are so key to our front door to gather the correct data and to provide great customer service and to be able to do both quickly? When we did a staffing analysis, we realized we didn't have the right skill set in all areas and we didn't have the right mix, so we had to focus on hiring and retraining the right people."
The improvements from all these changes were substantial for patients and the healthcare system alike. In less than a year, the average call wait time decreased from three minutes and seven seconds to 28 seconds, and no-authorization denials dropped from 2.6% to 0.5%.
"It was a big win," Bourgault says.
Engaging physicians in clinical documentation improvement
While most hospitals and health systems are working hard to improve the precision of their clinical documentation, these efforts can be futile unless physicians are invested in the process and understand the value to the patient, the organization, and themselves.
Jill Barber, director of managed care and payer strategy at Southwest General Health Center in Middleburg Heights, OH, says that although the hospital has had a CDI program in place for years, its case mix index was in decline while length of stay and complications were on the rise.
"CDI and the idea of case mix index erosion really started becoming front and center as an issue for us" in 2012, Barber says, noting that Southwest General added clinical documentation specialists to its finance team to help deal with the concern.
"They were all seasoned CDI nurses, but our physicians were very easily able to ignore them. … We had physicians who would take the stairs to go around the CDI nurses. It really was not a good relationship."
As a result of the lack of cooperation from physicians, the query response rate for clinical documentation-related questions was less than 20% for the hospital, and a lot of money was being left on the table, Barber says.
In the fourth quarter of 2012, Southwest General piloted a query process program with the 13 physicians who are part of its cardiovascular service line's co-management company. Queries were sent via email through the electronic medical record's message center. For the first time, physicians were able to respond easily, and the impact was clear. For these 13 physicians, the query response rate rose from 23% to 75%, and there was a significant decline in duplication of queries.
"The physicians were really getting it, and also, we noticed we weren't querying them for the stupid stuff anymore. … We really hardwired the process, and basically what happened was we were seeing such significant results we said this was no longer a pilot, and we began to hardwire the whole process across all physicians."
The impact on revenue was substantial, Barber adds. "For us, in one short year, it was $1.4 million in additional revenue for our cardiovascular service line. To put that into perspective, that is over 3% of that service line."
Additionally, the organization-wide case mix index has increased by 7.6% because physicians are now capturing a more complete and accurate picture of their patients' severity of illness. Along with benefitting the hospital's revenue cycle, the higher CMI means patients' medical records are more precise—which can help improve quality—and physicians receive acknowledgment for treating sicker patients.
A key to the program was engaging physicians in a way that matters to them, Barber says. "I think this speaks to them on a more real level than just the idea that the hospital wants more money. You are telling them to get credit for the sick patient that they are really taking care of. I am saying, 'Let me tell your story through the codes you put on the bill about the high-quality doc that you really are.'
"The main takeaway is pretty evident. We were not able to really be successful in a CDI program until we engaged the physicians," Barber says.
Southwest General is now focusing on engaging physicians outside of the cardiovascular service line to expand the positive impact of the CDI program, she says. "The query response rate for all physicians is still only 46%, and our goal is to get over 80% for the organization."
Revenue cycle leaders attending this week's HealthLeaders Media conference say clinical documentation and high-deductible health plans are among their top worries. Here's an advance look at solutions.
Later this week I will be at HealthLeaders Media's first Revenue Cycle Exchange in Austin, TX, where I will have access to 25 hospital revenue cycle executives for two days of discussions on their organizations' top strategies for improving billing and collections practices.
Wade Wright
Director of Hospital Billing
West Tennessee Healthcare
As the moderator of one of the three roundtable tracks that are the cornerstone of the event, I will have a front-row seat to hear what's working, what isn't, and what challenges are on the horizon as the healthcare industry continues to evolve towards value-based care. And if my past experience as a moderator holds true, I'll come away with a laundry list of ideas for future columns as our Exchange members share ideas for solutions to some of the biggest problems they face when it comes to getting and retaining payment for services provided.
