By Terri Marshall, RN, MS, CCM
June 18, 2013

A recent article from HealthLeaders Media, “To Improve Hospital Collections, Move Revenue Cycle Up Front,” discusses redesigning the revenue cycle to make it a more “front-end driven” process as a strategy for hospitals and health systems to improve collections.

This business model is a proactive approach intended to offset some of the complexity of today’s healthcare environment. The model involves developing a pre-service center to call patients prior to scheduled appointments to verify demographic and insurance information, obtain prior authorization, educate patients on their out of pocket costs, and collect payments. This practical and seemingly straightforward strategy could have a significant impact on not only the financial side of today’s healthcare industry, but also the clinical side.

A more front end-driven revenue cycle can improve patient and physician satisfaction, increase revenues, reduce labor costs, and separate the business and clinical responsibilities in the healthcare experience. Educating the patients prior to the point of service will help patients better understand their financial responsibility and reduce the surprise associated with the expense after the medical services have been rendered. Informing patients of their financial responsibility upfront reduces their fear of the unknown costs. On a larger scale, educating patients on all aspects of their care (including cost) and reducing fear can improve the overall patient and physician experience.

From the perspective of the hospital or health system, collecting copays prior to the time of service or at the time of service reduces labor costs in several departments, including collection and billing. This approach allows the clinical staff to focus on medical needs and the pre-service center to focus on business needs, thus streamlining processes and improving efficiency.

Healthcare organizations should think about piloting this model in the outpatient departments and then rolling it out into the other areas of the hospital. After the pilot is completed,  identify areas of opportunity that need to be changed from the pilot and implement these changes, and then consider expanding this model into the emergency department and the ambulatory surgery center. When the outpatient areas have been implemented and standardized, consider making it a house-wide project so that the organization capitalizes on all financial opportunity on the front end.  

The post Moving the Revenue Cycle Up Front: Proactive Financial Management appeared first on Compass Clinical Consulting.

By Cary D. Gutbezahl, MD
June 11, 2013

A recent scientific study reported in the New England Journal of Medicine compared three methods for reducing the impact of MRSA on patients. The study—in which hospitals, rather than patients, were randomized—was well designed by the CDC and HCA.  Forty-three hospitals participated in the study. A clear advantage was found for the strategy in which all patients were treated with mupirocin ointment twice daily intranasally for five days, and all patients were bathed every day with a 2% chlorhexidine cloth for their entire ICU stay. This strategy eliminated the need to culture patients, thereby reducing costs to the hospital. Also of note is that this strategy reduced bloodstream infections, regardless of pathogen.

While CDC is conservative in changing its recommendations for controlling MRSA and organizing a meeting of experts to review the available studies, this report is so sufficiently compelling that many hospitals are reviewing their procedures in light of these findings.

But there is good reason to be conservative. We have found, time and again, that the widespread use of antimicrobial agents breeds resistance and new superbugs. Thus, the possibility exists that widespread use of mupirocin and chlorhexidine might result in the emergence of resistance, both in MRSA and in other organisms. Yet, failing to take advantage of a temporary advantage in an ongoing struggle has consequences also – such as a higher rate of patient infections and their associated consequences.

What an individual hospital decides to do should be determined by a deliberative process. And indeed, this is anticipated by federal infection control regulations (in the Conditions of Participation) that require that hospitals assess their (infectious) risks and develop policies and procedures that address their risks based on local factors as well as professional standards and the extant literature.

In other words, do what makes sense for your patients given the risks. This may involve designing your own experiments or analyzing your own data. If you hospital has a low rate of MRSA colonization or infection rate, a targeted approach based on screening cultures may make sense (to avoid resistance). If you have been successful at reducing the risks of MRSA infection with a screening program, don’t abandon it until you demonstrate in your patient population that screening yields lower results than treating everyone.

The big concern is that some states have legislated requirements for controlling MRSA. Codifying practices, based on today’s science, can be a dangerous undertaking. Science yields new understanding that undermines yesterday’s concepts. Given the slowness of the legislative process, states could be requiring outdated practices, causing harm to the very people the original legislation was designed to protect. So as a hospital, do you follow the law or do you follow the science?

The post Follow the Law or Follow the Science? appeared first on Compass Clinical Consulting.

By Cary D. Gutbezahl, MD
April 27, 2013

Recently the Journal of the American Medical Association (JAMA) published a study that demonstrated that at one hospital system in Texas, revenues and contribution margins increased when a surgical complication occurred. The study, which was published in a peer-reviewed journal, was well designed, and the data supported the conclusion. My only issue with the article is that it reflects the experience of one hospital system in one area of the country. As we know from other data, there is great variation in healthcare costs and service consumption in different parts of the country. Therefore, it would be useful to verify that the findings were similar at other hospitals because one hospital system cannot be assumed to represent the norm. Medicare rates, commercial insurance rates, coding practices, charge masters, and clinical practices vary among hospitals.

But my concern is not with the research article. The real issue is the misuse of the research by media commentators who do not know enough to appreciate the limits and implications of the article. They will expand the meaning of the research to create greater concern than the research implies.

Media Distortion

For example, Sarah Kliff, a health policy writer, wrote in the Washington Post “Wonkblog” that “the study underscores how ludicrous the incentives are in the American healthcare system, generally paying doctors for each medical service they provide, even if some of that care is the result of a surgery gone wrong.” The research article did not study payment to physicians; it studied payments to hospitals.

Surgeons do not get paid more for most surgical complications, such as pneumonia or thrombotic complications. They are paid the same global fee for the patient’s care, regardless of the length of a patient’s hospitalization. Many surgical complications are treated by physicians in other specialties who are paid for their service. But why shouldn’t they get paid since they weren’t involved in the patient’s care before the complication? More importantly, how did this writer determine that every complication was preventable and attributable to the surgeon’s actions? The original article did not assume that was true. It didn’t study preventability—it only reported that at one health system, complications benefitted the hospital’s finances.

While all of us in healthcare appreciate that we can do better at reducing patient complications, the fact that improvement is necessary should not hinder us from demanding responsible public discussion. There are many who have an agenda that exceeds their knowledge of the subject matter and the limitations of their knowledge and expertise to understand the subject matter upon which they are commenting. Opinions from experts may be worth considering alongside facts, but opinions from the uninformed are misleading, especially when they present themselves as having the aura of expertise.

We lower the quality of public debate when the opinions of the ignorant are allowed to go unchallenged. Gresham’s Law states that bad money drives out good money. The same is true when debating or studying an issue— bad opinions drive out good information. We need a public discussion that accurately defines the problem and evaluates potential solutions. But we cannot contaminate the conversation with biased opinions.

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