THE BUSINESS OF HEALTHCARE

THE BUSINESS OF HEALTHCARE, PREVENTING, NOT CORRECTING THE PROBLEMS

 

When we hear the word hospital or healthcare our thoughts automatically go to patient care which is not unreasonable. Yet, one must remember that there is also a business side to healthcare. If it is not treated as a business there will not be enough revenue to fund it for survival. As it is right now, it has been said that the operating or profit margin for healthcare dropped by 55.6% in 2020 mostly due to the pandemic.[1] Still, the pandemic put a squeeze on nonprofit hospital margins last year, according to a recent Moody’s report that showed the median operating margin was 0.5% in 2020 compared to 2.4% in 2019.[2]

Reimbursement for services provided is low, payers are constantly clawing-back payments with egregious denials, and pharmaceutical and vendor charges are high amongst other financial challenges. This article will focus on hospitals and healthcare systems specifically and clinical revenue cycle.

 

To ensure the integrity of care and appropriate reimbursement, documentation is a critical factor, most of which is the responsibility of physicians. There is a definite lack of education for physicians on the business side of healthcare. Other areas such as nursing, physical therapy, dietary, wound care, and others document in the medical record, but these components must be included in physician documentation to count. It is this documentation that must be accurate to support the codes that are utilized for the final billing. This documentation involves telling the patient story from admission to discharge, with initial and final diagnoses, tests being ordered, medication given, test results, revised diagnosis, physical therapy, diets, patient progress or lack thereof, etc. All this information resides in an what is referred to as the electronic medical record (EMR). Everyone that has anything to do with a patient’s care has to properly document anything to do with that care in the EMR.

 

That EMR is also used in the business aspect of the hospital as it was originally designed to be a billing tool.[3] Since it contains everything there is to know about a person’s stay, it serves as the basis for proper and accurate coding for billing purposes. Only accurate coding will translate into sustainable revenue for the services rendered. In today’s world hospitals and healthcare facilities are constantly dealing with payment issues and denials for a multitude of reasons. A major one is that insurance companies are constantly denying payments and based on their contracts and standards, they have that right.

 

With that as background it is important to note that from admission to discharge a hospital stay is said to be a complicated episode where there are so many involved parts, multifactorial, collateral, and unique situations. As opposed to non-healthcare industries, the medical world tends to focus more on correcting the errors that occurred at the end of the episode as opposed to finding means of prevention of the occurrence. If one looks at the Saturn V rocket that took astronauts to the moon, the number of errors that occurred were miniscule due to extreme efforts to prevent them during the development of that rocket.[4] Why cannot this concept be accomplished in healthcare?

 

In order to delve deeper into defining the myriad of problems that exist and finding solutions of prevention, a small team of experts (all listed as co-authors) in their field were gathered to study this and brainstorm. These experts understand that there are people in healthcare living with the problems and it is well known that those living with the problems are knowledgeable and extremely creative. They will always find a way to fix the problem, hopefully without resorting to workarounds. Their knowledge of the processes is priceless.

 

However, there is another side to this because as much as they can help, unknowingly they can also impede improvement. They may be so involved on the tasks and functions that they might not have the ability to see the overall picture. The purpose of this team of experts is to serve as process improvement specialists, as they have the ability to  see the entire picture from a 10,000-foot view and they understand how the process should be. As from the old expression, they can see the forest through the trees from that view. The staff doing the work, those boots on the ground, are so entrenched in the trees that they do not have the ability to see the entire forest and can’t simplify the situation.

 

Think of it this way with a football analogy. The moderator of this brainstorming team has a background as a coach of a football team. As we all know, the players, the team, plays the game and the coach doesn’t. However, the coach has the ability to sit in the press box and get an overall view of the entire field from that elevated view which allows him to see things happening that the team can’t. Working together, they make the right changes to win the game.

 

Process Utilized for Brainstorming

 

As with any process, regardless of the industry, a successful process must have the following criteria, with the acronym MPDT.

 

M – Mission

P – Prevention

D – Dashboard

T – Teamwork

 

This brainstorming took the direction of clinical documentation integrity (CDI) as a foundational component for the business of healthcare. During the initial meeting, each member of the brainstorming team was asked to provide their view of what they perceived as a problem:

 

  • Trying to quantify problems, where they occur and to get people to recognize them.
  • Utilize standardization and accountability
  • Identify silos as they exist
  • There are very convoluted systems and too many people
  • No accountability, no control, lack of communications and coordination

 

The team agreed to the following mission statement: “Fostering documentation integrity in pursuit of capturing the patients’ clinical story”.           

