Des Moines, IA-based Mercy Hospital Medical Center offered its employees the chance to voluntarily resign from their jobs or switch from full-time to part-time status, according to a memo sent to Mercy's more than 6,900 employees. The voluntary staff reductions come as many Des Moines-area businesses face cutbacks and job eliminations in the face of an economic recession. However, Mercy officials emphasized that the offer was not strictly about the economy: The hospital views the offer as a benefit to employees who are planning to change their status with the company.
Hospital emergency departments are full of patients who don't belong there. I'm amazed at some of the stories I hear from a friend of mine who is a nurse practitioner in an ED. For instance, the mother who showed up with her child who had lost a tooth—she wanted to make sure it wasn't going to get infected. Or the parents who brought in a child who'd had a fever for all of five hours (and hadn't given him Tylenol yet). It's not just neurotic parents, either; there are scores of people who come in for a sniffle or sore throat.
It's not news that EDs are overcrowded, plagued by long waits, and have patients lining the hallways. Unfortunately, the current economic downturn means that the uninsured ranks will likely grow, prompting even more patients to use the ED as their primary-care provider. Still, I'm not sure what senior leaders can do to prevent patients who don't even need a doctor's visit from coming to the ED. It's not like they can post a sign listing the ailments that don't warrant a trip to the emergency room.
According to recent reports, uninsured patients seeking primary-care at hospital EDs are not the main culprit behind the overcrowding issue, anyway. In an August 2008 report, the Centers for Disease Control and Prevention found that the uninsured make up 17.4% of ED visits. Patients with government-sponsored health plans and privately insured patients make up about 42% and 40% of the ED volume, respectively.
Spikes in the number of insured patients seeking treatment in the ED—especially the aging population—are the main driver behind the increase in ED visits, which has grown by 36% since 1996to about 119 million, the report says.
Senior leaders may not be able to post a sign banning patients with nonurgent conditions, but there are some steps they can take to ease overcrowding. For example, a growing number of hospitals have implemented fast-track EDs to help manage patients with nonemergent conditions in a more timely fashion. Memorial Hermann Memorial City Medical Center in Houston, TX, actually strives to give every patient a quick examination by a nurse or other health professional within five minutes of arrival and then get the patient to a physician within 30 minutes. Other health systems have policies in place to redirect patients who show up at emergency departments without emergency symptoms to local community health clinics or urgent care centers—or, at the very least, educate them about local clinics where they can seek treatment for nonurgent conditions next time.
When designing these programs, hospitals should consider ways to educate or better meet the needs of a growing elderly population that is frequenting the ED more than ever. Hospitals may also want to reevaluate their patient education materials for new parents, because the highest ED rates per population were for children under the age of 1, according to the CDC report. There are more than 900 visits per 1,000 population for children 12 months of age and younger, so essentially almost every newborn visits the ED during their first year of life.
On the other hand, if you are a cash-strapped hospital, perhaps the neurotic parent may not be such a bad thing—but only if they're insured.
Carrie Vaughan is leadership editor with HealthLeaders magazine. She can be reached at cvaughan@healthleadersmedia.com.
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Many employees and managers are concerned about what will happen with the global economy, the U.S. economy, or even their own careers. According to experts, 2009 will likely be a tough year, which is something managers and administrators must prepare for.
In this economic downturn, leaders must emerge stronger and more resilient. Business advisors urge leaders to watch the external forces that are driving change and be able to anticipate changes that will impact them and their organization.
While 2008 brought hope and despair, 2009 will bring concern and focus. We've identified 10 trends based on our work with clients throughout the United States that will have a significant impact on our healthcare delivery system. These trends will direct board members and senior management to focus and concentrate their resources to address the very difficult year ahead.
Here are our 10 trends and the key issues that should be discussed in the boardroom.
The Economy
Although healthcare is generally seen to be recession-proof, hospitals are not immune to rises in general delivery costs, as well as spikes in patient premiums and co-pays. Many unemployed workers accessing healthcare benefits through COBRA will find premiums unaffordable. Retail healthcare services will see a drop-off in use, despite discounting of prices. Hospitals should prepare for corresponding drop-offs in volume, as well as higher incidences of uncompensated care.
Executives and their boards should conduct monthly, or even weekly, review of accounts receivable, collection, and write-off policies. Creativity with pricing policies, payment plans, and discounts for early payment are encouraged.
Healthcare Reform
President-elect Obama has targeted the following goals for healthcare: reduced costs, enhanced IT, and increased access. Undoubtedly, expansion of the State Children's Health Insurance Plan will be advanced quickly. The trickier notion of universal coverage will require cooperation and compromise between Senators and House Representatives, along with business. Expect efforts by the government to negotiate with pharmaceutical companies for significant discounts on behalf of Medicare recipients, reduce payments to the Medicare Advantage health plans, and tighten or close the Part D "Donut Hole."
Executives and their boards should examine their exposure to Medicare Advantage volume. Should your system partner with a health plan, such that you may offer a private label "branded" universal care product in your market?
Other options include:
Monitoring new competitors. Community agencies, which served the uninsured, will now compete for those insured patients.
Avoiding capitation payment risk for Medicare HMO contracts.
Formulating a plan to support IT integration with your medical staff?
Workforce Supply
The losses in annuities, whole life insurance, 401Ks, IRAs, retirement savings, and real estate values will bring retired nurses, physicians, allied health professionals, and management out of retirement or prompt those close to retirement to reconsider.
Executives and boards should work with their human resource departments to use creative ways to tap into this returning workforce and develop flexible part-time programs. They should also monitor employee and customer satisfaction as workers return or stay when they thought they would be retired, as this could lead to dissatisfaction in the ranks.