Identifying the major issues
Before HealthLeaders convenes a group like this—which we do several times throughout the year for our Exchange program, including our CFO Exchange, CEO Exchange, Population Health Exchange, and CNO Exchange—we survey attendees to get a sense of the topics they would most like to discuss during the roundtables.
In the Revenue Cycle Exchange pre-event survey, it was pretty clear what issues are top-of-mind for our attendees. When asked to identify the three biggest threats to their organization's revenue cycle, 79% cited incomplete clinical documentation, 71% cited high-deductible health plans, and 64% said RAC audits and the two-midnight rule, which ultimately are documentation issues as well.
Wade Wright, director of hospital billing at West Tennessee Healthcare in Jackson, TN, told me in a recent telephone conversation that his organization has been working to improve its clinical documentation for years and has found that increasing communication between coders and physicians is one key to success, especially while the patient is still in the hospital.
"One thing that has been a big initiative for us relates to improving our mid-cycle analytic platform and really tying it to our clinical and financial operations. Previously, coders weren't reviewing the documentation until everything was said and done. Now we are making a push to do concurrent coding so that the coders can go back and ask for more specificity immediately while the patient is still there and the physician is still actively working with them," Wright says.
"Now that we have our electronic medical record, coders can also look at changes in DRGs, like a surgery or something that results from test results. We have complex rules built into the ERM system to have another opportunity for coders to look at that and go back and get more complete documentation. It's a whole lot better to do that while the patient is still in the hospital."
Jackie Powers
Director of Patient
Financial Services,
Anne Arundel Medical Center
By capturing more accurate clinical documentation, West Tennessee has improved metrics such as its case mix index and length of stay, which helps to strengthen its revenue cycle, Wright says.
"We are looking for those documentation opportunities and are really pushing toward making improvements," he says.
Jackie Powers, director of patient financial services at Anne Arundel Medical Center in Annapolis, MD, tells me her organization is also placing a big emphasis on better clinical documentation.
"Like everyone else, we're focused on what documentation is in the patient record to support the charges because it's that medical record that determines whether or not there was medical necessity for the treatment," Powers says.
"Within our organization we have a reimbursement and compliance department, and we have a compliance and audit specialist that keeps abreast of changes in coverage and sends that information to our clinical directors. In addition to that, we are proactive with doing audit work and looking at the documentation and the medical record to make sure we documented appropriately and charged appropriately. A formal report is created and that information is shared with our clinical directors in a proactive way."
Powers notes that as the walls that have traditionally separated the finance and clinical teams come down to create a more integrated culture, physicians are generally on board with the changes. She says physicians and clinicians want the assistance in improving their documentation because they know it improves the fiscal health of the organization and can also positively impact the quality of patient care.
"I think, at least at our organization, that our clinical directors and physician leadership are grateful for the support," she says.
The increase in high-deductible health plans
It's not surprising that high-deductible health plans are of major concern for the finance leaders who are attending the Revenue Cycle Exchange. These plans have been a growing trouble spot for healthcare providers for years and are expected to become more widespread.
"We've been seeing more high-deductible health plans for a while now, and we think that they will continue to grow in number," Wright says.
To mitigate the effect on revenue, West Tennessee Healthcare is educating patients more intensively on what coverage their plan really provides—something Wright says is particularly necessary because employers are not doing a good enough job of providing information as they move employees into high-deductible plans.
"The human resources departments at many employers are not medical benefits specialists, so they do the best they can, but they are not always doing a good job of explaining these benefits and how they work. As much as possible, we are trying to do a whole lot of education on people's benefit plans," he says, adding that finance representatives from his group visit area employers to provide on-site education whenever possible.
Helping patients access coverage
In addition to the three major revenue cycle threats identified in the pre-event survey, Powers considers Anne Arundel's self-pay patient population to be a big challenge. The system is working to help patients gain healthcare coverage, she says.
