How Can You Improve Patient Flow Through Your PACU?

This article was written by Jim Cagliostro.

“Individual commitment to a group effort is what makes a team work, a company work, a society work, a civilization work.”  Vince Lombardi

Teamwork is essential to the smooth running of everyday operations at your hospital and critical to improving patient flow through your PACU.

The post-operative care system in any healthcare facility is complex and costly, encompassing multiple departments and their respective staff to function properly. Its efficient and safe operation requires collaboration and coordination to ensure patient care. If staff members fail to perform their duties, or if just one department does not maintain its processes effectively, the entire system suffers.

If just one department in a healthcare facility does not maintain its processes effectively, the entire system suffers’. Click To Tweet

System inefficiencies can also lead to poor patient flow and a logjam of patients in the Post-Anesthesia Care Unit (PACU). 

The cost of providing extended care to post-operative patients in the PACU is much higher than the cost of care on the admitting unit, or transferring the patient to same-day surgery in preparation for discharge. This is for a number of reasons, including: 

  • The labor cost for PACU staff (critically-certified RNs, anesthesiologists, CRNAs, etc.) is significantly higher than non-PACU staff.
  • The nurse to patient ratio is often 1:1 or 1:2. Furthermore, when care is extended at the end of the day, the need for staff to work overtime increases hospital costs.
  • A 2015 study found that a short stay hospital admission was actually less expensive and preferred over PACU care when PACU stays were expected to last longer than 2.5 to 3.5 hours.

Obviously, there are times when holding a patient in PACU is necessary due to their condition and in some circumstances can be life-saving. The issue for many hospitals is that patient flow is often impeded for unnecessary and avoidable reasons.

In addition to increased cost, patient safety, quality care and patient and staff satisfaction can be compromised when patients are held longer than necessary and the PACU becomes crowded.

Clinical Causes for Prolonged PACU Stay

In general, patients recovering from surgery are assessed using the Aldrete Score (or a similar tool), which measures their respirations, oxygen saturation, level of consciousness, circulation, and activity to determine if they are ready to be discharged from the PACU. Oftentimes, a patient’s condition will dictate that they remain longer.

Clinical factors that can contribute to a longer PACU stay include:

  • Morbid obesity.
  • Hypertension.
  • Age.
  • Obstructive Sleep Apnea (OSA).
  • Type of surgery.
  • Length of surgery.
  • Type of anesthesia.
  • Post-operative Nausea & Vomiting (PONV).
  • Uncontrolled or Poorly-Controlled Pain.

While a patient’s comorbidities cannot necessarily be corrected on the day of surgery, they must be considered before, during, and after the procedure so the patient can be monitored appropriately. 

For instance:

Appropriate fluid management, along with the perioperative administration of medications like ondansetron or metoclopramide can decrease the incidence of PONV.

Reminding patients to take their daily hypertension medications on the day of surgery will help them maintain a safe blood pressure during their recovery. 

Pain management can also be approached in a variety of ways to improve recovery time.  One study in the Clinical Journal of Pain determined that the use of intravenous acetaminophen “decreased length of stay (LOS) in an adolescent surgery population likely through decreased opioid consumption.”

Additional care must also be taken around anesthesia.

Anyone who has worked in a PACU setting can tell you that providers of anesthesia give varying degrees of sedation. Some are more ‘heavy-handed’ or ‘generous’ with their anesthesia than others. Furthermore, two patients may respond very differently to the exact same amount of anesthesia. 

Appropriate, individual patient assessment by an anesthesiologist must be prioritized to ensure a speedy and safe recovery in the PACU. Ultimately, each patient must be assessed to determine their needs before, during and after surgery to achieve that. These are just a few suggestions in a process that must constantly be evaluated to determine the clinical factors delaying patient discharge from PACU and how they can be addressed.

Non-Clinical Causes for Prolonged PACU Stay

Non-clinical reasons for delay can often far outweigh the clinical. A 2015 study found that:

  • Of 12,662 PACU admissions, 449 PACU discharges were considered delayed.
  • 98% of these delays, were caused by “avoidable non-clinical reasons.” 

Non-clinical causes include:

  • Insufficient staffing on the receiving floor.
  • Receiving RN is too busy or admitting other patients.
  • Lack of staff to help transport patients.
  • No clean beds available.
  • Room not clean.
  • Waiting for equipment.
  • Waiting for tests to be completed (Portable CXR, lab results).
  • Waiting for physician orders.
  • Waiting for approval/sign-out from anesthesia.

Collaboration and communication can become more complex in addressing these issues as they often involve departments with responsibilities throughout the hospital. 

