Former Alabama Gov. Don Siegelman and HealthSouth founder Richard Scrushy will ask three federal judges to overturn their bribery convictions, arguing their 2006 trial was riddled with errors. Defense lawyers for Siegelman and Scrushy have argued there were multiple mistakes at the 2006 trial that merit a new trial or the case being tossed completely. Prosecutors accused Scrushy of bribing Siegelman for an appointment to a state health board with $500,000 in contributions to Siegelman's signature political issue, the 1999 referendum to establish a state lottery.
Buzzwords make me cringe; words like "vision," "communication," and "innovation." They're like the beaverboard-textured, year-old granola bar in the vacuum-sealed aluminum wrapper that is sold as "natural," or the politicians who assure us they are for "education" and "jobs."
Too often, buzzwords are sound bites, signifying nothing, often told by poor managers to cover their own lack of shortcomings.
Peter Stark doesn't quite see it that way. The San Diego-based consultant and author has examined thousands of employee satisfaction surveys over the last 20 years from a variety of industries. He's compiled a list that shows that happy employees and successful companies value communication, vision, and innovation, along with a bunch of other buzzwords and catchphrases like "rewarding excellence," and "accountability."
This works for successful companies, he says, because they aren't buzzwords. The words represent actionable organizational philosophies.
"A lot of people overrate the word 'vision.' It has been a buzzword of the '90s and 2000s," Stark says. "But in organizations where employees say they love their job, and where they connect with their head and their heart, No. 1 on their list is that the company has a compelling and positive vision of who they are as an organization and they are able to communicate that to their employees."
No. 2 on the happy employee survey list is "innovation." Stark's surveys show that happy employees love working for companies that have enough confidence in their employees to let them solve problems.
Encouraging innovation is also the sign of a well-run organization, where employees understand their mission. "Whether it's with patient intake or improving physician support, the better a company and its employees have their day-to-day responsibilities down, the better the chance they'll have to work out something truly innovative," Stark says.
No. 3 on the happy employee survey is "communication." Again, this could mean anything, if it's just a buzzword. But Stark says true communication goes both ways, with managers communicating the right information at the right time to help employees do their job. Good news or bad, employees need to hear about it in a timely manner. It also involves listening to workers.
To encourage communication and innovation, Stark says employees should be required to provide one or two suggestions to improve organizational efficiency when they are filling out performance evaluations. "It says 'not only do I encourage employees to make suggestions, I expect it and I react to it and I reward it,' " Stark says.
So, what can you do at your healthcare organization to make buzzwords actionable? To change a corporate culture, Stark recommends that senior leadership, including the HR team, first define the vision. Once you know what you want as an organization, develop three to five strategic goals that will support the vision system-wide.
Then, create a department-by-department breakout so that your managers will understand their strategic goals and communicate them with employees.
Once your goals and strategy are in place, don't backslide. "Four to six times a year the CEO or the HR team must communicate to everybody where they are in relation to those goals," Stark says.
Show your employees the progress you've made on particular goals, and show how that progress is taking the organization closer to its ultimate vision.
"If you don't provide an update on the organizational vision and goals, at least four to six times a year, people will say 'Yeah, we've got a vision but nobody does anything about it," Stark says. When everything is in place, hold everybody accountable, including yourself. "Between the HR department and the CEO, the biggest piece is the accountability," Stark says. "Senior management has identified the three to five top goals, and each department director needs to be held accountable for the three to five goals in their area to support that overall vision. The more accountability, the better the chances for success."
And finally, to make this work, to change mere buzzwords into actions that will change a corporate culture, Stark says HR needs a seat at the table with senior management. It's hard for HR departments to talk about vision and goals when they aren't involved in the creation of that vision. And if HR is out of the loop, employees will know that very quickly. "The more credibility the HR department has, and the more people know they are in alignment with the CEO, the stronger the chances of success," Stark says.
John Commins is the human resources and community and rural hospitals editor with HealthLeaders Media. He can be reached at jcommins@healthleadersmedia.com.
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Generally, people think about personal improvement in terms of cutting out smoking or other bad habits, getting more exercise, losing weight, or taking a class to learn something new. OK, that takes care of improving at the personal level.
How do we improve in business? Much of the work surrounding business improvement involves proven process improvement programs like "Lean" manufacturing techniques and "Six Sigma," which aim to take wasted effort out of the processes used to create a good or service. Oh, and by the way, while you're working out the waste, it's nice to be able to sell a product or service that people can't or don't want to live without—and for which they are willing to pay higher and higher prices. My college economics professor would call this taking advantage of inelasticity of demand. When you have such a situation, you have much greater freedom to raise prices and thus increase your profit margin—usually the entire point of being in business in the first place. From an objective viewpoint, one could argue that increasing your profit margin is the ultimate example of improvement.