 

The following is a list of the described players in the process and their role:

 

Utilization Specialists – work to review the medical necessity in the documentation and recommend level of care for patient in the hospital

CDI – (Quality Assurance) assures that the quality of the documentation provided supports the codes that are used for billing

Case Managers – responsible for the navigation and coordination of the progression and transition of patient care

Physician Advisor – provides expertise to all of the mandatory components as a clinical resource bridging the gap between clinical and non-clinical aspects and aids in the recommendation for level of care beyond commercial criteria

Coding – converts documentation to supportable codes

Physicians – provides, directs, and evaluates the medical care of the customer and documents and communicates this appropriately in the medical record

Nursing – performs and helps to carry out the patient care, insuring that physician orders are carried out, helping the patient and family navigate throughout the hospital encounter and document appropriately – can include Wound Care initial and follow-up care including documentation

Central Business Office (CBO) – review claims and ensure that they are accurate at the time of billing at the back end and paid appropriately in compliance with the UB-04, they are the clearing house for denials of payments

Quality – assures that everything occurs at the highest standard of evidentiary practices (excluding medical records)

Compliance – obeying regulations, standards, orders, rules, or requests and the state of being willing to do the right thing, having integrity and assuring accountability to meet those standards of the medical record (auditing)

IT/Informatics/Analytics – managing the EMR and the security such as HIPAA regulations

HIM/Medical Records – repository of the medical record, overseer of policies regarding the EMR

Practice Providers (APP) – physician extenders providing a lot of the care and documentation

Dietary – assess and manage malnutrition and other disease states and documents accordingly

PT/OT – assess and manage and documents accordingly, contingent on patient’s clinical condition

Speech – assess and manage and documents accordingly, contingent on patient’s clinical condition

 

Findings

 

These are bullet points as each member viewed it from their perspective:

 

  • Everyone tries to do their job to the best of their ability, which includes all the necessary investigation and rework to ensure quality patient care and accurate documentation that gets coded properly for billing purposes.

 

  • In CDI the number of queries can range from typically 20-40 per day depending on the size of the facility.

 

  • CDI reports tend to monitor tasks rather than the impact of their work.

 

  • Coding:
    • Complicated and not standardized
    • Good coders know they need to do their due diligence when assigning codes
    • Tends to be reactive and not proactive

 

  • The problems typically start with the onset of documentation. It became abundantly clear that doctors typically do not document well in the hospital setting. There are many possible reasons for this deficiency, such as:
    • It is not taught in medical school
    • Doctors are more concerned on care and less on documentation

 

To further complicate the issue of poor physician documentation, the executives of a hospital are not willing to address the issue many times. Simply talking about a problem isn’t addressing the issue. To address an issue, there has to be discovery, follow-up, and consequences for failure to improve. Simply put, if there isn’t a consequence for speeding, why would people stop speeding?

 

However, this is a double-edged sword for hospitals. Potential solutions:

  • It seems that they should want to hold doctors more accountable but if they become too prescriptive, there is a fear that the doctor just might take his/her services to another hospital. This could have a significant bearing on hospitals regarding both finances or revenue and reputation. It would take a concerted effort by many hospital communities to rectify that situation.
  • Another possible solution is either instituting documentation improvement in medical school or a government mandate with specific standards, neither of which will happen anytime soon.

 

Unfortunately, at the present time the major emphasis seems to be on correcting the problems and very little effort on being proactive with prevention.

 

Potential Solutions

 

To alleviate the problems, one needs to focus on Prevention, a Dashboard, and Teamwork. People tend to concentrate on issues that are both Important and Urgent, issues that are a crisis, pressing problems, and deadline driven issues. Actually, people that continually work out of this quadrant are considered to be urgent dependent.

 

Below is The Eisenhower Decision Matrix which comes from business thinker Stephen Covey who popularized this matrix in his book, The 7 Habits of Highly Effective PeopleIn that book, Covey created a decision matrix to help individuals make the distinction between what’s important and not important and what’s urgent and not urgent.[5]

 

 

 

For a proactive approach, one needs to prioritize efforts on important issues that are non-urgent as outlined in quadrant II above. Topics that fit that criteria are preparation, prevention, planning, true re-creation and empowerment.

 

Everything listed in that quadrant is very important but as one can see, none of them are urgent. Nothing listed in that quadrant are deadline driven, a pressing problem or a crisis. However, concentrating on the topics listed in quadrant II will make your organization that much better and in time will actually reduce the items that are presently urgent.