Other options include:
Monitoring traveller and registry use, and consider forming an individual "pool" of floating employees.
Establishing a physician employment or contracting model that permits physicians and nurses to work one to four days per week (part-time) with the hospital taking responsibility for managing the practice.
Capital Expenditures
It has become and will remain difficult to borrow money to undertake major capital expenditures. Expect lenders to look for "preferred relationships" with health systems through commitment to multiple financings and movement of money and investment accounts to the lending bank. Interest rates will be higher than historical levels, covenants will be strict, and obtaining an investment grade rating will be more difficult. Obtaining credit enhancements will become almost impossible.
Other options include:
Examining possible reductions in the size of your borrowing.
Assuring that a clear process for prioritizing capital expenditures exists that matches up with strategic and operating objectives.
Selling underperforming assets.
Doubling your efforts in fundraising and grant writing.
Considering leasing versus buying.
Considering a merger or acquisition by a stronger health system.
Focusing on improving your operating performance. Business development opportunities in surgery, imaging, and the emergency department are available.
Community Benefit/Tax-exempt Status
As the government experiences its own reduction in revenue, expect challenges and greater scrutiny of hospitals' tax-exempt status and the corresponding community benefit. Executives and boards should discount and monitor community benefit activities. Scour your activities to identify all that you do.
Other options:
Encouraging your workforce to get involved in volunteer activities coordinated and sponsored by your organization.
Monitoring upcoming 990 disclosures and educate yourself as to the information and rationale as to why the amounts are what they are.
Ensuring a strong, well written community benefit plan and maximize your public relations effort.
Utilization Decline
The recession, higher unemployment, and the increased cost of healthcare with larger co-pays will decrease utilization, especially in the retail and elective care (e.g., plastic surgery, chiropractors, physicians, ambulatory surgery, and imaging).
Executives and boards should maximize revenue by improving resource utilization through advanced hospitalist models, palliative, and home care.
Other options include:
Managing variable expenses to actual volumes.
Exploring cash discounts to help with demand for services.
Targeting higher-income communities with more personal service or extras. Think service and value!
Strengthening core service lines by continuing to invest in top-notch physicians and efforts to enhance quality and reported outcomes.
Increased Organizing by Labor
President-elect Obama and the Democrats benefited by the strong support of organized labor in the election, which has expectations and demands in return for their efforts. Increased organizing efforts through the use of "card check" activities and efforts to establish nurse and allied professional staffing ratios at hospitals should be anticipated.
Executives and their boards should expect nonorganized hospitals and possibly large medical groups to experience organizing efforts by the unions. Monitor employees' feelings, turnover, reasons for leaving, and satisfaction. Make sure you stay close and communicate with them.
Other options include:
Actively supporting your industry associations in their efforts to deal with mandatory staffing ratios.
Monitoring efforts by labor to place limits on overtime.
Continued Transparency
Expect continued efforts to publicize quality, patient safety and pricing information. Both the government and private industry (e.g., health plans, employers) will provide greater access to information and make improved efforts at accuracy, timeliness, and relevance.
Executives and their boards should monitor relevant public databases that measure quality, patient safety, and pricing.
Other options include:
Working with management to demonstrate value (what outcome at what price).
Redoubling efforts to improve quality and patient safety. Ensure that systematic processes exist and that they are in place to correct problem areas).
Continuing to manage down your expense per operating unit and by episode of care).
Greater Physician Alignment
Expect a continuing physician shortage. Primary care will suffer the most. Conversely, some physicians battered by investment and retirement losses may knock on your door seeking full or part-time employment. The baby boom physicians could become discouraged and resentful of a profession that has not met their expectations. Further, expect Representative Stark to review efforts to restrict or eliminate physician investment in healthcare services in which they can refer. Monitoring physician satisfaction will therefore be crucial for executives and their boards.
Other options include:
Communicating with physicians and identify their needs. Seek to find solutions through collaboration with economic benefit to the doctor and the care delivery system.
Educating yourself around medical staff redesign. What is your hospital's plan for assuring effective integration with physicians?
Monitoring increased turf wars between physicians over patient flow and procedures. Does evidence-based information indicate who has the superior outcome?
Changing Delivery Models
Expect to see new delivery models emerge through medical homes, palliative care, telemedicine, and outsourcing. New payment methods, along with outcome and price guarantees will continue to emerge and evolve (e.g., ProvenCare, acute-care episode, Prometheus). We could see a consolidation of freestanding imaging centers as they are required to offer multi-modalities and be certified.
Executives and their boards should monitor the growing member of new payment methodologies and pilot programs. Begin articulating your hospital's vision for clinical care delivery in 2012. Now is the time to create the structures, tools, and delivery models to get you there.
Other options include:
Working closely with your physicians to explore new delivery models and assessing these changes based on their economics (expect greater use of NPs/PAs and telemedicine).
Educating board members on these new delivery models.
As we anticipate 2009 and all of its challenges and promise, we are reminded how important it is for senior leaders to define the vision and concentrate the healthcare organization's precious resources in a few areas in order to optimize performance. In difficult times, superior leadership emerges to lead and perform.
Steven T. Valentine is president of The Camden Group, one of the nation's leading healthcare advisory firms. He may be reached at (310) 320-3990, or by e-mail at: svalentine@thecamdengroup.com.
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Tom Daschle formally began the incoming administration's quest to overhaul the nation's healthcare system, telling former Senate colleagues that the task had become more urgent because many people were losing health insurance, along with their jobs, in the recession. Members of both parties offered a friendly welcome to Daschle, the man chosen by President-elect Barack Obama to be secretary of health and human services. The hearing was the first of many to be held for members of the team being assembled by Obama, and the questions and answers touched only briefly on the economic and fiscal crisis that will test the new administration.