Furthermore, a patient who may be recovering well from surgery requires a number of criteria to be met, including:

  • A clean bed to arrive in.
  • Orders for the receiving floor from the physician.
  • Staff members to help with transportation.
  • Approval from anesthesia.
  • Any essential equipment or diagnostic tests to be completed. 

This process potentially involves the following departments:

  • Bed Management.
  • Environmental Services/Housekeeping.
  • Transport.
  • Nurses’ Aides.
  • Surgical Team/Residents.
  • Information Technology (if orders and charting are done electronically).
  • Anesthesia.
  • Radiology.
  • Central Supply Department.
  • Laboratory.
  • Registered Nurses (to give and receive report).

If a delay occurs in just one of these departments, a patient’s PACU stay may be extended, leading to increased costs for your hospital and a logjam in the PACU. Considering how many individuals are involved in this process, it is understandable why most delays are attributed to non-clinical reasons.

Determine What Slows the Flow of Patients Through Your PACU

Solutions to improving patient flow and reducing discharge times may often be complex due to the equally complex nature of the postoperative care system. 

An article in the Journal of PeriAnesthesia Nursing states that “understanding and addressing the causes of delayed discharge in PACU may help to improve patient flow and reduce discharge times. Future research should include the cost associated with these delays and assess the effectiveness of interventions introduced to eliminate such delays.”

The first step to improving patient flow is understanding the causes of delayed PACU discharge. Click To Tweet

The first step to improving patient flow is understanding the causes of delayed PACU discharge. As we have seen, these may include both clinical and non-clinical factors involving multiple departments. A multidisciplinary approach to resolving these issues is therefore essential.

A comprehensive study carried out by the Keck Medical Centre of USC concluded that “using an interprofessional approach to examining PACU length of stay and delays in transfers was successful in reducing PACU length of stay.”

Some hospitals have also adopted the Toyota Production System founder Taiichi Ohno’s following seven areas of waste to assess disruption in patient flow:

  • Delay, waiting, or time spent in a queue with no value being added.
  • Producing more than you need.
  • Over-processing or undertaking non-value added activity.
  • Transportation.
  • Unnecessary movement or motion.
  • Inventory.
  • Defects in the product.

According to the Virginia Mason Institute, “The key to understanding the benefits of heijunka (production leveling or smoothing) is a willingness to see the actual processes and identify all the reasons why they are not flowing continuously.” 

This can be a time-consuming and arduous process but it must include a collaborative effort by those who are directly involved with your hospital’s post-operative care system.

The Patient Journey Mapping® Service offered by VIE Healthcare® is one method that helps hospitals identify problems and “serve as a starting point for an improvement project, specific for your own place of work.”

Taking Action to Improve Patient Flow Through Your PACU

Once the causes are identified, a collaborative, inter-departmental approach is essential to devise potential solutions, covering the following: 

  • Clarify obstacles to implementing proposed changes and establish a well-defined plan and timeframe. 
  • Carry out careful monitoring and evaluation to determine the effectiveness of all changes made. 

The latest research and evidence-based practice must be used during this process.

Gathering data and implementing solutions is often a lengthy process but results in long-term benefits for your hospital.

Despite the inevitable frustrations and challenges that may arise, successful collaboration between departments is possible. Henrik Kehlet’s Enhanced Recovery Protocol is one such example. Developed in the 1990s, the program is based on key principles which require cooperation across multiple departments. These include:

Preoperative counseling, preoperative nutrition, avoidance of perioperative fasting and carbohydrate loading up to two hours preoperatively, standardized anesthetic and analgesic regimens (epidural and non-opioid analgesia) and early mobilization.” 

Similarly, improving patient flow in the PACU can be achieved when staff from every department commit to working together to identify the underlying reasons for delays and agree on appropriate solutions to resolve them.

There is no ‘one size fits all’ or quick fix to improve flow in the PACU. Change is difficult and time-consuming, but your hospital cannot afford inefficient processes in today’s healthcare landscape. The process will take time and require the gathering of accurate data from people on the front lines. It may also involve asking hard questions and challenging the status quo.

But one thing is certain: “individual commitment to a group effort” is critical to improve patient flow through your PACU. 

The Patient Journey Mapping® service from VIE Healthcare® identifies problems that serve as a starting point for an improvement project specific to your healthcare organization or hospital. VIE Healthcare® works collaboratively with you to create solutions and nurture a culture of ownership, responsibility, and accountability within your organization.

Schedule your free consultation today 1-888-484-3332 Ext 500 | info@viehealthcare.com

The Value of GPOs: Truth Or Myth?

This article was written by Lisa Miller.

The value of GPOs – is it a truth or a myth?