 

It takes both determination and a concentrated effort to shift both your focus and others to these topics. Plus, all the pressing problems and deadline driven items will eventually consume your attention once again. It is highly recommended to schedule an hour a day to these topics. As time permits, try to increase that time.

 

Prevention

 

Concentrating on prevention, not correction, is the first step to achieving the goals of revenue preservation in the business of healthcare. Problems will constantly arise, especially when 20-40 plus queries occur daily depending on the size of your facility just looking at CDI as one area of concentration. We know these problems are being fixed but, unfortunately, the next step of prevention doesn’t occur because it is not necessarily a natural sequelae. In essence, the urgency has been satisfied because the problem has been fixed. So, off to the next problem.

 

For continuous improvement, it is important to take the next step when the problem has been resolved. Simply ask, what can be done to prevent future occurrences of that problem? And one of the canned answers to that question is that it does not happen that often. Well, that can’t be the answer for 40+ queries. Queries, per se, are not the problem, but focusing on the number of queries daily as a key performance indicator (KPI) is. One must monitor the process, not the tasks.

 

In order to gauge the solution a standardized approach must be undertaken. It is important to log the problem, the corrective, and the preventative actions. It will come into play in the future. People will remember problems when they re-occur, and it will be a great reference to see what corrective and preventative action was done in the past. In fact, knowing previous preventative action that didn’t resolve the actual problem, will be instrumental to hone in on the root cause of the problem.

 

These simple questions can help one to accomplish this:

  • What are you trying to accomplish?
  • Why?
  • What have you tried before?
  • What are your goals?
  • What are your indicators of success?

 

Correcting a problem is just that. It is doing what is necessary to correct what is wrong. For example, coding doesn’t know what the correct code is to ensure payment. The appropriate people get together and correct the record so it can be coded properly. However, what was the root cause of the problem? What caused the problem in the first place? That’s what preventative action does. It forces us to find the root cause of the problem and implement action to fix it. Only then, will future occurrences be stopped.

 

Dashboard

 

Continuing on the CDI component, a simple dashboard tracking a couple phases of queries should be created. It needs to track the quality of the system and is the pulse of the situation. Based on the information extracted from the brainstorming session, the initial tracking item should be queries and it should consist of the following:

 

  • Queries issued per day
  • Queries resulting in a correction per day
  • Queries where prevention was investigated, and action taken

 

The quantity of suggested items can vary from day to day. Therefore, one should also track the total quantity on a weekly basis and create a line graph. This will allow for trend analysis. Are things getting better, worse or staying the same. This is a key factor. The dashboard is a work-in-process and might require changes once data is being captured.

 

Teamwork

 

Teamwork is crucial to the success of continuous improvement. Coaching is also important but again, it is the team that wins the game. The team being proposed is not a department team; it is a cross departmental teams or cross-functional team. This team should be comprised of the people that can actually work the goal. Each department has their responsibility to insure everything comes together as a whole. But it must be a holistic approach where no one part is more important than the whole.

 

The personality composition of these teams is very important. A mixture of four types is needed as taken from the DISC personality profile[6] and it is essential that each personality is represented:

 

 

D – Dominance

Decisive, organized, optimistic, and strong willed. Very task orientated

I – Influencing

Easygoing, witty, optimistic, and outgoing. Highly relationship oriented

S – Steadiness

Pessimistic, soft-spoken, and artistic. Good at analyzing and goal oriented

C – Cautious

Pessimistic, strong-willed, and soft spoken. Good analyzers

 

An inspirational person is needed to celebrate the victories. A cautious and steady person is needed to ensure the quality. They are good at analyzing the data. The driven person is needed to ensure the process runs properly and meets the daily requirements. The important thing to remember is that each personality sees the task at hand differently. Working together, collaboratively, holistically, they will accomplish a great deal.

 

The brainstorming team created two teams as a proposed template for success:

  • Consensus
  • Escalation

 

The Consensus Team should have weekly meetings and consist of the following areas:

 

  • Coding
  • CDI
  • Denial team

Note: the members of the team will be the people actually doing the work and working managers

 

The Consensus Team will request ad hoc members as needed, which are:

 

  • Clinical Staff – nursing, physicians, physician advisors
  • Directors
  • Regulatory
  • Revenue Integrity
  • Quality

 

Purpose of the team and meeting:

 

  • Review the amount of queries
  • Review the amount of repetitive queries
  • Review the method or resolution in correcting the problem
  • Most importantly, review preventative action and its effectiveness
  • Ensure preventative action has been implemented

 

For those issues that could not be resolved by the Consensus Team, they will be sent to the Escalation Team. The sole purpose of this team is to resolve the issues that the Consensus Team could not.

