Clinic Management Models: Finding Your Way with The ‘Quick Start’ GPS Method

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Issue Number: 
Volume 9 Issue 7 - September 2015
Author(s): 
Darlene Carey, MBA

The wound care industry has changed dramatically since regulations for hospital-based outpatient departments (HOPDs) in the mid-1990s created what we think of as the “outpatient wound clinic.” The changes have been so significant, in fact, that many providers would say the industry has come full circle. One could argue that “wound centers” began as the distribution system for a specific product (Procuren) in conjunction with an outpatient wound care model. Since that time, several companies have expanded on that model by adding hyperbaric oxygen therapy (HBOT) and hospitals around the country have added this service line to their outpatient offerings. Today’s industry has grown from a few wound center management companies to many companies ranging in size from small to relatively large. However, in the last five years, mergers of the larger companies have resulted in the creation of even larger players in the market resembling the scene that existed in the 90s. This “merger mania” has resulted in some competing hospitals that are geographically very close to being run by the same management company. Many hospitals are exploring cancelation of or non-renewal of their wound center management contracts because they question the wisdom of having the same company managing competing wound clinic business entities within different hospital systems.

Where do hospital administrators go to find help in opening a clinic if they don’t want to utilize a company that’s affiliated with a competitor? What if help is only needed in getting the wound clinic doors open, after which the desire is to run the program internally? What if the goal is to seek help in transitioning out of a prior management contract and into self-management? The GPS Quick StartTM program (Precision Health Care, Boca Raton, FL) is designed with these scenarios in mind. Regardless of the size and scope of one’s wound clinic business, it remains essential to have a systematic approach to opening and operating outpatient programs. The successful business model on which most management companies have been built for many years is not known for its flexibility and is instead labeled as “cookie cutter” by some. This model requires a large, monthly financial commitment on the part of the hospital — usually for several years. These contractual arrangements are usually structured in a way to ensure the financial success of the management company regardless of how well the hospital fares in terms of billing and collecting. That is because, in most cases, the monthly fee paid to the management company is paid up front and is not directly linked to any billed or collected wound care services. Furthermore, management contracts are rarely easily tailored to take advantage of any expertise that might already be in place at the hospital. Although a particular hospital might already employ individuals with (for example) expertise in facility design or revenue cycle integrity, the standard “one size fits all” management contract does not provide sufficient flexibility for these roles to be fulfilled outside of the management arrangement. Precision’s GPS Quick Start program is designed to help hospitals reduce the learning curve and achieve positive financial viability in a short timeframe.

What Hospitals Expect From Management Companies

Hospital officials typically engage wound clinic management companies for different reasons. Some healthcare providers possess clinical expertise in wound care, but no operational knowledge of how to successfully implement and manage a comprehensive outpatient program.   Other facilities may want to add a wound center service line, but do not have the capital to move the project forward. Some hospitals may require both clinical guidance and operational expertise, but do not want to enter into a long-term contract with a management company on the eve of potentially huge changes in outpatient payment we’re expecting in this country. What options does that leave today’s facilities?

One avenue to consider within this patient care niche is the GPS Quick Start and the Giving Partners SolutionsTM Insource programs. These customizable programs allow the hospital access to all the components of a management company, such as financial analysis and performance, facility design, revenue cycle, equipment, staffing and productivity measures, and policies and procedures — but only for as long as the selected services are needed. Under this model, hospitals are also able to determine which types of services they require and contract only for those services, rather than being required to adapt to the business model of the management company. Not every hospital will need a full-management option; some may only need assistance in opening a clinic they intend to run independently. Some hospital officials may have previously agreed to management contracts they now wish to transition away from and towards operating a clinic themselves (insourcing). However, in order for hospitals to separate from a management company, a detailed plan to replace equipment, staff, procedures, and industry knowledge is needed. Most importantly, continuity of patient care during the transition of operations has to be the main focus.

Ready for Payment Reform?

Those hospital officials currently in a wound clinic management contract should be assessing the specific plans the management company has related to transitioning away from volume-based payment to a system that’s value based. The reimbursement structure that has served management companies and hospitals for two decades could change within the next three years. Soon, reimbursement will be based on the quality of care being provided, not how many patients are seen in clinic or the number of debridements that are performed. Payers are now actively directing patients away from clinics perceived to have high costs (and low value) to those where they perceive their beneficiaries are receiving the best value – meaning the best outcome for the lowest cost. This has been happening for several years in other care specialties such as cardiac, stroke, and oncology.

This trend means the business model on which the success of one’s wound clinic has been built is about to be its undoing. In the past, “success” was defined as generating revenue by maximizing interventions. Now, payers see this behavior as an indication of inefficient care and are sending patients elsewhere when this occurs.

How are payers identifying clinics that provide value over volume? Just as they have for the other specialties, by invoking performance on quality measures and directing patients to those programs and providers who have demonstrated consistent quality care (eg, offloading diabetic foot ulcers, compressing venous ulcers, assessing lower extremity vascular status, etc.). These quality metrics are no longer self-reported in a manner that management companies and/or wound clinics choose, and are instead reported to the Centers for Medicare & Medicaid Services (CMS) either via the Physician Quality Reporting System or by participation in registry reporting as part of the Meaningful Use of an electronic health record (EHR). CMS has approved specifically defined wound and HBOT quality measures through qualified clinical data registries (QCDRs). Through QCDR quality measures, wound clinics across the United States will be reporting quality metrics designed in the same way so that their data can be publicly reported and fairly compared.

