Highlight benefits of your hospital-based program
August 1, 1998 9 minutes read
Highlight benefits of your hospital-based program
Past misconceptions can hurt your image
By Mike Grosh
President
Span Corporation
Ann Arbor, MI
Back in the frontier days of occupational medicine, when it was referred to as "industrial medicine" and practiced exclusively by small physician-owned entities, a common competitive foil was the hospital emergency department (ED). Marketing personnel, euphemistically known as "industrial liaison coordinators," in an effort to disguise their sales function, would compare and contrast the industrial clinic with the hospital ED in an effort to secure business relationships.
Where the industrial clinic was accessible, relatively inexpensive, proactively communicative, and sensitive to employer cost-containment agenda, the hospital ED was slow, expensive, and reluctant to provide any case information for fear of violating patient confidentiality, and entirely indifferent to employer need.
Now that the evolutionary transition from industrial medicine to occupational medicine is complete, occupational medicine is heavily populated by hospital-based or affiliated programs. Though many of these programs offer excellent occupational health services, employers and others still may think of them in terms of the characteristics associated with hospital EDs in the past. It is critical that managers of hospital-based programs recognize this misconception and take steps to counter it.
The first step is to dispense with the bath water while hanging on to the baby. Unfortunately, in many instances, the perceptions of employers often have some basis in reality.
Many hospital-based programs are buried under the broad hospital management agenda and thus struggle to deliver the core values of occupational medicine, which can be characterized as access, communication, cost containment, and disability management.
Consequently, the first mission for hospital-based occupational health program management is to ensure proper structure for the delivery of services to enable those programs to develop, maintain, and nurture direct relationships with the marketplace. Such structures can be accomplished through the creative application of hospital-owned, for-profit subsidiaries, arms-length management with outside management organizations and physician or management company joint ventures.
These are some of the characteristics that will indicate the hospital-based program is appropriately oriented toward occupational medicine goals: a freestanding facility with its own signage and parking; autonomous management with a minimum of accountability to mid-level hospital management; separate information, billing, and accounts receivable management systems; dedicated and exclusive marketing; integration of primary diagnostics and rehabilitation services within the primary occupational medicine clinic; and a true gatekeeper relationship to hospital-associated specialists and other services.
Show benefits of hospital connection
The primary goal in this first step of application is the creation of a program that can truly represent itself to the marketplace as offering all the intrinsic values of a freestanding occupational medicine program, plus a host of significant added values uniquely available through its affiliation with the hospital. More concisely, occupational medicine is made "better, faster, cheaper," by nature of its hospital affiliation.
Once the optimal configuration is achieved, the hospital-based occupational medicine program can then differentiate itself and promote its advantages to the marketplace in the areas of quality, accessibility, and cost containment.
Hospitals usually employ elaborate systems to oversee credentialing and staffing, as well as quality assurance, peer review, and compliance to the Joint Commission on Accreditation of Healthcare Organizations and other regulatory environments. These mechanisms can be readily applied to the occupational medicine program in a manner that is characteristically unavailable to the freestanding organizations.
As a result, hospital-based occupational medicine programs will be more likely to employ board-certified occupational medicine specialists, certified radiographers, licensed physical therapists, and delivery of medications under the oversight of registered pharmacists, for example. In general, this level of credentialing is at the apex in each professional discipline employed in patient care and other service delivery. This level of professional academic preparation and professional credential is not commonly seen in the freestanding configuration.
Further, because hospitals in general will serve larger markets, both in terms of geography and a broader scope of services, the occupational medicine delivery apparatus is free to focus exclusively on the agenda of occupational medicine and employee health and safety. In many cases, freestanding organizations by necessity will dilute their focus on occupational medicine with the delivery of urgent care and private practice in the same environment to support the financial needs of the practice.
In the area of quality assurance and total quality management, again, hospitals generally will possess systems for the monitoring and oversight of quality, which are readily available for application to the occupational medicine program. Aside from education, peer review for quality assurance (QA) in treatment, hospital QA will address less visible areas such as infection control, hazardous material management, continuing medical education, and facility or environmental management.
Finally, hospital-based programs generally will enjoy high visibility and an existing reputation as high-quality deliverers of health care services. This reputation is particularly key in marketing occupational medicine programs in employee-choice jurisdictions, as well as to companies that have strong union representation or other highly sensitive management/labor dynamics.
The hospital's reputation for quality helps secure labor's endorsement of the selection of the occupational medicine provider. Employers enjoy less resistance from their employees for initial referral and ongoing management in the occupational medicine program. Further, the individual employee's confidence in the quality of the program results in enhanced compliance which, in turn, will expedite case management toward more timely and expeditious resolution of the case.
A second broad area where hospital-based programs can enjoy a competitive advantage as a component of their affiliation has to do with access and depth of resources. Access is enhanced initially by the fact of the hospital-based programs' singular focus on occupational medicine. Simply stated, referral to the program for work-related injury treatment or examination services will secure services in an environment in which the exclusive priority is occupational medicine. Consequently, employees referred in that context will not be mixed in with private or urgent care cases and generally will enjoy a higher priority in terms of access to the primary care provider.
Primary access also is enhanced in the close coordination between the hospital-based occupational medicine program and the ED. Unlike in the days of industrial medicine, today hospitals that develop and deliver strong occupational medicine programs also have integrated systems in their EDs to actively coordinate with those programs. Consequently, injury treatment is available in a true 24-hour format, regardless of the severity of the injury, and will result in the delivery of the core values of access, communication, cost containment, and disability management, regardless of the location of the delivery of the initial care.