After labor expenses, supply costs are the second highest level of expenditure facing hospitals – and they have been rising relentlessly over the last decade. On average, they comprise 15% of a hospital’s total overall costs but that figure can reach 30-40% in surgery intensive hospitals. By 2020, it is now predicted that supply chain costs will overtake labor expenses as the number one cost in healthcare. Hospital survival will increasingly depend on effective supply chain management.

Negotiating cost-effective supply agreements has historically been a challenge for many healthcare organizations. Most are not robust enough to purchase sufficient volume to secure discounts from vendors and manufacturers in isolation. Ultimately, they pay excessive prices for supplies that are essential to their very existence.

Enter the GPOs.

GPOs (Group Purchasing Organizations) play a major role in the supply chain of the US healthcare industry – and the level of their non-labor costs. Click To Tweet

According to the Healthcare Supply Chain Association (HSCA), GPOs exist to help ‘… healthcare providers….to realize savings and efficiencies.’ This is achieved by using their leverage to negotiate discounts with manufacturers and other vendors. Today, there are 633 GPOs in the US and Canada and over 12,000 members within those GPOs.

Dissenting voices, my own among them, have contributed to the debate over whether this system of purchasing does in fact save hospitals money or is ultimately contributing to rising healthcare costs. Three key arguments in favor of GPOs are that they reduce costs, increase competition and drive transparency. But in almost two decades as the founder of VIE Healthcare®, I see growing evidence to challenge those claims.

Here’s why.

GPOs: A Cause For Concern?

In October 2014 the GAO delivered a report to Congress on GPOs, entitled The Funding Structure Has Potential Implications for Medicare Costs. This report provided a starting point for the US government to examine GPOs more closely and evaluate the potentially negative impact they have on healthcare costs. But in the last four years, the situation doesn’t appear to have changed.

From my observations, GPOs are often shrouded in secrecy, yet a glimpse into their world reveals major hidden issues. I’ve explored some of my concerns – and those of others – below:

Monopolization by GPOs Prevents Competition

An article in the Wall Street Journal in May 2018 Where Does the Law Against Kickbacks Not Apply? Your Hospital highlighted the conflict of interest and secrecy surrounding GPOs. In a market dominated by four giant GPOs, it emphasizes just how difficult it is for other new and often more innovative companies to break through.

Notably, Amazon Business, which originally intended to expand its client base to include larger hospitals and health systems, withdrew from the healthcare supply market in April, in part due to the barriers imposed by the relationships between hospitals and GPOs.

Furthermore, GPOs use just three major distributors which in turn pay fees to GPOs and are entitled to manufacturers’ rebates on contract products. As smaller suppliers cannot access these rebates they are effectively excluded from the entire market. The article suggests that higher costs and supply breakdowns are the ‘inevitable’ consequences of these arrangements, an argument which I agree with.

GPOs: The Cause of Drug Shortages?

Back in 2015, GPO kickbacks and anti-competitive practices were identified as the cause behind generic drug shortages, as it was noted they were in control of over $300 billion in drugs and supplies for around 5,000 hospitals. That situation has not improved. In many cases, hospitals continue to experience a shortage of saline. Other drug supplies affected by the purchasing power of GPOs include anesthetics, painkillers and IV fluids for oral rehydration.

The Power and Influence of GPOs

GPOs weren’t originally intended to operate in this way. The first healthcare GPO was established in New York in 1910 when hospitals collaborated in an attempt to reduce the cost of laundry services. Many decades later, in the 1980s, GPOs were given a ‘safe harbor’ by Congress, which allowed them to take kickbacks from suppliers.

Today, GPOs wield what appears to be immense financial and political power. Writing in the Summer 2018 edition of the Journal of the Association of American Physicians and Surgeons, Marilyn M. Singleton, MD, JD observes that GPOs don’t always choose the products that are best for their customers or patients and calls for their ‘safe harbor’ status to be reconsidered. This is unlikely to be achieved due to the extent of lobbying in Congress. Premier Inc alone spent a total of $1.79m on lobbying in 2017. This lack of transparency and federal oversight allows the practice of kickbacks to continue unmonitored, leading to higher spending for Medicare and fueling the spiraling cost of healthcare.

A further concern arises from the fact that Medicare may be paying rates based on inaccurate data. The annual update of Medicare payment rates to hospitals relies, in part, on information that hospitals report to the Centers for Medicare and Medicaid Services (CMS), an agency in the Department of Health and Human Services (HHS). According to the most recent records, the last review of this report was carried out in 2005.

Although all hospitals are required to report GPO kickbacks to the CMS, there is no data verifying that this information was, in fact, provided to the department on a regular basis since 2005. The most current report may therefore be inaccurate.