Healthcare is a classic example of the type of industry that can take advantage of inelasticity of demand. People will spend huge amounts of money in the hopes of improving their health, after all. In 2007, healthcare spending was 16% of our nation's GDP—an unthinkable number even 20 years ago. Experts predict we'll spend 20% of our GDP on healthcare by 2016, and there's no end in sight to the increase.
One health system CFO friend of mine is happy to point out that he doesn't see a ceiling of healthcare demand anywhere south of 30% of GDP. You might be surprised, but he's not happy about that—just realistic. The fact that we might bankrupt ourselves individually and as a nation as we approach that level of spending on healthcare, in his mind, is just a fact—not something to celebrate or lament. After all, how much would you pay to keep your health? Or the health of a loved one?
Then why would anyone running any kind of healthcare operation—from the largest academic medical center to the corner drugstore—want to cut prices? Because unlike some of their colleagues, they actually walk the talk of nonprofit healthcare.
Healthcare should be the next gold rush. Of course, most of you know why in most of its subsectors it's not—government reimbursement. Which is why my panelists from HealthLeaders Media's Top Leadership Teams event are so focused on improving by cutting the cost of care. That's right, they see their long-term survival in being among the low-cost leaders—a counterintuitive concept in an industry that has the power of inelasticity of demand.
The money for healthcare reimbursement increases over time simply isn't there, says Jeff Thompson, the CEO of Gundersen Lutheran Health System in Wisconsin, whose facilities happen to be among the lowest-cost, highest-quality healthcare facilities in the nation, according to the Dartmouth Atlas Project. Thompson's view is that healthcare providers need to focus on marrying low cost and high quality in order to thrive not just in the here and now, but in the medium-to-long-term future. One way to do that, he says, is by forming partnerships with local employers and payers to reduce cost and improve quality. But Gundersen is trying all kinds of ways to be more efficient, from integrating healthcare services through its electronic medical record to changing contractors' incentives for building in change orders to bricks and mortar construction to using energy cost-saving byproducts from fermentation at a local brewery.
"Having good finances is just a tool," Thompson told me. "The ultimate prize is making the cost not only low enough to compete but to improve health of communities."
Amen, brother.
Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at pbetbeze@healthleadersmedia.com.Note: You can sign up to receive HealthLeaders Media Finance, a free weekly e-newsletter that reports on the top finance issues facing healthcare leaders.
Over the past several months, the market environment has become worse than it's been in decades. Now, financial experts are predicting that as the $700 billion government bailout works its way through the system, secondary market bond trading will likely put downward pressure on yields.
We are all familiar with the financial success of the three-year Recovery Audit Contractor Demonstration Project, which as of March 27 yielded nearly a billion dollars in improper overpayments collected from providers. News that may not be as familiar is that, according to a recent report that includes updated appeals statistics through June 30, providers have appealed only 19.6% of the initial RAC determinations, and, of these, a mere 6.8% have been overturned. With numbers like these, it's clear that the rollout of the permanent RAC program in 2009 poses a serious financial risk to the health of acute-care hospitals nationwide.
False sense of security
Hospitals with foresight in preparing for the permanent RAC program are capitalizing on the opportunity to learn from the three state demonstration projects. They are doing this by focusing on the coding and medical necessity issues identified during the project, reviewing their PEPPER reports and redirecting resources to potentially problematic areas. They are also devoting greater resources to validating and monitoring the accuracy of ICD-9 code and MS-DRG assignment, and initiating corrective action when appropriate.
More commonly, though, hospitals are only focusing on ensuring the accuracy of ICD-9 code and MS-DRG assignment, and adhering to medical necessity screening criteria in determining appropriateness of inpatient versus outpatient designation. While this focus of energy constitutes a positive step in the RAC preparation process, two fundamentally important subsets that provide for continued financial exposure are not being addressed: clinical coding accuracy and medical necessity.
Clinical coding accuracy
Coding errors are defined as inaccurate coder assignment of principal and/or secondary diagnoses resulting in inaccurate DRG assignment. Accurate ICD-9 code and DRG assignment are predicated upon complete and accurate clinical medical record documentation—documentation that supports a patient's clinical presentation, medical workup and management throughout as part of the hospitalization. While achievement of the benchmark standard of coding accuracy (between 90% and 95%) is commendable, it should not be construed in and of itself as a measurement of readiness for a RAC audit, because coding accuracy does not necessarily equate to clinical coding accuracy.
Clinical coding accuracy is dependent upon physicians providing accurate, effective, and complete clinical medical record documentation that is reflective of patient acuity and risk of morbidity and mortality. Such documentation ensures that coding professionals have the information they need to make appropriate ICD-9 code and DRG assignments.
Clinical coding accuracy also requires that coding professionals have a reasonable understanding of medical necessity—and the knowledge and skills to recognize the difference between principal diagnosis and clinical principal diagnosis. They must also know when to ask more questions, and how to construct a good query. The following is an interesting case study on these challenges.
Myocardial Infarction vs. Acute Coronary Syndrome
A patient is admitted to the hospital with chest pain, determined after the patient's workup to be caused by a myocardial infarction with coronary artery disease.
