An efficient strategy for creating efficiencies
Agency uses seminars to get ready for PPS
For several years, home health care has heard about the importance of creating efficiencies. But for several years, agencies that looked at ways to cut visits and curb overutilization of services found they were punished for their efforts by declining revenues. There was no reward for efficiency in a system that still paid based on use. But now the government is done crying wolf. With the introduction of the interim payment system (IPS) and the ensuing Prospective Payment System (PPS), agencies are going to see incomes drop unless they become more efficient.
Many are scrambling to find ways to cut costs, but others, such as In-Home Health of Minnetonka, MN, are taking a deliberate approach to creating efficiencies. The agency is holding a series of seminars to talk about how, in general, costs can be lowered, and then looking at each branch specifically to see what it needs to do to accomplish specific goals.
"Each location has a unique scenario that has to be addressed," says Cathy Nielsen, RN, CPHQ, the vice president of clinical services. "We can have general sessions, but a template solution won't work for all of the branches."
The agency held three sessions at the corporate headquarters before starting on site meetings with clinical managers at each branch in early May, says Nielsen. At the seminars, there are general discussions about cost reduction, utilization management, and increasing business through new starts of care. But then there are individual break-out sessions where the specific situation of each branch is discussed, and a plan is created to meet concrete goals.
Corporate team facilitates effort
To make the break-out sessions meaningful, Nielsen says leaders from finance, operations, and clinical management take the data from each branch and trend them over time. "It can be as general as how much new business is coming in, or as specific as reports on the number of visits by discipline for high-utilization patients, like wound care or diabetes patients," she says.
The managers go over the data with the corporate teams and set specific goals. For example, says Susan Garner, RN, director of operations management, a branch may need to emphasize cost reduction, but is showing great work in new business. That branch manager would spend up to two hours going through a list of expenses to see where cuts could be made, she says.
In an urban setting, travel costs might be out of line with other branches, and that area would be targeted. In a rural setting, travel costs might not be something you could change, Garner says, so supply costs might be a better option.
In at least one case, the dramatic solution of breaking a lease was taken for a branch that was paying considerably over market value for space. "That has a huge impact," says Garner, "the costs of breaking the lease, the time it takes to move. But the value of doing it was worth it."
Along with cost reduction, other efficiencies may come from using different staffing models, seeing where utilization is too high, or finding potential areas for new business.
The efforts don't end with the branch meeting. As often as every week, corporate managers will meet with the branch personnel in follow-up sessions. During those meetings, Garner says as much emphasis is put on clinical care and maintaining quality as on the cost-reduction efforts. "We want to make sure that what we do doesn't affect the quality of care," she says.
"We have to be very attuned to the impact, both on quality and the financial impact," Nielsen adds. "We already were doing monthly financial reports. Now we are just increasing the frequency."
It is a labor-intensive effort, but one that Garner says is vital. "In the future, we will have to keep costs down and productivity up to be successful. I don't think the issues we face are quality of care - we have a handle on that. But we have to be creative and understand not only our costs, but how everything, and anything, can impact those costs."
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