Medicare payment rates may be affected over time based on inaccurate data in the annual update to hospital payment rates, which relies, in part, on information that hospitals report to the Centers for Medicare & Medicaid Services (CMS)—an agency in the Department of Health and Human Services (HHS). Hospitals are required to report all GPO kickbacks to the CMS as reduction activity, but an accurate report of GPO kickbacks is difficult to determine if the last review of this report was done in 2005. Medicare might be paying rates based on inaccurate data.

Is There An Alternative to GPOs?

Ideally, a healthcare system should focus on the needs of the patient and broader society over corporate gain. The current system appears to be failing to achieve that aim. Click To Tweet

While GPOs negotiate contracts with manufacturers, vendors, and distributors, hospitals typically maintain the ability to make purchases outside of the GPO contracts but negotiating in isolation is difficult, as prices are likely to rise. For hospitals considering working with GPOs, resources and guidance on negotiating concessions before entering into an agreement are also available.

Singleton also suggests that the mood is changing and offers evidence of a shift in the market:

  • Healthcare organizations are moving towards bypassing GPOs to gain the best value medical technology contracts.
  • A growing number of systems are ‘owning and controlling their own supply chain destinies.’

Amazon also remains serious about disrupting healthcare supply chains. In July 2018, its acquisition of pharma startup PillPack was announced, sending shockwaves through the market – but it is in its very early days.

At VIE Healthcare® we work with healthcare organizations to identify areas for cost savings in non-labor spend with our unique Invoice ROI™ Purchased Services Technology. Since 1999, we have saved hospitals millions of dollars by utilizing data analytics to find cost-saving opportunities in every invoice line item. Our team of experts dig deeper than the average AP spend and compare market pricing and market trends to identify where the opportunities lie for our clients.

Take our hospital cost assessment to better manage your hospital’s purchased services spend.

For a complimentary consultation, call our office today at 1-888-484-3332, Ext 500 or email us at info@viehealthcare.com.

Audit Your Real Estate Lease Agreements

Are you taking the time to audit your real estate lease agreements?

They can often be interpreted as fixed or static, and many hospitals don’t immediately see any possibilities to reduce costs associated with them.

As a result, real estate leases are often an overlooked opportunity for hospitals and their savings.

It’s not always a function of price either. In fact, it’s primarily an audit function because these leases often have many moving parts.

There are significant costs in CAM charges, the charges that sit outside of the base rent or are not reflected in a credit. It’s important to keep a pulse on and get clear on utility costs, snow removal, lawn maintenance, and other fees that sit outside of the actual rent cost. CAM charges can often add 30%-40% to a hospital’s lease costs.

And, if a particular element of a real estate lease contains an error that hasn’t yet been uncovered, there’s a capacity for that error to be compounded each year if it isn’t addressed, leading to a greater increase in costs.

Hospitals also tend to put a degree of trust in their outsourced property management companies. However, in our experience, these companies are often not doing an in-depth analysis of bills. They’re simply focused on getting the bills paid, which again can lead to unclaimed opportunities in reducing costs.

Regardless of the exact structure of your current real estate lease, conduct a thorough audit to ensure you aren't leaving any cost-saving opportunities on the table! Click To Tweet

Need assistance with your real estate audits? Get in touch with VIE Healthcare®.

Hospital Mergers and Acquisitions

This article was written by Jim Cagliostro.

If you work in healthcare, chances are you have experienced or will experience some sort of merger or acquisition.

Changes with Medicare and Medicaid reimbursement and reporting, in addition to the push for increased coordination of care, has made system expansion the new norm in healthcare. Smaller, community hospitals simply cannot afford to remain independent, and joining a larger system makes it financially and practically possible to coordinate care using more sophisticated IT programs to track and share patient data. Many argue that growing health systems can lead to a lack of competition in certain areas where a health system buys up just about every local hospital. Others point to the increased efficiency and lower costs due to higher volume (e.g. savings in purchasing) as reasons a hospital may be able to provide care at lower costs to patients. They also explain that medical care can actually improve in growing health systems as a result of increased medical collaboration and through sharing of best practice standards.

In this article, we will discuss the financial benefits of hospital mergers and acquisitions in addition to warnings that should be considered as hospitals face the reality of the current healthcare landscape.

Financial Impact

The overall financial goal of mergers and acquisitions for both buyers and sellers is “to create operational, strategic, and financial value.” (https://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/hospital-mergers-and-acquisitions.html).

Rationale (for Mergers and Acquisitions):

  • Increased volume, increased productivity and improved outcomes.
  • Increased savings on necessary purchased items (“economies of scale”).
  • Decreased competition (if you can’t beat them, join them).
  • Increased ability to make capital investments.
  • Open sharing of cost-savings initiatives.

The benefits of mergers and acquisitions seem convincing, but these complex dealings between healthcare organizations are not without financial risk. One Deloitte study found that the average hospital experienced decreased operating margins for about two years following an acquisition. The hospitals that experienced a post-acquisition increase in operating margins were the ones that spent more time on planning and execution (https://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/hospital-mergers-and-acquisitions.html).

