Look to other segments of health care for solutions to emerging challenges
Look to other segments of health care for solutions to emerging challenges
Those who have faced similar problems can provide answers
Patient access difficulties, the advent of managed care, an increasing data burden, and prohibitive government rules and regulations are all situations hospices deal with in their daily struggle to provide care to the dying. While those challenges have made business difficult, hospice is certainly not the only segment of health care that has had to deal with them.
Hospitals, for example, have had to adapt to deep cuts in reimbursement and the need for more sophisticated data collection when the Health Care Financing Administration (HCFA) implemented diagnosis-related groups nearly two decades ago; physician practices have had to reduce costs with the advent of managed care; and home health providers and nursing homes have had to find ways to lower costs in anticipation of the prospective payment system.
As hospices search for the answers and hope for regulatory changes, perhaps they should investigate the experiences of others in the health care industry. In addition to learning from their colleagues in health care, there are lessons that can be learned from the world of business, experts say.
"Hospices can learn something from not only other health care organizations, but also from successful businesses," says Patrice C. Moore, RN, MSN, president and founder of The Watershed Group, a hospice consulting firm in Gainesville, FL.
Despite the best intentions of hospices, many take an idealistic view of their mission, while failing to grasp the reality that they, too, are businesses. By virtue of that, hospices are subject to rules that govern successful businesses, such as expanding their markets and keeping costs in check.
"We [hospices] think we’ve been handed a set of unique circumstances, but a lot can be learned from how other industries adapted to their changing markets," says True Ryndes, MPH, president and CEO of the San Diego-based National Hospice Work Group and vice president of mission and policy at San Diego Hospice.
Improving access
Perhaps the most troubling challenge hospices face today is increasing access to hospice care while also promoting appropriate admissions. Medicare policies have created a double incentive to withhold hospice care. Current reimbursement rules create an incentive for physicians to treat patients longer, while eligibility requirements require physicians to make an uncertain prediction of a patient’s life expectancy.
Those are problems that can only be solved through regulatory relief, but there are other barriers to access — physician unfamiliarity with eligibility requirements and prohibitive admissions processes, for example.
"There are so many hoops hospices place in front of dying patients that often patients die prior to admission," says Moore. "It is not uncommon for admission staff to be reluctant to admit due to busy case loads of the primary nurses, or the medical director not being available but one day a week to review admissions."
The solution lies in hospice’s close relative, home care. The example that home care sets for hospices, says Moore, is in how home care providers have educated physicians regarding home health and admissions requirements.
"Home care has done a much better job of informing physicians on the benefits [of their care]," says Moore. "I’m not sure hospices have always done this."
Among the education lessons hospices should provide to physicians: local medical review policies to illustrate when a referral is appropriate. Moore says hospices need to make regular visits to physician offices to provide education to doctors and their staff.
"Provide office staff education and offer to help complete forms and provide written reports to physicians about their patients," Moore says.
While improving access is greatly dependent on industry leaders to prompt regulatory changes, hospices can improve their chances of survival by being more fiscally aware. Many hospices operate absent of financial reviews and accountability, says Moore.
"Very often, executive directors do not know the cost of those variables that can make a difference in survival, such as staffing, supplies, drugs, equipment, and travel," she says. "By paying attention to the details of those things you have some control over, costs can be reduced. Pay attention to the little things."
Experts say that hospices have a lot to teach others about efficiency by virtue of operating under per diem payment from Medicare. But those same experts still say that hospices can have better financial accountability to become even more efficient.
Hospitals provide a good example of how hospices can gain control of their costs. "In the ’80s, you saw a lot of central supplies offices in hospitals disappearing," Moore says. Keeping a surplus didn’t make sense. Instead, inventories reflected what they actually needed. Hospices don’t realize how much inventory is in the trunks of nurses’ cars.
Hospitals began measuring costs by looking at how much it cost to deliver care to individual patients. Their expertise has grown to allow hospices to track costs from various angles, such as by disease or by physician.
To a lesser degree, hospices have begun to collect cost data as part of HCFA’s newly required cost report. But, Moore says, hospices need to track costs beyond what is called for in the cost report.
