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It took a unique type of sleuthing, called patient and family shadowing, to uncover a problem that was delaying surgery start times and impacting patient satisfaction at the Bone and Joint Center at Magee-Womens Hospital of UPMC.
Patients scheduled for the first and second surgery of the day used to be told to arrive at the hospital by 5:15 a.m., said Anthony M. DiGioia III, MD, medical director. Then shadowers— such as caregivers, student interns, and volunteers—followed patients through the day of surgery and discovered that this seemingly harmless instruction was highly problematic. “It created a huge amount of anxiety among patients on a day that is already extremely anxiety ridden,” said DiGioia during his presentation at the Institute for Healthcare Improvement’s 2013 annual conference in December.
For one, patients were directed to enter through the main lobby only to find the door locked, which meant they had to find their way to the emergency entrance. Many patients also had trouble getting from the parking lot to the unit. These were joint replacement patients, after all. Many of them struggle to walk that distance.
Thanks to information conveyed through shadowing, the Bone and Joint Center was able to change the hours that the main entrance was open to accommodate early morning surgical patients. Also, the hospital now provides scooters in the main lobby for patients who have difficulty walking to the day-of-surgery unit on the third floor. In addition to being a major patient and family pleaser, these changes have significantly reduced delays in first surgery start times.
DiGioia believes shadowing is a driving force behind the success of his organization’s process improvement efforts, which have positioned the Bone and Joint Center as a leader in clinical outcomes as well as patient satisfaction. See the sidebar: A Patient-Centered Process Improvement Approach
The Center is now positioning itself to take advantage of value-based contracting options, such as bundled payment and reference-based pricing, by using shadowing along with an activity-based costing method to identify and reduce the costs of care. “The weakest link in delivering value is knowing the true costs for the whole care experience,” said DiGioia.
The Bone and Joint Center uses shadowing to develop care pathways (what the Center calls care experience flow maps), of the patient experience. “When you ask caregivers to determine the current workflow, they never get it right—they don’t know where the patient and family go before and after they see each care giver (i.e., the full cycle of care),” said DiGioia. “Shadowing the patient/family can very quickly and accurately determine your current state.”
As detailed in a free online guide, shadowing involves six steps:
“Shadowing generates a sense of urgency unlike any other tool we’ve seen. You present the shadowing experience to your care team and they want to change, they want to improve, because it’s providing the opportunity for everyone to see the experience from the patient’s point of view and giving the care team the tools to provide ideal care experiences.”
Last fall, the Bone and Joint Center coupled shadowing with an activity-based costing method called Time-Driven Activity Based Costing (TDABC) to determine the true cost of a total hip and total knee replacement surgery. As detailed by Harvard professors Robert S. Kaplan and Michael E. Porter in a 2011 Harvard Business Review article, TDABC requires healthcare providers to:
With its history of using flow maps in process improvement, the Bone and Joint Center already had a lot of the TDABC structure in place. It just needed to factor in costs. To do that, the Center first defined the joint replacement care cycle as beginning 30 days before surgery and ending 90 days after surgery. Then Center staff re-shadowed the care pathway in segments—for a total of three patients per segment undergoing total hip and total knee replacements—taking note of all the resources used in each step through the full cycle of care.
“This allowed us to identify the true costs of delivering care,” said DiGioia. “It allowed us to know the exact cost impact of specific steps in the clinical pathway and of resources utilized.”
Not surprisingly, the operating room accounts for the highest percentage (57 percent for total hip and 48 percent for total knee replacements) of costs across the entire care cycle (see the exhibit below). Other costly steps include the first and second inpatient post-op days.
A deeper dive into the cost data reveals how much is being spent on consumables, personnel, and space/equipment during the joint replacement experience. As shown in the exhibit below, consumables accounted for 45 percent to 54 percent of total joint replacement costs. Hands down, the costliest consumable was the implant, which makes up 20 percent to 30 percent of the cost of care, said DiGioia.
“TDABC has turned out to be a very powerful tool to couple with our clinical process improvement work,” said DiGioia. “It is a thoughtful way to handle cost reductions. Instead of having to implement a top-down, across-the-board 5 percentage budget cut, we can now pinpoint the best places to reduce costs and then measure to make sure that we do not worsen (or that we improve) clinical outcomes or patient experience when we reduce costs.”
Identifying the true costs of care is creating a common platform for value-oriented conversations between finance and clinical leaders at the Bone and Joint Center and UPMC. “In accountable care, we are absolutely going to have to work with our financial people to develop bundled and reference-based pricing,” said DiGioia. “This is a disruptive or transformational process. We are having to cross silos that have been there for many, many years.”
TDABC, shadowing, and process improvement have helped establish a common platform for these discussions to take place, he said. TDABC and process improvement provide the framework and give caregivers a single tool for capturing needed information (e.g., the resources being used) about costs, experience and outcomes.
“As care providers we sometimes rein against cutting costs, but this is an opportunity to take the lead in changing the way we think about value and to work more closely with finance and administration in ways we haven’t before.”
Maggie Van Dyke is HFMA’s managing editor of Leadership, newsletters, and Forums.
Quoted in this article: Anthony M. DiGioia III, MD, medical director, Bone and Joint Center at Magee-Womens Hospital of UPMC, Pittsburgh. Follow DiGioia on Twitter at @PFCC_.
This article is based on material that DiGioia presented at the Institute for Healthcare Improvements’ 25th Annual National Forum on Quality Improvement in Health Care.
Trained as an engineer as well as an orthopedic surgeon, Anthony M. DiGioia III, MD, admired process improvement approaches like Lean management and Six Sigma. But when he set out to optimize patient outcomes for the Bone and Joint Center at Magee-Womens Hospital of UPMC, he opted to create a patient-centered methodology specifically for health care, called the Patient and Family Centered Care (PFCC) Methodology and Practice.
The six-step PFCC process requires staff to envision an ideal patient experience and then determine how to deliver that experience:
For example, one of the Center’s first improvement projects involved envisioning and then creating a one-stop preoperative visit for all joint replacement patients. During the two-hour visit, patients complete all their clinical testing and screenings, meet the Center staff, receive patient and family education, and tour the hospital unit.
Today, the program’s clinical outcomes, readmission rates, and patient satisfaction scores outperform national averages. Meanwhile, 99.8 percent of patients in 2012 said they would recommend The Bone and Joint Center to family and friends.
PFCC has spread organically to many clinical conditions across the 20-hospital UPMC Health System, which is based in Pittsburgh, as well as nationally and even internationally through collaborations with the Institute for Healthcare Improvement, the PFCC VisionQuest Conference Series, and various speaking engagements.
Change Healthcare: Accelerating Revenue Cycle Transformation
Jason Williams, vice president for strategy and business analytics, Change Healthcare, discusses the importance of technology and technology-enabled services in reinventing the revenue cycle.
Ensemble Health Partners: Driving Revenue Cycle Innovation
Judson Ivy, president of Ensemble Health Partners, discusses the value of revenue cycle outsourcing and the importance of selecting the right partner.
Grant Thornton: Facilitating EAM
Priority Advantage: Helping Organizations Optimize Their Medicare Advantage Plans
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.