The quality reporting initiatives through QCDRs have major implications for the reporting of wound “healing rates.” This author has written before about the healing rates being used as the industry standard of outcomes.1 All healthcare clinicians know these healing rates are skewed because patients who stay in service for longer periods, or whose outcomes are poor, are simply removed from the denominator. This practice artificially inflates the healing rates within one’s center. The real truth is that the overall healing rate for most centers with all patients included is about 66%.2 Clinic providers do not seem to want to report the real truth about healing rates because any wound center that did would look like it was doing a “poor job” in comparison to those who inflate their outcome data. But think about the implications of inflating healing rates: Does your hospital trauma center claim that all trauma patients survive? Do the cardiologists claim that all heart failure patients live forever? All other specialists report outcomes in relation to how sick their patients are — these patients are being risk stratified. This is one reason the industry is moving forward with programs such as the US Wound Registry’s initiative to report risk-stratified healing rates using the Wound Healing Index. The US Wound Registry will report the healing rates that centers achieve among (for example) wounds with less than a 25% predicted likelihood of healing. Among wounds predicted to fail, a healing rate of even 50% is “a victory.” That’s how wound centers can really differentiate their services and payers can assess which centers are providing the best value.

Payers are also increasing the physician training requirements for hyperbaric medicine, in some cases requiring physicians to be subspecialty board certified in undersea and hyperbaric medicine. Since there are only a few hundred physicians in the entire country who’ve met this requirement, several payers have agreed, as an alternative, to credential physicians who work in a clinic accredited by the Undersea & Hyperbaric Medical Society (UHMS). Management partners will need to have proven success in helping hospitals gain UHMS accreditation.

Making The “Quick” Transition

Consider the following hypothetical scenario: Your HOPD wound clinic has operated under a management contract for many years, and clinical and financial performances have both produced optimal outcomes. However, the parent hospital is now becoming part of an accountable care organization (ACO). Your wound center is expected to be a lynchpin program for controlling costs in this model, but in order for that to happen the clinic will need to provide wound care across the continuum from the acute care hospital to the nursing home (including long-term care, rehabilitation services, and the outpatient wound clinic). The management contract is not flexible enough to make this work. Most management contracts have monthly fees. The hospital generates the revenue to pay these management fees by maximizing the volume of high-dollar services such as HBOT, debridement, and cellular products. Under the terms of most management contracts, not even stable hospitalized patients can be treated with (for example) HBOT since those charges fall under the hospital’s diagnosis related group payment and are not separately billable. However, in an ACO setting, the institution may receive a bundled payment for a patient’s entire course of care regardless of the care setting. A patient living with a significant wound would require cost-effective care to be coordinated from one setting to another. The ACO will need to make decisions regarding many services (eg, HBOT, durable medical equipment, dressings), not based on how much they can charge but on how much they can save by achieving the best outcome at the lowest cost. This means wound clinics brought into an ACO arrangement could suddenly find themselves in a world in which their financial success is no longer measured by the volume of their services (total charges) but by the amount of money they save across the healthcare settings – the value they deliver. When wound clinics suddenly begin to reconsider the use of advanced therapeutics and other interventions in this light, billed charges will likely decrease substantially, making the management contract financially unsustainable in the new model. When the management contract is cancelled, the company could take with it the equipment (including hyperbaric chambers) and EHR system being utilized. Thus, transitioning from a management contract can be considered very much like opening a center “from scratch” with added risks of interrupting patient flow while trying to make the transition appear seamless to both referring doctors and patients. It is also possible that the hospital will just now be realizing that it can’t control wound care costs across the continuum of care without an outpatient wound clinic. So, just when you have finally been given the green light to start a wound clinic, the institution is not willing to commit to a long-term management contract given the uncertain reimbursement climate. The hospital has told you to “figure it out.” What’s next?

Regardless of whether you are opening a program or transitioning from a management company, the checklist must include:

  • financial analysis and performance
  • facility design
  • integration into the hospital system
  • revenue cycle from chargemaster to denials
  • equipment (including HBOT chambers) and supplies
  • staffing and productivity measures
  • policies and procedures
  • physician champion and clinicians
  • training (wound care and hyperbaric education, workflow, EHR, referral development, billing)
  • marketing
  • medical analytics
  • safety and compliance programs
  • quality measures
  • transition planning
  • transition of data

There’s a lot of planning involved just related to “opening the doors” of the clinic or to make a smooth transition away from an organization that has managed the program. Then the “real work” begins: proper training for staff members operating equipment, staff and patient scheduling, tracking clinical outcomes and financial success, implementing appropriate workflow procedures with patient care, monitoring revenue cycles, calculating and reporting quality measures, etc.

Hospital administrators need to make tough decisions about wound care services. Providers currently in expensive management contracts may be rightfully worried that the rapid restructuring of outpatient payment will leave them unable to pay the management company bill and, in many cases, the management company may be running competing wound clinics. For those hospital officials who think they’re ready to run the program themselves but are worried the transition could be difficult, securing the experience and expertise in making this transition may be the only thing that’s really needed to ensure continuity of patient care and positive financial impact.

 

M. Darlene Carey is director of operations of Precision Health Care, Boca Raton, FL. She utilizes metric management to enhance performance and embraces workflow improvement to remove obstacles to success.

 

References

1. Carey MD. Navigating the path toward value-based wound care. TWC. 2015;9(5):26-29.

2. Fife, CE, Carter MJ, Walker D, Thomson B. Wound care outcomes and associated cost among patients treated in U.S. outpatient wound centers: Data from the U.S. Wound Registry. WOUNDS. 2012; 24(1):10-17.