Speculate and Accumulate

Speculate and Accumulate

By John Zelem, MD, FACS

My father worked in a factory for 40 years working hard to support his family of a wife and four children. His job was working in what was called the “hot rolls.” The purpose of this machine was to reduce the diameter of a thick wire into a reduced diameter while it was red hot so that it was malleable enough to make this reduction. It would go through these “hot rolls” multiple times until it reached the desired diameter of a wire for the customer order. Remember that this was back in the 50’s and 60’s, way before more sophisticated automation took place. His task was to catch this red hot thick wire, over a hundred feet long, with just a pair of long pliers as it exited one reducer at a high rate of speed, flip it around as the rest of it trailed into a pit, turn around, and place the caught tip into the next reducer. This happened continuously until the desired diameter was achieved and then the wire was allowed to cool down and firm up.

Even though my father only made it to 6th grade, he had to be the “man of the family” since his dad passed by the time he was twelve and his work ethic always remained strong. He really was a wise man in his own way and had many, what I call,  philosophical phrases for a factory worker. The one that I remember and always resonates with me is this: “you need to speculate in order to accumulate.”

With that as background for the content of this article, the last several months for hospitals and health systems have been quite challenging with this COVID-19  healthcare crisis. According to the University of North Carolina’s Cecil G. Sheps Center for Health Services Research.  (Rural Hospital Closures)  more than 120 rural hospitals have closed in the past decade, including 18 in 2019 and 10 more this year through April. There are certainly more larger hospitals that have closed during this pandemic, furloughed employees and even physicians, mergers were postponed or cancelled as they suffered major financial losses. With today’s decreased profit margins, decreased revenue for services provided, and reduction in elective procedures, a significant financial hit has occurred. In addition, egregious payer denials have not subsided. Monies not collected from a payer is revenue that cannot be counted in the balance sheet, foregone revenue that must be generated and made up somewhere else

Revenue generation is key to financial survival, more so today than ever. The recent  AHA Article highlighting that the financial strain facing hospitals and health systems due to COVID-19 will continue through at least 2020, with total losses expected to be at least $323 billion. The AHA estimates overall average losses of $20.1 billion per month. Hospitals and health systems continue to furlough and lay off staff and cut other costs to address unprecedented financial challenges associated with dealing with the COVID-19 pandemic.

The question arises as to where do hospitals and health systems need to “speculate” in order to “accumulate?” “Speculate” as defined by www.dictionary.com is “to engage in any business transaction involving considerable risk or the chance of large gains….” With regards to hospital revenue cycle, the risk may be “considerable” equating to survival, and the gain may not be just financial but bringing back furloughed or laid off employees. I am confident you would agree that positive results are far superior to maintaining the status quo. For me, it is hard to understand how much pain financial executives must experience before taking that risk to change. Yes, change can be uncomfortable; is met with resistance, and can be associated with various degrees of failure. Yet failure is an event, not a process and without change, failure may potentially be imminent.

At the risk of being repetitious from a previous article, this analogy bears repeating. There is a story about a farmer sitting in a rocking chair on his front porch and his dog lying next to his side. Every once in a while, the dog would raise his head and howl, then lay his head back down. Later on, that day a salesman came by and started talking to the farmer. During the approximate 15 minutes of conversation, the dog did that about three times.

  • The salesman asked: “What’s the matter with your dog?”
  • The farmer replied, “Oh, he’s just laying on a nail.”
  • The salesman retorted, “Why doesn’t he move?”
  • “I guess it doesn’t hurt him enough!” the farmer stated with a smile.

What kind of pain must be experienced to motivate and prompt one to move off their nail, to speculate? What immediate actions must finance and revenue cycle initiate? Why not move off the nail before the pain is intense enough to make you move? Don’t accept the pain! Be proactive. How?

It’s simply back to the fundamentals, especially during these challenging times. You are not able to change your service mix. If you didn’t do cardiac by-passes before, now is not the time to consider starting. Your payer mix is not going to change. That’s pretty much fixed. You need to investigate and identify where you are leaving money on the table. Look at your patient care, evaluate and understand how you are managing it and ensure you have not lost sight of the crucial role documentation is playing. Physician documentation is the cement that joins all of the components of revenue cycle: utilization review (UR), case management, clinical documentation integrity (CDI), physician advisor, and coding as they all funnel into the revenue cycle.

Documentation helps define the acuity of the patient to justify the level of care that is ordered and validated in the UR process. Fundamental to operational performance of any clinical documentation integrity program is enhancing the physician’s communication of patient care through clear, concise, consistent, contextually correct, consensus driven documentation. This must be reflective of the patient’s clinical picture, clinical facts, clinical information and need for hospital level of care. Simply put, it is accurately telling and describing the patient’s story.

Partnering with case management, utilization review and physician advisors is essential to achieving optimal physician documentation as each of these discipline’s ability to perform their duties and responsibilities and is directly dependent upon the quality of the medical record content.

Documentation also has other far-reaching effects and has expanded its reach into quality measures such as Hospital Acquired Conditions, Patient Safety Indicators, Core Measures, and other documentation driven reportable measures of care.

“Speculation” means getting off the nail, taking action, getting back to basics. Breaking down the silos in revenue cycle so that there is collaboration in achieving documentation that is accurate and complete across all components. Telling the patient story to justify and support the care that is ordered and provided and focusing on meaningful documentation that best communicates the patient care. Hospitals deserve to get paid appropriately; this cannot happen with “shotty” documentation, and less than ideal efficient processes. It can be done but requires change with committed willingness to change.

How to Get Started – Back to Basics:

  • Perform a Gap Analysis
    • What are Best practices
    • Interview Key Players: Leaders and Staff
    • What gaps are there in your documentation practices?
    • This is a multifaceted process and will require
      • Planning
      • Education of all components
      • Getting buy-in – utilize your Physician Advisor
    • Look at the overall infrastructure, build sections at a time and incorporate into the whole
    • Start with the simple to build the complex
    • Holistic concept – each part affects the whole
    • Remember that DOCUMENTATION is the glue that holds it all together

Get off the nail, change can accomplished! Time is of the essence given the current financially precarious situation hospitals and health systems are face with.