Deciding to expand? Run the numbers
Deciding to expand? Run the numbers
Internal benchmarking and redesign pay off
As managed care puts more restrictions on emergency room access and capitation limits reimbursement, many hospitals are developing urgent care centers as an alternative to high- dollar visits. But making this move automatically without carefully scrutinizing the center's feasibility may hurt, rather than help you, says Edward I. Walkley, MD, interim director of pediatric service at Mary Bridge Children's Hospital and Health Center in Tacoma, WA.
"If we had built it, they would not have come," he says. Walkley explains that when the state decided to switch Medicaid patients into a managed care plan, and capitated primary care physicians, administrators at the 72-bed hospital knew they were facing dramatic changes in business.
"There was a perception that hoards of people were running to the emergency room for an unnecessary emergency room visit and that emergency room care was expensive," he says. "So they wanted to build an urgent care center to handle this population."
But Walkley wasn't sold on the idea, so he suggested they study the situation first, using a database he had developed in 1993. In addition to the date, time, and length of the visit, the "homemade" internal benchmarking tool tracked these details about all emergency room patients:
· chief complaint,
· ICD-9 code;
· preliminary diagnosis;
· facility charges;
· payer reimbursement.
The database also assigned a certain number of "acuity points," based on a system previously developed by the nursing staff.
"We've gone through several patient-focused work redesigns," he explains. "The intent was that the patient see fewer faces, but in reality they were seeing cheaper faces. As a result, the nursing staff had to look in detail at what they did and how they did it."
The acuity system assigned a certain number of points to each patient that translated into nursing minutes, he explains. "This score measures the intervention. For example, we can predict how many minutes it will take to start an IV or how long a respirator treatment will take," he says. "Now our staffing model is more realistic because it is set to the acuity points, rather than patients per hour."
The acuity point system was a critical element in the database because it allowed Walkley to measure patient density and type in the ED.
"We knew what time they arrived, and what time they went home as well as the number registered and how much nursing intervention was required, so we were able to create an hourly census graph," he explains.
He then created two sets of models as scenarios for determining staffing costs. "We considered a nurse practitioner and a receptionist model and a private pediatrician's office and receptionist model," he says.
By developing an hourly dollar graph of anticipated revenue, Walkley could determine if the center would generate the certain number of dollars per hour to be profitable, he explains.
Idea killed by numbers
The number crunching showed that the center would only be profitable during the evening. "It just wasn't economically viable," he says.
Yet, even though the idea of the urgent care center was not a timely one, managed care was a reality - and the ER had to respond to it. "In three months [after the switch to managed care] we lost 30% of the ER volume. Primary care physicians, who were now capitated, had incentive to stay open longer and handle cases in the office - the same cases which once would have been sent to the ER, and, if we'd built it, the urgent care center," Walkley says.
Walkley and other physicians then began to develop a strategy that would position the ER to "do what it does best" - treat emergencies.
"We knew that primary care physicians were now keeping the low-urgency cases, so we asked them to send us the high-urgency ones," he explains.
Meanwhile, the decrease in low-urgency cases left more time for ER personnel to handle the high-urgency ones such as asthma. "Instead of seeing them in the ER and then admitting them, now we could lengthen the ER stay and decrease length of inpatient stay as well as admission rate," he explains.
The physician team developed a series of critical pathways that concentrated on early intervention for high urgent care cases such as asthma, dehydration, bronchitis, fever, and pneumonia.
The paths worked, earning accolades from managed care and primary physicians alike. For example, asthma patients who received early aggressive therapy in the ER stayed one day less than those who were admitted to the hospital directly from the pediatrician's office.
The final lesson of not building the urgent care center was a surprising one: Volumes were stagnant, but revenues increased. "The acuity changed. One child with asthma replaced two or three with colds," he says. "Now we're in partnership with the primary care community. Both sides do what we like to do and are set up to do."
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