"We are actually doing an entire financial screening and attempting to enroll patients into Medicaid if they are eligible, or if not, to refer them to the exchanges. If an individual doesn't qualify for Medicaid but hasn't reached out to the exchange, we'll help facilitate that process. We are taking a different perspective of being there as a patient advocate and helping to guide them through it." Although coverage purchased on the exchanges is not retroactive, it may cover future medical visits.
Another piece of the financial counseling, Powers says, is to help patients understand that they may be eligible for coverage now even if they have been denied before.
"Some people didn't take steps to enroll in the first wave of the exchanges because they had been declined for coverage in the past, and they assume they don't qualify. But now it is purely based on income, not on whether you have assets that may have disqualified you before."
Watch the pages of HealthLeadersMedia.com for more on revenue cycle and healthcare finance issues, including follow-up coverage of our Revenue Cycle Exchange.
By zeroing in on quality variation improvement and holding regular meetings between finance and clinical leaders to review data, the $3.4 billion institution has been able to significantly reduce expenses and to achieve physician and nursing buy-in.
When the leadership team at Yale New Haven Health System set out two years ago to cut $125 million in costs and reduce its cost per case by 20%, its focus was on improving quality and reducing variations in care.
By zeroing in on quality variation improvement, the system has been able to reduce expenses and to achieve physician and nursing buy-in, which is a critical component to finding sustainable efficiencies, says Steve Allegretto, system vice president, analytic strategy and financial planning at the three-hospital, $3.4 billion institution.
"The best way to get clinicians to view it is to present it from a patient quality standpoint. We've been able to build trust in this process between the financial and clinical people that we have never had before, and this trust is a major part of moving this organization forward," Allegretto says.
"It's hard to talk to physicians and [nurses] about the cost per case when you are talking about a person's life, but if we can say, 'here's a case where something happened to a patient that we wouldn't want to have happen to one of our family members,' then we can generate a discussion that can lead to improved care and improved margins."
Improving Communication with Data
By integrating data from its patient electronic medical record, business data systems (including cost accounting for hospital and physician activity), and quality algorithms (including clinical registry data), Yale New Haven has been able to produce reliable, actionable data that has advanced the conversation with physicians and nursing, Allegretto says.
"This is something I've been trying to do within our organization for more than 15 years—that is to get clinical and financial leaders sitting at the same table to talk about process of care variation. Using the process variation data to look at the quality outcome side of care has led directly to an analysis of revenues and costs," Allegretto says.
He adds that this data analysis has consistently demonstrated that there is a direct relationship between process, quality, cost, and revenue and net margin variations.
"The old thinking was that we collected more revenue on those complicated cases where there may have been variations in care and outcomes for patients. We now realize that the contribution margin, as a percent of revenue, is higher for cases that don't have variations in quality. We showed that improving quality has improved margins. That went a very long way to building a common understanding and a common language to engage physicians, nurses, and other clinicians to lead improvement efforts," he says.
Developing a Common Language
That common language developed by Allegretto and others at Yale New Haven is called quality variation indicators (QVIs), which are potentially avoidable clinical complications and adverse events that occur due to variations in care. Yale New Haven now tracks the monthly trend of 27 QVIs, such as central line-associated blood stream infections and deep vein thrombosis, both organization-wide and by clinical service line.
Finance and clinical leaders meet regularly to review data around QVIs, to discuss their impact on quality and cost per case, and to find ways to improve and standardize care. These data are also highlighted in the monthly financial statement close package—another sign of the cultural integration of quality and financial data, Allegretto says.
The results have been considerable. For example, between 2012 and 2014, one of Yale New Haven's hospitals reduced its cases of ventilator-associated pneumonia from 18 to four, saving about $84,000 per patient.
