Setting clear goals and rewarding leaders and employees for meeting targets are common factors in the incentive plans developed by North Mississippi Health Services (NMHS) and North Shore-LIJ Health System.
NMHS, a two-time recipient of the Malcolm Baldrige National Quality Award, encourages employees to adopt specific behaviors that directly impact the health system’s objectives. North Shore-LIJ uses a scorecard approach to unify a mammoth health system around common goals. In 2010, the health system won the National Quality Forum’s National Quality Healthcare Award.
How are you ensuring that NMHS employees and executives are focused on health system goals?
Brown: We created a clear and aligned connection between NMHS’s critical success factors—people, service, quality, finance, and growth—and employee behavior. To accomplish that, we identified “high-impact behaviors,” which are specific actions our employees take to positively contribute to our goals.
For example, a high-impact behavior for inpatient satisfaction is hourly rounding. Unit staff coordinate their schedules to ensure that someone checks on patients on a regular basis. This reassures patients and family members that we are checking on them both clinically and from a service perspective.
In the emergency department, a survey revealed that the top drivers of patient satisfaction are wait times and the patient’s perception of the quality of physician care. Our emergency department staff is keenly aware of reducing the amount of time people spend in the ED, but that isn’t always possible. When long wait times are unavoidable, staff can minimize patient frustration by executing the high-impact behaviors that we’ve identified. These include setting expectations on arrival, updating patients on a regular basis about how long they can expect to be in the emergency department, and letting patients know what the next step in the care process will be.
To underscore the importance of patient satisfaction, hospital staff members have the authority to spend up to $50 to fix a patient complaint. For example, if long wait times meant that patients missed lunch or incurred extra travel charges for a return trip, staff members can offer to buy them a meal or reimburse expenses.
What approach is North Shore-LIJ taking?
Cabral: At North Shore-LIJ, we first ensured that the health system’s goals were meaningful and reflected areas that would lead to success. We talked with senior leaders and found that the goals they were focusing on were different than those that the health system was measuring. We suspected that same misalignment of goals among our staff employees.
To repair the disconnect, we created a clear method for communicating goals across the organization. We have about 46,000 employees and 350 physician and ambulatory groups that came together as a result of a merger about a decade ago. To communicate goals across such a large organization, we report monthly results of our three measures—quality, patient satisfaction, and financial performance—on a scorecard on our intranet and on bulletin boards throughout our facilities. We compare how we are performing internally, and we also benchmark our performance against national numbers.
Finally, we developed a short-term incentive program for our leadership. The reward had to be significant enough, and it had to be a component of pay rather than an addition to annual salary. There is nothing subjective about the measurement tool. You either hit your target or you don’t. That is powerful.
Can you share more details about North Shore-LIJ’s leadership incentive program?
Cabral: North Shore-LIJ implemented a short-term incentive program for top-level executives because we wanted them to work alongside our frontline staff on our top goals: quality, patient satisfaction, and financial performance (see the exhibit below). The executives have the same targets as our housekeepers, nurses, and laundry workers. Some of the specific metrics we’re tracking include the likelihood that patients will recommend our health system, performance on Medicare quality indicators, and reducing length of stay.
To strengthen the power of the executive short-term incentive program, we designed it as a component of pay. That gets everyone’s attention. The target incentive is 20 percent of base salary. We pay some portion of that percentage depending on how well the health system meets its goals at threshold, target, or stretch levels for each of the components. Then the payout is calculated depending on the percentile by which the goal is met.
A few executives questioned how they could be measured on patient satisfaction when they don’t interact with patients every day. We offered specific examples to make the correlation. For example, a chief legal officer contributes to the patient satisfaction target by identifying potential hotspots that could result in patient lawsuits.
To encourage collaboration between executives in different facilities within our system, 40 percent of the bonus is reliant on how the entire health system performs, and 60 percent is based on how well the executive’s business unit performs.
We expect our leaders to seek guidance from other higher-performing facilities to find solutions to their units’ weaknesses. For example, if one hospital is in the 90th percentile in patient satisfaction scores, and another is in the 30th percentile, the executive from the lower performing facility must reach out to the executive who drives higher scores. If not, that lack of initiative will impact the incentive pay.
At the request of our executives at each facility, we developed a targeted incentive plan for their subordinate leaders equal to 10 percent of their base pay. The incentive is a component of their salary, and this next level of leaders is measured on the same components (patient satisfaction, quality, and financial performance) as the executives, creating alignment.