As financial and regulatory pressures increase in the arena of healthcare, so will mergers and acquisitions. Hospital administrators must consider the possibility of their organization’s participation in this ever-increasing trend, either as a buyer or a seller.

The joining of two distinct organizations presents a number of challenges that must be addressed to allow for a smoother transition. Click To Tweet

These challenges include, but are not limited to:

  • Developing a unified strategic vision.
  • Setting goals (both financial and non-financial).
  • Aligning leadership from both organizations.
  • Merging cultures and visions.

If these issues are not considered proactively and addressed accordingly, realizing profit from an acquisition or merger could take multiple years.

Patient Impact

When considering mergers and acquisitions among hospitals and health systems, decisions must not be based solely on the financial outcomes. It would be unwise and unethical for a hospital to focus on profit margins and marketability while neglecting patient care and safety. Hospitals and health systems often state that “better patient care” is the reason for a planned merger or acquisition. However, when business-minded leaders, rather than clinicians, are leading the conversation and making the final decisions, patient care and safety often take a back seat to the financial details. Much research has been done to study the financial impact of mergers and acquisitions, while very few studies have been directed at understanding how these transactions impact patient care or patient safety.

Recently, CRICO, the malpractice carrier for Harvard-affiliated hospitals, partnered with Ariadne Labs to study the various risks created by mergers and acquisitions and to develop possible solutions to mitigate those risks. Seventy clinicians and business staff were interviewed followed by the formation of large, multidisciplinary discussion groups to better understand the sources of risk to patient safety and to build reliable tools that would adequately address the sources of risk (https://www.statnews.com/2018/07/31/hospital-mergers-acquisitions-patient-safety/).

During the interviews, CRICO and Ariadne Labs personnel learned that following system expansion, poor orientation to new facilities delayed care during emergencies as physicians tried to find their way through unfamiliar hallways. They also found that medication errors had taken place in a newly acquired facility that had not been sufficiently equipped with the necessary tools to care for the recent increase in pediatric patients, whose medications are often based on weight.

System expansion often leads to increased patient volume, a change in patient demographics, and an increase in patients with specific conditions. This creates a need for hospital staff to be educated and supported while they adjust to the change in patient population. It also demands that the appropriate tools are readily available and that staff members are trained to use equipment safely and properly. When clinicians are placed in a new environment, they must be given time and adequate staffing to become familiar with the layout of their assigned unit or hospital. They must also be trained on the appropriate communication channels and how to call for extra help when needed. Processes and protocols can vary greatly between facilities, so it becomes vitally pressing for the newly expanded health system to consolidate standards of practice and reinforce these to clinicians. As health systems grow and hospitals become more specialized, the need for establishing safe and effective transport of patients between facilities must also be addressed.

Variations in practice exist even among the best health systems. This is not necessarily a bad thing. However, if two different hospitals or systems become one, reconciliation of those differences must be an intentional and thorough process. The conversations that take place and the decisions that must be made leading up to and during system expansion are complex to say the least. As a result of their study, Ariadne Labs created free tools to help facilities work through those conversations (https://www.ariadnelabs.org/safe-expansion/). They suggest using these tools during system expansion to:

  • Encourage open lines of communication.
  • Foster relationship building and teamwork.
  • Uncover potential risks.
  • Support early planning to mitigate potential harms.

“Incorporating early, clinician-led evaluation of the potential patient safety risks from system expansion is a practice every healthcare system should incorporate into its planning process.”

Is your hospital prepared?

In the world of healthcare, mergers and acquisitions will happen almost as certainly as death and taxes. Financial stability and increased profitability are valid issues that every hospital must consider. With this in mind, your healthcare organization should not enter into system expansion talks, either as a buyer or seller, carelessly and without a plan. Clinicians must be a valued part of the conversation and decision-making process from the start. Patient care and safety must not be compromised. The business of healthcare is a reality, but the long-term health of your organization should not be neglected. Make sure the important business decisions do not take precedence over necessary clinical considerations and the overall mission of your organization.

References:

https://www2.deloitte.com/us/en/pages/life-sciences-and-health-care/articles/hospital-mergers-and-acquisitions.html

https://www.beckershospitalreview.com/quality/viewpoint-why-hospital-mergers-raise-patient-safety-problems.html

https://www.statnews.com/2018/07/31/hospital-mergers-acquisitions-patient-safety/

http://www.hpae.org/issues/merge-monitor/impact-hospital-mergers/

https://www.ariadnelabs.org/safe-expansion/

5 Things to Know About Healthcare Telecommunication Costs

This article was written by Jacqueline Oberst.