"Not only have we avoided the pain and suffering of patients, but we also reduced our expenditures by $1 million dollars between 2012 and 2014. This alignment between clinical and finance, with a common set of metrics and goals, has led to unprecedented alignment of efforts and clinical and financial outcomes, results that we can all get excited about," Allegretto says.
Identifying and Preventing Variations in ICU Care
One area where most hospitals, including Yale New Haven, experience considerable clinical variation is in the ICU. Allegretto says that the complex medical situations of the patients who are treated there make it challenging to standardize protocols. This can result in variations in care and create an environment where patients are at a higher risk for complications and longer ICU stays.
"We are very focused on process changes, including the use of technology and real-time data aggregation, to and stays," he says. "ICUs are not only among the most expensive units of the institution, they also have one of the highest rates of QVIs."
To reduce variation, Yale New Haven has been developing plans to institute real-time monitoring of patient data by the centralized SWAT (specialized workforce for clinical interventions on seriously ill patients) nurses with a goal of preventing or intervening sooner in deterioration of all of its patients, including those in its ICUs.
"Our goal is centralized remote surveillance of 100% of all of our medicine and surgery patients. We hope to reduce variations in care, improve identification of patients with problems, and thus improve our outcomes, including our length of stay in the ICU," Allegretto says.
"It has long been known that inpatient hospitalization is a risk for hospital-acquired conditions, and we now know that these conditions, like QVIs, occur more frequently among patients in the ICU. Our goal is to intervene before patients need to be transferred to the ICU and to reduce their length of stay."
Having Difficult End-of-Life Discussions
While having conversations about end-of-life care is not easy, Allegretto says helping patients and their families understand that these difficult clinical decisions are based on data and are intended to avoid ineffective and, at times, uncomfortable procedures or care is important for improving care and lowering costs.
Between July 2011 and May 2013, 95 patients in one of Yale New Haven's hospitals spent at least one night in the oncology unit before being transferred to the ICU, where they died, he says. As a result of the transfer to the ICU, the health system incurred about $1.3 million in direct costs that potentially could have been avoided while patients received high-cost interventions, which may have extended their lives but did not save them.
"We need to look at how we can better predict the impact of end-of-life interventions, including ICU transfers. We also need to engage in a national discussion regarding end-of-life care and engage patients and their families in these critical decisions. We need to be talking about how we can identify those patients where we should be having palliative care discussions," Allegretto says.
"It requires a recognition by the organization and the clinicians across multiple disciplines that we are going to build in a process that allows for the identification of those patients for those questions to be asked. I realize this is not easy stuff. We are not making cars or widgets. We are trying to standardize very complex care for individual patients… so we need to get this right and give patients, their families, and clinicians the right tools. By identifying and reducing avoidable quality variation, we will provide higher value to our patients and continue to bend the cost curve."
The giant safety-net hospital responds to healthcare reform, high-deductible health plans, and concerns about equity by rebranding and expanding its charity care program.
H. Gene Lawson
Parkland's Senior Vice President,
Revenue Cycle
Like many provider organizations, Parkland Health & Hospital System—the famed 968-bed, safety-net institution based in Dallas—has seen an increase in patients with high-deductible health plans over the past year.
As more patients purchase coverage through health insurance exchanges to comply with the Patient Protection and Affordable Care Act's individual mandate, the system's leadership expects that trend to continue in 2015 and beyond, says H. Gene Lawson, Parkland's senior vice president, revenue cycle.
"Thousands of people signed up for ACA plans in the first year. These are poor people who a year ago got charity care. Now they have insurance plans with very high deductibles and out-of-pocket costs, and that number will increase because a lot more people signed up this year for those plans," he says.
Making charity care more inclusive
To keep pace with this shifting financial landscape, Parkland recently announced that it is rebranding and expanding its existing charity care program to include a broader spectrum of patients. As of March 1, the system is replacing its Parkland HEALTHplus charity care program with the Parkland Financial Assistance program.