"The cost report is just the beginning but it is not going to tell you how to run your business," Moore says. "Look deep into your chart of accounts so you can look for excesses."
The data dilemma
The need for better cost accounting among hospices underscores the developing wave of data collection that is preparing to crash down on hospices. Cost reports represent only a fraction of the hospice industry’s future data responsibilities, experts say.
"What will probably happen at first is that cost reports will generate poor information, but it will get better as the years go on," says Ryndes. "Hospi-ces will learn that it is something they will have to live with and get better at."
Like hospitals two decades ago, hospices need clear data to make their case to government and commercial payers. Hospices have claimed for years that hospice care is more efficient and, in the long run, less expensive. While the claim is plausible, little hard evidence exists to support it. The reason is simple.
"Most hospices do not have adequate data systems, so they are making decisions in the dark without concrete information to back up their decisions," Moore says. "What are the costs per patient day of each expense? Where does most of the revenue come from — patients with lung cancer or heart disease? And how much does it cost to run a fundraising program? Many hospitals have those systems in place, and certainly successful businesses know how much their costs are and what their turnaround time is for placing an order to delivery."
Hospitals set the example for hospices in their development of common definitions to ensure that hospitals are collecting the same data the same way. Hospitals also provide an example to an industrywide commitment to data collection.
"Collecting data as part of an everyday routine is an obstacle for hospices," Ryndes says.
There is movement in the right direction. Experts point to the efforts of the Alexandria, VA-based National Hospice and Palliative Care Organization (NHCPO) to develop an industry data collection tool. One stumbling block, however, is the lack of available data-collecting software, says Ryndes.
Embrace managed care
Data, of course, play an important role in managed care. With managed care’s emphasis on cost, data help prove courses of treatment are not only clinically effective but cost-effective as well. Managed care represents a whole new frontier for hospices, says Lisa Spoden, PhD, MBA, chairwoman of the NHPCO’s Managed Care Task Force and president of Columbus, OH-based consulting firm Strategic Healthcare.
"As our population changes, not only will it get older, but there are going to be more chronically ill patients," says Spoden. "It is becoming more important that hospices understand managed care."
Physicians offer a good example of a segment of health care that has adapted to the advent of managed care. While some physicians bucked the trend, most went along knowing that managed care represented a way to gain access to more patients.
In a time when hospices are trying to increase their patient base, managed care is an untapped source of revenue. Like hospices, physicians garnered much of their income from government-sponsored payers, and had to follow Medicare rules whether they were providing care to Medicare patients.
Medicare certification is also a concern to hospice providers who have seen managed care contracts that jeopardize their Medicare certification. For example, some contracts call for medical management of a hospice patient to remain with the managed care organization — a direct conflict with Medicare conditions of participation, which call for patient management to be the responsibility of the hospice.
Like physicians, hospices must become savvy negotiators of managed care contracts. They need to embrace managed care and learn how to get the most out of its contractual arrangements.
Act like a business
Improving cost accounting and trying to expand current markets are not principles that govern just hospices, but all businesses. Hospice is an industry at a crossroads, says Ryndes. Government regulations and traditions have limited the scope of hospices at a time when hospices should be trying to expand their scope.
"Hospice needs to diminish its association with death and dying, which is actually an obstacle," says Ryndes.
He points to other industries that suffered from identity problems or a changing marketplace. The successful ones focused on customer needs and concentrated their core competencies to market demands.
Coca-Cola is one example. At one time, Ryndes says, the company offered a single product, but as customer tastes changed, the company adapted and began offering new products. The railroad industry, too, found much of its market being eroded by the trucking industry. Railroad managers realized that their core competency was not in moving goods, but in transportation, which includes moving people.
Ryndes says hospices must climb out of the end-of-life box and create new product lines. "The core competency of hospices is not just care of the dying, but also transition management."
Hospices are quick to point to regulatory barriers that prevent them from being reimbursed for palliative care, but Ryndes says there are also self-imposed barriers that are allowing others to reach patients who would be better served by hospice.
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