Here are a few thoughts on healthcare telecommunication costs which your organization needs visibility to:

1. Just because your telecommunication costs are consistent each month does not guarantee that billing is accurate.

2. Vendors provide details about services, pricing, contract terms and locations via a customer service report. This report may have a different title depending on the vendor. When was the last time your organization analyzed this data?

3. Some states allow hospitals to access telecommunication vendor contracts within their procurement program – does your state?

4. Telecommunication contracts should be reviewed annually, even if mid-term.

Agreements can be renegotiated for newly available lower pricing or service upgrades, prior to the end of the term. Click To Tweet

5. Engaging a telecommunication expense reduction expert will provide insights into all costs and services allowing management to make better decisions about spend and realize significant cost reductions.

VIE Healthcare® is the expert in healthcare telecommunication cost reduction and management. We have spent over 20 years assisting hospitals realize average savings between 25% – 40%, savings that are sustainable!

Over the next few weeks we will provide further insight into each of these five areas.

Healthcare Decision Analytics

This article was written by Rich Dormer.

For more than a decade, I have been working successfully with senior executives and key stakeholders at hospitals and healthcare systems within the United States in identifying areas to extract unnecessary costs within their organizations and then delivering upon these opportunities. During this period, the team and I at VIE Healthcare have delivered more than $600 million in realized savings and margin enhancements.

While working with a diverse group of clients with different objectives, personalities, and cultures, I have uncovered the universal process that is common to all of those who achieve superior results. I have named that process “Healthcare Decision Analytics,” or HDA. HDA is comprised of three equally important parts: The Data Design, The Stakeholder Alliance, and The Strategic Blueprint. The goal of this article is to put clarity around this very important, and common, universal decision-making process.

Getting to, and making the optimal decision, for a healthcare organization present unique challenges, including competing stakeholder priorities, time and resource management, capital cost barriers of new technologies, local and regional community influence, and incomplete or overwhelming amounts of data to digest and make sense of. And these are just a few of the obstacles that successful decision-makers must overcome. Making the wrong decision, not making a decision, or even delaying a decision can have a lasting negative effect on an organization.

Healthcare Decision Analytics (HDA) requires accurate, intelligent and presentable data. As referenced above, this is HDA’s first critical component, which I have named The Data Design. Carly Fiorina, the former Republican Presidential Candidate and former Chief Operating Officer at Hewlett-Packard once said, “The goal is to turn data into information, and information into insights.” This quote concisely expresses the overarching goal of The Data Design process which not only turns data into insights, but is built on the collection of the “right” data.

Identifying and obtaining the “right” data can be quite the challenge, but equally daunting is how one analyzes the data and turns it into useful, actionable information. The more complex a set of data, the more complex and variant the analysis, and by extension, the more likely to lead one down dead-end analysis paths before finding the right path, if it is found at all.

Once the data has been collected and analyzed, the final and equally important step in The Data Design is how that information is presented to demonstrate the derived benefits in a clear and concise way. And though the derived conclusions and core recommendations will be the same, the presentation must be developed and geared to the target audience within the organization.

For example, one would need to develop and present the information differently to a CFO versus a spine physician versus a nurse manager versus a vendor representative. A flawed or misdirected presentation, which does recognize and respect the nature and culture of the specific target audience, could convert an otherwise solid set of recommendations into failure.

The second of three key components of HDA is The Stakeholder Alliance. Basically, The Stakeholder Alliance creates a shared vision of success through collaboration of the key team members. Typically the key team members will include stakeholders from the executive staff, involved department, and clinical or medical staffs as the case may be. Sometimes there may be a key influencer that is not an actual team member, but who has to be brought into the process in order to achieve success. The Stakeholder Alliance is a critical process of collaboration that has to be thoughtfully approached and navigated if one is to achieve success.

A Crew Team metaphor is perhaps the most effective way to explain the Stakeholder Alliance section of Healthcare Decision Analytics. If all of the crew members are rowing in unison, the vessel will move optimally. The importance of the team rowing in the same direction to make the right decision cannot be stressed enough. Good luck in getting the best in class orthopedic pricing if you don’t have the involvement and buy-in of the surgeons performing the orthopedic cases. Equally important is executive leadership support. Just like the Coxswain who guides the rowers to unified action and optimal results, the executive leader provides guidance and the authority to keep the initiative on course. Finally, just as the “shared vision” of the crew team is critical to their success, so too is shared vision a critical success factor for The Stakeholder Alliance. The spirit of a successful crew team and Stakeholder Alliance are the same; where do we want to go, how quickly do need to move, and what is the defined goal that will make this initiative a success?  If any of these pieces are missing or flawed, then the chance for success is compromised, if not lost completely.