The reason for the change is threefold, Lawson says: to clarify what the program offers, to help more patients meet their financial obligations to the hospital, and to prevent patients from avoiding necessary medical care.
"The name Parkland HEALTHplus was misleading for some people because it sounded like a health plan. Some people weren't applying for ACA plans because they thought they already had an insurance plan so we needed to address that," Lawson says.
Additionally, Parkland wanted to provide some assistance to low-income patients who do have a health plan but still struggle to pay their bills. The new program has been overhauled to include more patients.
"We revamped the plan to include people who are at 200% of the federal poverty level. We don't write off their copays or deductibles, but we do take it down to a level that is based on their income and their ability to pay," Lawson says, noting that the new policy is also designed to make Parkland's charity care more equitable.
"With the introduction of the ACA marketplace plans a year ago, we realized we had some inequities in our charity care policies. We gave millions of dollars in charity care to undocumented people, but if you are legal, you had to purchase insurance and could no longer qualify for free care. What we are really doing is being consistent in our charity guidelines so that we are only charging people what they can afford to pay," he says.
Increasing access to care
Another motivation for the expansion of the charity care program is that Parkland's leaders were concerned patients would forgo care out of worries over paying out-of-pocket for medical bills.
"We were afraid that patients would not seek care because they are worried about that large expense. Our CEO is a physician, and one of his big concerns is that patients with high out-of-pocket costs will delay getting care because they can't afford it. We can't let that happen. Patients are what we are all about. They are why we are all here," he says.
"One of the things I sincerely believe is that this will help people who would otherwise delay care until they end up in the emergency room. Many times what could have been a minor condition ends up being an emergency because people don't get the care they need."
Improving the bottom line
Because Parkland is a public safety-net hospital, about 80% of its accounts receivable are charity, self-pay, and Medicaid accounts. And while it can be difficult to collect from this low-income population, Lawson says the hospital is helped by having more patients with health coverage, even if it is through high-deductible plans.
"It's difficult to collect because if you are at 200% of the federal poverty level and are paying premiums for the first time, you probably don't have much [money] to be able to pay. But, a year ago, they were charity care so we didn't get paid anything. Now with the ACA plans, we are getting paid something. I'd much rather have something than nothing."
Lawson adds that although Parkland provides emergency care whether or not a person has the ability to pay, the hospital may take a harder stance on other procedures as a way of protecting revenue.
"If it's an emergency, we are going to see them regardless, but if they don't pay their part of the copays and deductibles, elective procedures may not be scheduled."
Meeting the mission
With its new charity care plan, Parkland has shown that it is willing to adapt to outside forces, Lawson says, such as reform legislation that is creating changes for healthcare consumers.
This kind of flexibility is critical to the system's long-term financial success, he says. "A huge amount of manpower at Parkland was put into developing all of this and trying to be as fair as possible to everyone. We jokingly say our policies are written in pencil because if the external world changes, then we have to change our approach. Our mission must continue, so we have to find ways to keep our doors open."
With all the issues provider organizations are facing, senior hospital and health system administrators just may not have the bandwidth to place a lot of focus on price transparency right now. That will have to change.
With more patients moving into high-deductible health plans and taking on a greater financial responsibility for their healthcare, price transparency will become increasingly important over the next several years.
Yet, hospitals and health systems may not be placing it very high on their current list of priorities. According to a recent survey fromStrata Decision Technology—a Chicago-based healthcare IT company—only 6.4% of respondents ranked price transparency as one of their organization's top two strategic goals. It comes in far behind cost reduction (66.1%), strategic growth (58.7%), quality and patient satisfaction (50.5%), and building out ACO relationships (12.8%).
Why doesn't price transparency rank higher? Here are five obstacles that may be preventing progress:
1. There are Too Many Other Priorities
One of the organizations that participated in the survey is Mission Health System, a seven-hospital system based in Asheville, NC.