 

This team will meet as needed and will consist of the following:

 

  • Working managers from the Consensus Team and the directors of those areas

 

Both the working managers and directors will request ad hoc members to the meeting as required. The ad hoc members will consist of the same areas as listed for the consensus team.

 

Potential Drawbacks

 

As with anything, there are always drawbacks with the two biggest being “change is hard to implement” and “avoiding conflict” and both are viable concerns. Change is hard to implement. Everyone has a comfort zone and implementing change takes you out of your comfort.  Secondly, when change is being implemented, conflicts can arise.

 

Many people do not like challenges, but don’t allow challenges to start the “blame” game. Placing blame doesn’t fix anything. Others are conflict averse and don’t confront the problem or people, so nothing changes. Stick to the facts of the situation. Only when one exhausts all other possibilities is it time to look at the operator.

 

 

SUMMARY

 

It all starts with keeping your eye on the mission, which is the integrity of patient care and appropriate reimbursement. And it all starts and ends with documentation. Accurate documentation is the vehicle for success. But remember that CDI cannot and must not do it alone.

 

Refocusing efforts is key to making this happen. Change the focus from fixing the problem to preventing it.  Over time, the problems will be eliminated. Step back and schedule time each day for prevention. Besides fixing the problem, take it another step further and determine how to prevent future occurrences of the same problem.

 

Refocus data collection to support the mission. Remember, monitor the process, not the tasks. Task oriented data only monitors quantity, which doesn’t support the mission. Instead, collect data that monitors the quality of your process and documentation. Monitor preventative action. How many problems have been prevented from happening again? How many problems re-occurred even after the preventative action was implemented? Monitor the success of the mission.

 

And most importantly, build cross functional teams. Trust and empower the team to do the right thing. Coach them. Remove the barriers that hinder them. The people that do the work is the key. They know the problems. Help them refocus on prevention. Empower them!

 

If possible, have someone oversee things from a distance. Like a drone, they see more. Questions need to be asked. Challenging others can be uncomfortable but done correctly, it inspires creativity.

 

So, if you are unhappy with what you got, then change. And if that change didn’t work, then change again.

 

 

 

AUTHORS

 

  • Jim Zelem EE, Process Improvement Engineer            Author of “Stepping Stones of Leadership”
  • Tiffany Ferguson, LMSW, ACM

Chief Executive Officer at Phoenix Medical Management, Inc

  • Jennifer Foskett MBA, RHIA, CPC

Healthcare revenue integrity analyst, healthcare business intelligence analyst

  • Sonal Patel, CPMA, CPC, CMC, ICD-10-CM

Healthcare Coder and Compliance Consultant at Nexsen Pruet, LLC ✦ Podcast Creator and Host for the Paint the Medical Picture Podcast series

  • John Zelem

Physician Owner at Streamline Solutions Consulting, Inc

 

 

 

 

 

 

 

[1] https://www.beckershospitalreview.com/finance/tumultuous-year-for-hospitals-results-in-55-drop-in-median-operating-margin-kaufman-hall-finds.html#:~:text=Hospitals%20across%20the%20U.S.%20saw%20their%20median%202020,new%20report%20from%20healthcare%20consulting%20firm%20Kaufman%20Hall.

[2] https://www.healthcaredive.com/news/how-hospital-operators-fared-financially-in-2020/597634/#:~:text=Still%2C%20the%20pandemic%20put%20a%20squeeze%20on%20nonprofit,especially%20hard%20as%20volumes%20fell%20drastically%2C%20seemingly%20overnight.

[3] Hersh WR, Weiner MG, Embi PJ, et al. Caveats for the use of operational electronic health record data in comparative effectiveness research. Med Care 2013; 51 (8 Suppl 3):S30–S37.

 

[4] https://en.wikipedia.org/wiki/Saturn_V

[5] https://www.artofmanliness.com/articles/eisenhower-decision-matrix/

[6] https://www.discprofile.com/what-is-disc/#:~:text=DiSC%20is%20an%20acronym%20that%20stands%20for%20the,and%20place%20an%20emphasis%20on%20accomplishing%20bottom-line%20results.

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