The last section of Healthcare Decision Analytics is the Strategic Blueprint, which is the engine that drives the decision-making process to superior results. Creating a clear decision process, understanding and balancing time with the availability of resources, and following fundamental negotiating principles will help leaders avoid making a poor, non-tactical decision. Gaining clarity of the decision process and urgency amongst all parties involved is critical to accomplishing and maximizing and realizing the opportunities. One client recently had a contract addendum held up for two months in legal review. This delay cost their organization over $200,000 which could have been avoided if their senior leadership had been notified earlier of the time sensitivity and the need for an expeditious legal review.  The amount of time to accomplish a goal and the availability of resources (data, people, and experience) are directly proportional to the amount of expertise and outside thinking and help that is needed. If an organization has limited time and/or people to work on a project and/or core competency in the specific type of initiative, then one needs to seriously consider outside, third-party expertise to accomplish their goals.

The appropriate application of outside, third-party resources and expertise will always, when properly applied, increase both the bandwidth of in-house resources and the speed to goal realization. Click To Tweet

Negotiating correctly and without emotion is the final step in the Strategic Blueprint; try to avoid the using the “sharpen your pencil” strategy.

So, in conclusion, I hope I have conveyed the very important concept of Healthcare Decision Analytics (HDA) and its three essential building blocks, namely The Data Design, The Stakeholder Alliance, and The Strategic Blueprint. Furthermore, I hope that I was able to provide some insights into the successful decision-making process that I have witnessed and used while working with healthcare senior executives and their organizations. While some decisions may not directly affect an organization’s bottom line, most do have a long-lasting positive or negative effect.

The goal of Healthcare Decision Analytics is for leaders to gain the clarity and process they need to consistently make superior decisions which will then provide margin enhancement, stability and sustainability for their organizations.

Hospital Billing and Patient Experience (Part 2)

As we discussed in part one of this series, healthcare billing can often create problems and this can have a negative impact on a patient’s overall experience.

So, every hospital’s overall goal should be to make patient payment easier.

Here are some ideas to help facilitate this:

  • Give patients multiple methods of payment (“71% of consumers saying that being offered multiple ways to pay increases their satisfaction” (Fiserv, “Eighth Annual Billing Household Survey, Fiserv Inc., 2016))
  • Set up automatic payments and save credit card information for recurring bills.
  • Consolidate multiple charges for the same visit into one bill.
  • Use electronic/digital communication/billing whenever possible to speed up the process.
  • Create online, user-friendly, customizable platforms to view and pay EOBs/bills.
  • Offer multiple options to pay bills over extended periods of time.
  • Offer discounts for paying early (even at time of service) or paying with cash.
  • Educate staff on how to discuss payments with patients.
  • Allow/offer the option of patients paying prior to service or while they are still on site.
  • Know how much you are spending on debt collection and cut your losses when needed. Only $15.77 of every $100 is recovered once debt goes to collections. (https://nationallist.blog/2016/10/13/medical-debt-collection-difficulties/)

These solutions can help make bills less confusing, relieve patients’ financial burdens, and help hospitals reduce bad debt by seeing more bills paid and by seeing bills get paid sooner.

Improve your organization’s financial performance AND increase patient satisfaction by giving patients transparency and control, while simplifying the payment process. Click To Tweet

Hospital Billing and Patient Experience (Part 1)

Organizations must change the way they approach the patient financial experience.

Why?

Healthcare billing can often create problems and tarnish the overall patient experience. Click To Tweet

There are a few major reasons for this:

  • Patients are bearing the responsibility of a larger portion of their healthcare bills.
  • Patients can’t afford to pay large hospital bills, at least not all at once.
  • Healthcare billing is often confusing.

Here are a few quotes from Becker Hospital Review’s whitepaper:

  • “As more patients enroll in health plans with high out-of-pocket costs, provider organizations must shift their focus to ensure patients are at the center of their revenue cycle strategy. Hospitals and health systems that fail to make this transition may see their patient experience scores and finances suffer.”
  • “Patients are now responsible for more than a quarter of healthcare revenue and are the fastest growing payer.”
  • “An analysis of 400,000 claims by The Advisory Board confirmed that the greater a patient’s deductible, the less likely he or she is to pay the owed amount, irrespective of his or her income level.”
  • “Healthcare payments are a uniquely complex multi-party ecosystem, and the numerous bills and benefits statements patients receive after hospital visits confuse them. Patients often choose not to pay the bills because they are unsure of the amount they owe, even after comparing invoices from providers and statements from insurers over an extended period of time.”