Larry Hill, vice president of finance at Mission, says that with all the issues provider organizations are dealing with, senior administrators just may not have the bandwidth to place a lot of focus on price transparency right now.
"Price transparency involves such a multitude of facets that you have to get your arms around, and it is a very complex issue," he says.
"In the face of all that CFOs have to satisfy with Medicare and Medicaid reimbursement issues and the slowdown in patient volumes, it probably just hasn't made it high on the ranking of what they may be interested in."
2. There's a Risk in Being First
Additionally, Hill says, there is a perceived risk involved with being among the first in a market to provide detailed pricing information to healthcare consumers.
"Until they are required to do something about price transparency, [providers] probably aren't going to be willing to step out first because it is a leap of faith when you are doing something that no one else is doing yet. There may be a fear of being disadvantaged by it to a certain degree. Even at Mission, I'm pretty sure we aren't stepping out first on this," he says.
Hill says hospitals may also shy away from moving first on price transparency out of a concern that this information could overshadow data on quality and patient outcomes as consumers decide where to receive their care.
"Transparency is going to drive a lot of consumerism, and hopefully, price is taken into consideration with quality of care and an organization's commitment to safety because those are also a part of the value of the care that is being provided," he says.
3. Customized Care Makes Transparency Difficult
One of the biggest challenges for hospitals and health systems is to supply useful and accurate pricing information because every patient's situation is different, Hill says.
"It really is difficult to get your arms around it and provide something you think is meaningful to the patient because every patient is unique in their care and that translates into every patient being unique in what they are charged. Healthcare is very individualized and heavily customized so to try to predict and give the patient something meaningful upfront is a hard thing to do."
In lieu of providing specific pricing information, Mission gives a price range, Hill says.
"There has always been on our website—and there still is now—a contact number and email address if you would like to speak to someone or to get an estimate of the charge for your particular care. We can provide a range for that. It doesn't mean we are putting prices on our website, but we do have resources available in our billing department to provide that information," he says.
"We would provide averages because once a patient goes through a procedure, it could wind up being more or less depending on how many resources are actually used. Something could cause it to deviate from the average."
4. Legislation Only Requires Pricing Averages
While some states are mandating more provider reporting on price, new laws may not be enough to give consumers information that is truly useful.
North Carolina passed the Health Care Cost Reduction and Transparency Act of 2013, House Bill 834, which requires providers to supply pricing data to the state on a quarterly basis for their top 100 inpatient DRGs, their 20 most common outpatient imaging procedures, and their 20 most common outpatient surgical procedures.
Hill says he's concerned that the information is not very helpful to consumers because it is still not specific to them and the figures are just averages.
"We're not sure when the data gets in the hands of patients if they will be less confused or more confused. It still requires a lot of work on their end to figure out what the costs are really going to be to them," he says.
"The data is based on averages, on what we are charging on average and on what we are being reimbursed on average… If the patient is comparing prices, it will probably still result in a phone call or email to say, 'This is my treatment and this is my insurance. Can we have a little more dialogue about that?'"
5. Accessing System-Wide Data is Cumbersome
For multi-site healthcare organizations, collecting and analyzing data from across the system is another big obstacle to transparency, Hill says.
Mission's six acute care hospitals are required to submit quarterly data to the state. Its seventh hospital—a post-acute care rehab institution—is not required to do so at this point.
"We have submitted two quarters of data now, and we are still far away from making it a smooth process. It has created a significant amount of work to pull together the data on a quarterly basis," Hill says.
Organizations that are not required by law to take on the burden of compiling this data may opt out because it simply may not be worth the time and effort.
As for Mission, Hill says the system has been helped greatly by having most of its hospitals on one technology platform and by its detailed cost-accounting system.
"Most of our hospitals are on a common IT platform, and we are able to pull a lot of cost accounting and revenue cycle information from that… We are probably in a better position than most [organizations] because of our robust cost-accounting system."
