Facing closure, agency fights for life and wins
Small provider makes big financial turnaround
Faced with falling numbers of patient visits, pressures to reduce overall costs, as well as stiff managed care competition, the University of California San Diego (UCSD) Medical Center’s home health agency found itself fighting for its life about a year ago.
The small provider, which made approximately 105,000 visits in 1995, found that in 1996 the visit number had dropped to 84,000. Projec tions went further to spell out financial disaster and at least a $500,000 loss for the next year. But an aggressive re-engineering process that included rewriting job descriptions, hiring licensed vocational nurses (LVNs), offering home health aides flexible work schedules, changing productivity measures, and eliminating positions helped turn a projected loser into a winner.
Now the agency boasts a drop in its cost per visit from $91 to $82, and reported a $1.4 million contribution to the Medical Center’s bottom line the year it was supposed to register a significant loss says agency administrator Mary Lou Connolly, RN, MSN. Not only that; preliminary results from questionnaires indicate patient satisfaction is improving. Overall scores show a slight increase from 3.75 to 3.79 (on a scale of 1-4, with 4 the highest degree of satisfaction).
Connolly also sees another positive outcome of the re-engineering process: "It did prepare us for managed care."
Speaking during the California Association on Health Services at Home (CAHSAH) conference in Sacramento, Connolly and colleague Kala Crobarger, RN, BSN, told a packed seminar what their organization did to resuscitate the dying agency.
Developing a cost-cutting plan
To right the listing ship, Connolly and Crobarger implemented the following strategy:
1. Eliminate positions with single-subject job titles.
Examples included clinical pathways coordinator, home care hospital liaison, utilization review, ICD9 coder, and quality improvement coordinator. Instead of a single job title with one responsibility, all these tasks were apportioned and added to case manager and home care supervisor positions. Twenty-one full-time positions were eliminated. Altogether, five overall care teams were formed, and when one care team coordinator resigned later in the year, she was not replaced. There are now four. The care team coordinators also have taken on the responsibilities of performance and quality improvement, and utilization review.
2. Hire eight licensed vocational nurses (LVNs).
LVNs are paid per visit and average six to eight visits a day. The agency estimates that LVNs provide about 15% of its nursing visits.
3. Develop a team productivity measure.
The agency conducted a pilot project in which a team of four nurses is assigned a productivity level of 22.5 visits a day, managing 25 to 30 patients at a time. (Individuals throughout the agency are assigned a productivity level of between 4.5 and 5.0.) Teams are better able to reach their productivity goals each month because they shift tasks among members. In other words, one team member (the case manager) can be assigned to work in the office making all the necessary phone calls to doctors and insurance companies, rather than each individual being responsible for his or her own phone calls. This model will be implemented agencywide this month.
4. Aides accept reduced benefits.
Rather than face further layoffs, the home health aides agreed to take 80% flex hours and benefits based on patient load.
5. Open an infusion care center.
The center is located in the Medical Center’s ambulatory setting so people with transfusion/ infusion needs can be brought on-site, thereby cutting home care costs. In analyzing financials, agency leaders discovered that their AIDS and oncology care services were driving up costs. With an infusion center, one nurse could care for two or three patients at a time, as opposed to the ratio of one home care nurse to one patient. And though Connolly is administrator of both the infusion center and home care, a separate cost center was developed so her administrative time and the clinical time of the nurses are expenses of the infusion center.
6. Maintain the Medicare mix.
UCSD home health kept its Medicare mix for patient visits at about 62% of total patient visits, instead of the projected 50%.
Moving everything around took almost a full year. But Connolly says things look good so far, pointing out that the financials have stabilized, staff are satisfied and productive, and there’s a positive outlook for the future. "That’s a big turnabout from last year," she says.
You can’t please everyone
Re-engineering the workplace, Connolly admits, was hard on staff morale. It also threatened the status of management. However, she points out that having worked together to improve the agency has actually resulted in a renewed pride and team cohesiveness.
In February, when everything looked pretty bleak, Connolly was approached by two staff nurses who asked if they could lead an effort, with her direction, to rework the entire agency to be more patient-focused and save some money.
She admits being skeptical. "After all, we had tried to do a whole lot of things to reduce cost, and none had been that successful." The hospital, too, had re-engineered before and had made mistakes that Connolly didn’t want repeated. One mistake was spending too much time analyzing the problem; another was having a stakeholder take a lead in directing the re-engineering. The whole re-engineering process, she points out, should not take more than a year.
Connolly listened to the nurses’ proposal and thought that a staff-driven effort might be more effective. While offering moral support, she decided that agency managers would not attend the re-engineering meetings. She wanted leadership to be supportive, not directive. "It was vital that we succeed. We were truly in danger of losing the business."
The nurses formed a work group meeting four hours a day, twice weekly, for one month. They commandeered a conference room and papered the walls with brainstorming suggestions. At any given meeting, at least 20 people filled the room.
Staff were excused from usual productivity standards. They were also paid for attending the meetings.
Both management and staff had input
Between meetings, staff and managers were encouraged to write their thoughts and comments on stickies and attach them to the chart paper. Weekly update bulletins were also issued and circulated to all staff.
Management was able to have input, but didn’t direct the process.
"This all sounds wonderful now, " Connolly says, "but I’ve been in management for a while, and I was blown away by the initial response, particularly from the other managers. There was a lot of trouble getting buy-in from the management group. The primary barrier was that the two individuals leading this didn’t know enough about home care. But I thought that was great. They’d have a more objective view of our processes."
The staff came up with the following ideas:
1. Seven overall care teams would be formed. These teams would be determined by geographic area, and each would be responsible for its own intake and scheduling, managing about 1,000 visits each month.
2. They developed a job description for a team assistant (clerical position).
3. In the consolidation of jobs into multifunctional positions, 12 FTEs would be eliminated.
4. They also produced a patient flow chart.
Connolly points out that even with the success of this project, there’s more ahead. "We’re now going into our next major re-engineering. We’re redesigning the role of case manager and the patient care teams."
This time, Connolly promises, she’s going to find the time and resources to train staff for new roles and responsibilities. One thing learned from the last effort was that staff need additional education to take on new jobs.
But other regrets? Perhaps one more.
"I think we have a better organization now, and staff are much more involved in decision making. The one thing I wish is that we started all this earlier."
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content