And, here are a few more important statistics that shed some light on healthcare billing and its relation to patient experience:

  • “Research from the Deloitte Center for Health Solutions shows that hospitals with better patient experiences perform better financially and there is a positive correlation between patient experience and clinical quality measures.”
  • Research from InstaMed reveals that 72% of consumers preferred electronic payment for their healthcare bills. Yet in 2015, 87% of consumers received paper medical bills from their providers.” (Trends in Healthcare Payments Sixth Annual Report: 2015)
  • Patient satisfaction ratings can fall by an average of more than 30% after discharge because of the billing process, according to a 2015 survey by the Hospital Consumer Assessment of Healthcare Providers and Systems

The overall solution requires making patient payment easier. So, how can a hospital accomplish this?

We’ll cover some practical steps in the next edition of this series.

5 Important Steps To Optimize Reimbursement For Your High-Cost Pharmaceuticals & Laboratory Testing

What are the important steps to optimize reimbursement for your high-cost pharmaceuticals and laboratory testing?

Here are five keys:

1. Document and code. Verify that prescribing physicians have adequately documented the order in the patient chart and that the medical records department recognizes the order and uses the ICD-10 procedure code.

2. Review managed care contracts. Review your managed care contracts in depth of top payers for specific clauses pertaining to high-cost pharmaceuticals and high-cost lab testing. If these clauses exist, identify the payer’s coding requirements.

3. Audit your Chargemaster quarterly. Capture and code and all charges associated with high-cost pharmaceuticals and lab tests. Ensure that all the appropriate codes are identified and entered into the Chargemaster with the correct pricing.

4. Develop a managed care contract strategy. Negotiate special provisions in your managed care contracts for high-cost pharmaceuticals, orphan drugs and lab testing. Four types of contract-provisional clauses that apply to most high-cost drugs and lab tests include: trailer claims, carve-outs, cost outliers, and stop-loss thresholds.

5. Map your managed care reimbursements to actual payments. To ensure manage care contracted reimbursement, compare actual payments to specified agreement terms.

Many times managed care payments miss the high-cost drug payments and this is a lost revenue opportunity for hospitals. Click To Tweet

Call VIE Healthcare to schedule a call to learn how your hospital can implement best practices in high-cost drug revenue optimization at 1-888-484-3332 ext 501 or email me at lmiller@viehealthcare.com.

Tips to Improve Your Hospital Utilization Process for Lucrative Cost Savings (Part 3)

This article was written by Lisa Miller.

We’re concluding our series on improving your hospital utilization process. If you haven’t already, be sure to read part one and part two.

Take Stock of Your Pharmaceuticals

Biologics extend to pharmaceuticals, although most drugs are chemically synthesized. In either case, it’s been our experience that most drug doses are just thrown away. Although pharmaceuticals are probably the most audited of all, with outside and internal agencies constantly tracking financials, compliance and operations, line-by-line audits of utilization are not common practice.

You’ll need to spend a significant amount of time analyzing your hospital’s utilization data. Click To Tweet

Inspect Outpatient Testing Interpretation

Sometimes outpatient testing results are entered incorrectly into a medical records system, which means the wrong price was charged to the insurance company, or Medicare, and will quite possibly end in retesting of the entire procedure altogether. Also, outpatient coding guidelines contain different information than inpatient guidelines. The challenge is knowing when to use the proper codes. This is why understanding outpatient testing interpretation is key to properly analyzing your hospital’s utilization trends.

Regulate Medical Waste and Excessive Pickup Fees

Many times medical waste and excessive pickup fees are 30% of the overall costs that hospitals just pay because no one is taking the time to check every invoice line item. By reviewing every invoice line item and asking questions about ambiguous charges, you will start to find opportunities for cost savings. If excessive fees are normally 30% of overall costs, then there is already a good chance of a 30% cost savings.

Examine Telecom Services

Telecommunication services is one of the six major hospital purchased services spends, but to manage those costs you must first perform a historical analysis and purchased services contract review. This will not only reveal pricing errors and credits due back to your hospital, but it also reveals utilization trends that greatly affect your telecom costs.

Measuring your hospital’s utilization trends for cost reduction opportunities is tough, and you’ll need an army dedicated to your supply chain department to achieve it. There are so many other factors involved as well, like variations and quality, that affect your purchased services spend. You will need to outsource a lot of the work to an independent group that has the clinical expertise, among other specializations, and experience to do the job right. You’ll want to work with a company like VIE Healthcare.

VIE Healthcare’s expert analysts use comprehensive data to identify trends in your top 50 most utilized supply costs by department. Our system involves proven processes to find cost-savings opportunities. We’ve helped hospitals proactively manage their monthly outsourced purchased services spend since 1999 and now our Invoice ROI™ technology will do the exact same thing for you in real-time. Call our office today at 1-888-484-3332 ext. 500 to schedule a call with founder and CEO Lisa Miller, a healthcare margin improvement expert.