The initial clinical impression of the emergency room physician (after evaluation in the ER) is that of unstable angina.
The attending physician—in his progress notes and discharge summary—uses the clinical documentation of "Acute Coronary Syndrome with coronary artery disease and unstable angina," believing that Acute Coronary Syndrome is synonymous with Acute Myocardial Infarction.
In reality, Acute Coronary Syndrome—in ICD-9 classification—equates to a significantly less severe diagnosis of unstable angina.
This example illustrates the disconnect between the common clinical language of physicians and the economic language imposed by ICD-9.
In this particular instance, by using the terms Myocardial Infarction and Acute Coronary Syndrome interchangeably, the result is the coding and reporting of a diagnosis that is 48% less severe from a DRG relative weight standpoint.
In addition to negatively affecting a hospital's bottom line, such inaccurate coding and reporting of clinical principal diagnosis may increase the probability of RAC record review and adverse determination of improper payment on the basis of medical necessity—wrong setting.
Medical necessity
Many hospitals utilize McKesson Interqual Level of Care, Milliman Care Guidelines or other professional standards to assist in making billing interpretations as they relate to inpatient versus outpatient observation determination. The challenge hospitals face in their case management/utilization review medical necessity operational process is that the RACs do not adhere to or follow any of these commercially published screening criteria in their medical necessity determination decisions. In the view of the RAC, these criteria are intended merely as screening guidelines, are not dispositive on the issue of the existence of medical necessity with respect to any particular claim, and do not eliminate the need to utilize independent clinical judgment when reviewing claims. Further, these criteria reflect clinical interpretations and analyses, and cannot alone provide the sole basis for definitive decisions.
A common misconception is that adherence to commercially published clinical screening criteria in the assignment of patient designation reduces the financial exposure to RACs for adverse medical necessity determinations as part of the record review process. This opinion couldn't be further from the truth. Frankly, following and adhering to medical necessity screening criteria only provides structure, regimen, and reliability to the patient designation determination process. What is missing from the equation is:
Explicit medical record documentation outlining the physician's clinical judgment, medical decision making, and other factors he or she incorporated into the clinical decision to admit the patient as an inpatient versus outpatient;
Salient points including patient risk of untoward outcomes, clinical uncertainty and unpredictability; and
Established patient clinical risk factors contributing to increased levels of risk of morbidity and mortality.
Ultimately, the clinical documentation must depict an effective, concise and clear picture of the patient's acuity of illness, potential for untoward outcome, and established plan of care as evidence of medical necessity. Hospitals should consider this to be the standard of clinical documentation. Failure to adhere to this standard will undoubtedly contribute to unnecessary, self-inflicted RAC and other third-party payer medical necessity denials.
Next step
Inaccurate coding and lack of medical necessity accounted for the vast majority of improper Medicare payments identified by the RACs during the demonstration project. For this reason, it is imperative that—as a part of RAC preparation initiatives—hospitals determine baseline clinical coding accuracy rates and implement clinical documentation improvement programs as a first step toward improving clinical coding accuracy. Secondly, it is imperative that hospitals conduct an assessment of their clinical documentation practices as they relate to the demonstration of medical necessity. To this end, the hospital will be on its way to reducing financial exposure to RAC record reviews and increasing the probability of overturning RAC denials through an effective appeals process.
Glenn Krauss is a senior chargemaster and coding consultant at Quorum Health Resources, LLC in Brentwood, TN. He may be reached at glenn_krauss@qhr.com.For information on how you can contribute to HealthLeaders Media online, please read our Editorial Guidelines.
Abrazo Health Care has tapped Jo Adkins as chief executive officer for West Valley Hospital. She replaces Phil Gustafson, who has left to become president/CEO of St. Mary's Good Samaritan Inc. and system vice president for SSM Health Care in Illinois.
Calais (ME) Regional Hospital's board of directors has announced that Michael K. Lally has been named the hospital's new CEO. CRH has been under the direction of Harrell Connelly, interim CEO, since April. Lally will take over Jan. 5.
Texas hospital administrator Howard Ainsley has been named the new chief executive of the Hawaii Health Systems Corp.'s East Hawaii region and the Hilo Medical Center. He replaces Ronald Schurra who retired Dec. 1.
Julie L. Quirin, president and chief executive officer of St. Luke's South hospital in Overland Park, has been named CEO of St. Luke's Hospital, effective Dec. 22. Quirin will fill the role now held by G. Richard Hastings, who since 1999 has served in a dual role as CEO of St. Luke's Hospital and the St. Luke's Health System. Quirin will report to Hastings, who will continue as CEO of the system. A search has been started for Quirin's replacement at St. Luke's South.
Kerry Swanson, COO at Alliance (OH) Community Hospital, has been named president of St. Mary's Janesville Hospital. Swanson will oversee the construction, opening, and ongoing operations of the new 50-bed St. Mary's Janesville Hospital, which is set to open in 2010. She will begin her duties on Jan. 4.