To ensure subordinate leaders are focused on the results of their individual facilities, 70 percent of their incentive is based on the business results of their particular unit, while 30 percent is based on the performance of the entire health system.
Does NMHS also have a financial incentive plan?
Brown: We are the only health system in Mississippi to have a team incentive plan for all full- and part-time employees, including our senior leaders (see the exhibit below). That broad coverage of all employees is a major factor in our organization’s success.
Each facility is measured on patient satisfaction and cost-per-unit of service. Employees can earn an annual bonus from 0 percent to 5 percent of their annual salaries depending on the level they achieve on each goal.
For the patient satisfaction goal, the payout ranges from 1.5 percent at the 75th percentile, 2 percent at the 80th percentile, and 2.5 percent at the 90th percentile. The cost-per-unit of service payout ranges from 1.5 percent at 3 percent over target cost, 2 percent at target cost, and 2.5 percent at 5 percent under target cost.
That’s a potential 5 percent bonus for teams meeting the highest levels of patient satisfaction with efficient operations. Employees receive monthly feedback on their progress. Quality of care is also considered. It is measured based on patient satisfaction survey results.
In addition to providing financial rewards to employees, the team incentive plan is a great way to communicate organizational goals. I look at it as a communication strategy as much as a compensation strategy.
Have you documented any improvements or successes related to the goals associated with your reward programs?
Brown: In 2005, we improved our alignment by measuring our incentive performance targets against our critical success factors: people, service, quality, finance, and growth. Since that time, our patient satisfaction score increased 10 percentage points, and our healthcare quality scores increased 8 percentage points.
We also maintain an AA bond rating, demonstrating our strong financial performance. The icing on the cake was when NMHS won the Malcolm Baldrige National Quality Award, once in 2006 for our 650-bed flagship medical center and again in 2012 for the entire health system.
Cabral: Inpatient satisfaction rose by 3.3 percent between 2006 and 2010, and satisfaction among patients who visit our emergency departments rose 8.3 percent in that same time period.
We also saw positive results on the Medicare measures: AMI [heart attack], HF [heart failure], PNE [pneumonia], and SCIP [surgical care improvement project]. Between 2006 and 2008, AMI improved by 11.6 percent, HF by 9.3 percent, PNE by 3.2 percent, and SCIP by 8.2 percent.
In addition, our ICU central-line associated infections fell by 70 percent, ICU ventilator-associated occurrences of pneumonia fell by 50 percent, surgical site infections fell by 24 percent, and MRSA infections fell by 23 percent. Length of stay fell from 5.26 days in 2007 to 4.85 days in 2010.
Are there any nonfinancial rewards that you tie to organizational goals?
Brown: Our Ideas for Excellence program rewards employees for submitting ideas that would improve one or more of our critical factors or is a Lean or innovative idea. In 2012, we received more than 12,000 ideas, and we implemented one-third of them. For example, at one facility, an administrative employee noticed that daily reports printed on costly four-part computer paper weren’t being used. Her recommendation to stop printing the reports was approved, and the facility saved $12,000 per year on paper costs.
Another nonfinancial incentive program initiative, Stars Online, invites employees to nominate co-workers for acts of kindness or exemplary service. Last year, 5,350 employees were recognized as Stars.
Points earned for ideas accepted by Ideas for Excellence and for being recognized through Stars Online can be used to purchase items from an online gift catalog.
Cabral: Before any organization implements a nonfinancial incentive program, it should ensure that employees are receiving competitive compensation and benefits. Employees who are paid well aren’t distracted by salary issues, and they can focus on the goals set forth in your nonfinancial reward programs.
Our nonfinancial rewards include recognizing employees for exemplary performance and length of service with a personal letter of appreciation and a choice of gifts from a catalog. The value of the gifts increases based on employees’ tenure with the health system.
In addition, our Annual President’s Award Program recognizes team members across the system for extraordinary performance in three areas: exceptional patient experience, innovation, and teamwork. The award presentation is one of the most widely anticipated employee events at North Shore-LIJ.
What challenges or lessons learned can you share? How did you overcome those obstacles?
Brown: Employees need to realize that the incentives are not awarded automatically each year: They must be earned. Our emphasis on identifying behaviors that drive results is helping employees become self-motivated to achieve organizational goals.