Interface between ED and occupational health
This close coordination often is accomplished through regular and active interface between occupational medicine and ED management, and it generally will result in a structure whereby work-related cases presenting to the ED will receive initial treatment only in the ED and immediate referral of both the case and the case management agenda to the occupational medicine entity. Occupational medicine program management can then carry forward with case management in pursuit of early resolution and return to work, as well as proactive communication to the employer.
The access requirement is not limited to primary care. Whether the primary care occupational medicine program is represented as a hospital-based or freestanding, a significant percentage of the treatment agenda will require the intervention of subspecialists and subacute diagnostic resources.
Through its integration in the hospital service matrix, the occupational medicine program has the unique ability to develop a panel of secondary resources in orthopedics, neurology, physical medicine, dermatology, and psychiatry, as well as coordinated access to extensive rehabilitation and inpatient and outpatient diagnostic services.
When configured in this format, the occupational medicine program can continue its gatekeeper function, ensuring the core values are continuous, including the delivery taking place in the secondary environment. Conversely, freestanding occupational medicine programs struggle with this agenda.
While it's true that all primary care providers are free to establish relationships with secondary providers under terms that may support the delivery of the occupational medicine core values, the fact is that the independent provider's access and leverage with the secondary provider is considerably less than in the case of the hospital-affiliated program. Consequently, the likelihood of the freestanding organization's ability to develop and actively monitor as robust, comprehensive, and appropriate a network of providers is severely diminished.
Finally, hospital-based programs offer access to a host of other health services offered through the hospital, which may be appropriate to the employer constituency. Employee assistance programs, wellness programs, and managed care insurance products are a few that can be introduced to the employer environment through the active relationship of the occupational medicine program.
While no one is suggesting the marketing representative for the occupational medicine program carry the ball for these departments, they certainly can be informed enough to identify employers with specific needs and accommodate referrals, which will serve to quickly fill those needs. Again, freestanding organizations generally lack this capacity in any regard and will tend to be restricted to primary care and occupational medicine activities.
Cost-containment advantages
The final and perhaps most significant area of differentiation a hospital-based program can offer to the marketplace can be defined in the area of cost containment. Again, the frontier days of industrial medicine correctly characterized hospital services as excessively costly and unwieldy toward the likely introduction of additional management and disability costs.
Today's environment, however, is quite the reverse. Initially, hospital-based programs enjoy the economy-of-scale purchasing power available to the hospital, and they often are able to equip and, in some cases, staff their operations at a lower cost than freestanding enterprises. One clear example of this phenomenon is in the area of information management.
While we suggest the optimal configuration for information management will include segregated billing and accounts receivable management, it's not necessary for the hospital-affiliated occupational medicine program to employ the full armament of accounting and fiduciary oversight.
Consequently, it can concentrate its available resources and energies in the area of information management on the sole agenda of occupational medicine. That can result in more appropriate and timely billing, more expeditious transmittal of case information, the ability to deliver outcomes-oriented analysis reporting, and other information management added-value services, which are uncommon in the freestanding model.
Because freestanding operations are often small businesses, they are required, within the locus of their operation, to address the full gamut of information management and therefore dilute their focus on occupation medicine in favor of the broader business management requirements. In the case of national publicly traded organizations, their freestanding "stores" may enjoy some home office support similar to hospital-based programs. However, the onus on these individual stores to monitor and report for SEC and stockholder compliance will again dilute the focus on occupational medicine issues.
Less pressure to profit benefits employers
Another key area where hospital-based programs can offer cost containment is in the aggressiveness in which the primary care entity pursues profitability. It is commonly known in the industry that freestanding units operate under a mandate of 20% to 25% net operating margins. That necessity is driven by the realities of attracting and maintaining investment, providing appropriate return on investment, supporting the administrative apparatus necessary to maintain the operations, and other financial considerations.
Conversely, the hospital-based program, as a component to an integrated system, often can deliver sufficient return on investment values to its ownership, as a function of the profitability of the primary care enterprise and the resulting revenues and profitability's intrinsic in referral into various hospital services and programs. Referral revenues can, in many cases, equal or exceed primary care revenues.
In most instances, referral revenues are not captured by the freestanding operation. Consequently, hospital-based primary care occupational medicine programs may operate sufficiently on a 5% to 10% net operating margin at the primary care level.
Cost containment also is present in the coordinated hospital services by nature of the inherent ability to make more timely and more coordinated referral. Cases, for example, that require surgical intervention, will receive timely referral to orthopedic and surgery specialist, enjoy prioritization in access to the operating room, and be actively monitored from a case management perspective, ensuring aggressive rehabilitation and optimal early return to work.
As a result, employers generally will see lower lost wage indemnification and operational disruptions costs, which will reduce the total cost experienced relative to work-related injury. Cost containment as a function of ready access also is available through other expeditious referral to aligned resources, as well as those resources previously discussed, which may be outside the area of occupational medicine.
In this new, enlightened age of hospital-based occupational medicine delivery, it is possible for program management to obtain and then represent its unique ability to provide a superior product to the marketplace.
Management first must ensure the appropriate governance and management apparatus is in place, appropriately coordinate with the array of available hospital services, and actively educate the marketplace as to the added value of the unique attributes of the hospital-affiliated program.
Such programs then are positioned to enjoy robust support from the marketplace. Then the hospital-based occupational medicine program can truly represent itself to the market as occupational medicine, delivering a better, faster, cheaper product to its employers.
[Editor's note: Mike Grosh can be contacted at SPAN Corporation, 2621 Carpenter Road, Ann Arbor, MI 48108. Telephone: (734) 973-7717. Fax: (734) 769-6268. E-mail: [email protected]. Web site: http://www.spancorp.com.]
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