Also, we realized that you have to consider everyone who contributes to your organization when you develop an incentive program. For example, our non-employed physicians weren’t participating in our Ideas for Excellence program and Stars Online because they didn’t have access to the electronic nomination form. Once we expanded access, participation from those groups increased.
Cabral: When we implemented the short-term incentive program to drive patient satisfaction scores, we saw scores improve within the first six months. However, once we took our eye off the ball, and we stopped the incentive program, the numbers went right back to where they were. Why? We didn’t design the program to sustain the change and the momentum. That is why many incentive programs fail. My advice is to develop incentive and reward programs with a long-term strategy.
Harnessing the Giving Incentive
Trends in Healthcare Executive Performance Incentives
Priority Advantage: Helping Organizations Optimize Their Medicare Advantage Plans
ROi: Delivering a Complete Provider Driven Supply Chain and GPO Strategy
TriMedx: Unlocking the Full Potential of an Organization's Clinical Assets
Grant Thornton: Providing Robust Due Diligence to Facilitate Successful Health System Mergers and Acquisitions
Xtend Healthcare: Helping Organizations Optimize Their Revenue Cycle
In this business profile, Mike Morris, president of Xtend Healthcare, discusses the value of partnering with a revenue cycle management vendor that has deep experience in delivering strong ROI.
AvaSure: Using Video Monitoring to Improve Patient Safety and Achieve Cost Efficiencies
6 Patient Revenue Cycle Metrics You Should Be Tracking (and How to Improve Your Results)
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
10 Ways to Reduce Patient Statement Volume (and Reduce Costs)
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
Reduce Patient Balances Sent to Collection Agencies: Approaching New Problems with New Approaches
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
The Future of Online Patient Billing Portals
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
Payment Portals Can Improve Self-Pay Collections and Support Meaningful Use
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
Large Health System Drives 10% UP (Patient Payments) and 10% DOWN (Billing-related Costs)
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
ICD-10: Managing Performance
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
Clarity Drives Collections
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Orlando Health Gains Insight into Denials, Reduces A/R Days with RelayAnalytics Acuity
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
Revenue Cycle Payment Clarity
To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Streamlining the Patient Billing Process
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Wallace Thomson Hospital Automates to Maximize Limited Resources
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
7 Steps for Building and Funding Sustainability Projects
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Key Capital Considerations for Mergers and Acquisitions
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
Key Capital Considerations for Mergers and Acquisitions
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Trend Watch: Providers adapt as value-based care moves from hype to reality
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center case study
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
Reforming with a New 50-Bed Acute Care Facility
Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.
5-Minute Briefing on Revenue Integrity Through HIM WhitePaper Hospitals FS
As the critical link between patient care and reimbursement, health information enables more complete and accurate revenue capture. This 5-Minute White Paper Briefing shares how to achieve cost-effective revenue integrity by your optimizing HIM systems.
5-Minute Briefing on Accelerating Cash Flow Through HIM WhitePaper Hospitals FS
Speedier cash flow starts with better CDI and coding. This 5-Minute White Paper Briefing explains how providers can improve vital measures of technical and business performance to accelerate cash flow.
5-Minute Briefing on Reducing the Cost of RCM WhitePaper Hospitals FS
Qualified coders are getting harder to come by, and even the most seasoned professional can struggle with the complexity of ICD-10. This 5-Minute White Paper Briefing explains how partnerships can help improve coding and other key RCM operations potentially at a cost savings.
Providers Focus Too Much On Revenue Cycle Management
The point of managing your revenue cycle isn’t just to improve revenue and cash flow. It’s to do those things effectively by consistently following best practices— while spending as little time, money, and energy on them as possible.
Lucille Packard Children’s Hospital Stanford Case Study
How Lucile Packard Children’s Hospital Stanford increased payments received within 45 days by 20% and reduced paper submission claims by 70% by using ZirMed solutions.
Using Predictive Modeling To Detect Meaningful Correlations Across Claims Denials Data
The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
ZOLL and Emergency Mobile Health Care Case Study
Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.
Maximizing Medicare Reimbursements White Paper
Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.
Denials Deconstructed: Getting Your Claims Paid
Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
Automation and Operational Improvement Drive Sustainable Results
Physician practices must improve organizational efficiency to compete in this era of reduced reimbursement and escalating administrative costs.
Revenue Cycle Management Resolves Migration Implementation Issues
Many healthcare organizations are pursuing next-generation health information systems solutions. Learn more about Navigant's work with University of Michigan Health System.
Partnering For Success – Provider Achieves Strength in Stability
The proper implementation of healthcare information technology systems is crucial to an organization’s financial health.
Building a Clinically-Integrated Network
As value-based payment models evolve, providers are challenged to maintain superior clinical outcomes while controlling costs.
Winning in the Post-Acute Marketplace
Read more about factors contributing to the changes in the post-acute marketplace and what it means for manufacturers, physicians, clinicians, patients, and post-acute facilities as they anticipate the transition to the second curve.
Building A Common Vision with Employed Physicians
HSG helped the physicians and executives of St. Claire Regional in Morehead, Kentucky, define their shared vision for how the group would evolve over the next decade. As well as, develop the strategic and operational priorities which refocused and accelerated the group’s evolution.
Practice Performance Improvement
The client was a nine-hospital health system with 14 clinics serving communities in a multi-state market with very limited access to care, poor economic conditions, high unemployment, and a heavy Medicare/Medicaid/uninsured payer mix. In most of these communities, the system was the sole source of care.
Though the clinics were of substantial size (they employed 98 physicians) and comprised of multiple specialists, the physicians functioned as individuals and the practices lacked any real group culture.
Clinical Integration Without Spending a Fortune
Clinical integration can be expensive, but it doesn’t have to be, as this four-step road map for developing a CIN proves. Does it have to cost millions to initiate a clinical integration strategy?
Contrary to popular belief, we have clients who have generated substantial shared savings and a significant ROI over time, without massive investments. Yes, some financial capital is required for resources the CIN providers can’t bring to the table themselves. But the size of that investment can be miniscule relative to the value it produces: improved outcomes and documentation for payers.
Adding Value to Physician Compensation
Today’s concerns about physician compensation are the result of the changing healthcare environment. The transition to value is slow, but finally becoming a reality. Proactive hospitals want to ensure that provider incentives are properly aligned with ever-increasing value-based demands.
This report focuses on the three big questions HSG receives about adding value to physician compensation; Why are organizations redesigning their provider compensation plans? What elements and parameters must be part of successful compensation plans? How are organizations implementing compensation changes?
Effective Revenue Cycle Management in Your Network
Revenue Cycle Management has become an even more complex issue with declining reimbursements, implementation of Electronic Health Records, evolving local carrier determinations (LCD), and payer credentialing [The emphasis on healthcare fraud, abuse and compliance has increased the importance of accuracy of data reporting and claims filing).
The efficiency of a medical practice’s billing operations has critical impact on the financial performance. In many cases, patient billings are the primary revenue source that pays staff salaries, provider compensation and overhead operating cost. Inefficiencies or inaccurate billing will contribute to operating losses.
Succeeding in Value-Based Care
This publication identifies and outlines the necessary characteristics of a fully-functioning clinically integrated network (CIN). What it doesn’t do is detail how hospitals and providers can participate in the value-based care environment during the development process.
One common misconception is that the CIN can’t do anything significant until it has obtained the FTC’s “clinically integrated” stamp of approval. While the network must satisfy the FTC’s definition of clinical integration before single signature contracting for FFS rates and contracts can legally start, hospitals and providers can enjoy three key benefits during the development process.
Therapy: Benefits at All Levels of Care
Nearly half of all Medicare beneficiaries treated in the hospital will need post-acute care services after discharge. For these patients, a stay in an inpatient rehabilitation facility, skilled nursing facility or other post-acute care setting comes between hospital and home.
Does Your Budgeting Process Lack Accountability?
With the proper process, tools, and feedback mechanisms in place, budgeting can be a valuable exercise for organizations while helping hold organizational leaders accountable. Having a proper monthly variance review process is one of the most critical factors in creating a more efficient and accurate budget. Monthly variance reporting puts parameters around what is to be expected during the upcoming budget entry process.
Cost Accounting: the Key to Cost Management and Profitability
Managing the cost of patient care is the top strategic priority of most hospital CFOs today. As healthcare shifts to more data-driven decision making, having clear visibility into key volume, cost and profitability measures across clinical service lines is becoming increasingly important for both long-range and tactical planning activities. In turn, the cost accounting function in healthcare provider organizations is becoming an increasingly important and strategic function. This whitepaper includes five strategies for efficient and accurate cost accounting and service line analytics and keys to overcoming the associated challenges.