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Managing under managed care: winning strategies.

As managed care contracts grow in number and complexity, financial managers must develop strategies to manage and control them. Managers must gain the cooperation of the medical staff, improve financial controls and forecasting, develop an effective information system, improve case-mix management, and measure and control productivity in the hospital to truly manage managed care. This article is the first of a six-part special report on managing managed care. The strategies presented in this series will illustrate how hospitals are successfully, and sometimes unsuccessfully, dealing with the problems and challenges of managed care.

Delivery of Health Care↗

A baseline survey of the Primary Healthcare system in south eastern Nigeria.

A baseline survey to audit the PHC operations and determine community perception and expectations of PHC service delivery was conducted in 72 communities in Enugu state, southeastern Nigeria. The study was intended to facilitate the development of intermediate performance indicators for monitoring the progress of an ongoing health sector reform and to gather baseline data for planning and policy formulation. The tools used for the operations audit assessed indicators for evaluating: (a) Stewardship, (b) Service Provision and (c) Administrative and financial management; while the community survey was assessed by, (a) utilization of health services, (b) perception of service delivery and (c) health care financing. One hundred and sixteen respondents from each of the facilities in the sample frame were interviewed using a structured self-assessment questionnaire and a qualitative assessment was undertaken in 53 of the facilities using an audit guide. Focus group discussions (FGD) were conducted with the policy makers and planners in each of the 17 LGAs in the state. A total of 832 respondents were interviewed in the communities (using a structured questionnaire) and 42 community FGDs were conducted. The results indicate a lack of operational efficiency in the majority of the facilities audited. It was also observed that majority of the facilities do not provide all services required of it, are poorly maintained, do not have enough skilled health workers and operate without a budget. There appears to be no formal financial management system in place and no policy on financial resource generation. The community survey identified two major problems; low utilization of PHCs and poor service provision. The key indicator identified by the community for evaluating performance of the PHCs remains "access to essential drugs". The major prospect was the willingness of an appreciable number of respondents to invest in health financing through insurance schemes and payment of health tax among others. It was evident that poor funding, bad management practices and infrastructural decay is the bane of efficient PHC delivery. Consequently, we propose that cost determination studies, to establish the financial implication of the minimum package for provision of primary healthcare services, should be an essential prerequisite to the reform process. Some critical cross-cutting issues identified from the data obtained which could form the basis for major policy thrust include, development of strategies for sustainable promotion of public-private-partnership for enhanced community involvement in healthcare management, ensuring that interventional investment is proportional to the felt health needs of the populace and funding of healthcare through equitable integration of user fees/charges.

Attitude to Health↗

Building bridges with clinicians.

Clinical and ancillary staff need and welcome the opportunity to be involved in healthcare financial management. To provide them with the financial tools they need, a group of clinical and nonclinical professionals identified the key components of a curriculum that addressed financial, managerial, and cost accounting, along with training objectives that include understanding cost allocation, trend analysis, and variance analysis.

Allied Health Personnel↗

Comprehensive performance management in the operating room.

A clearly defined method for measuring and analyzing operating room (OR) processes provides a common language for focusing management's attention on areas of variability that can be eliminated. But hospitals must also assess OR performance against multiple financial aid and clinical quality metrics to achieve continuous improvement in patient outcomes and profitability enterprisewide. This project is a collaborative effort by McKesson Information Solutions and the Healthcare Financial Management Association.

Benchmarking↗

Integrated, automated revenue management for managed care contracts.

Faced with increasing managed care penetration and declining net revenue in recent years, healthcare providers increasingly are emphasizing revenue management. To streamline processes and reduce costs in this area, many healthcare providers have implemented or are considering automated contract management systems. When selecting such a system, healthcare financial managers should make certain that the system can interface with both patient-accounting and decision-support systems of the organization. This integration enhances a healthcare provider's financial viability by providing integrated revenue-management capabilities to analyze projected performance of proposed managed care contracts and actual performance of existing contracts.

Accounts Payable and Receivable↗

The high price of technology: factors affecting hip implant costs.

As the cost of new technology for hip implants escalates, financial managers are finding an increasing amount of the DRG payment is spent on the technology itself and not nursing care, maintenance, or overhead. Four factors affect the cost and quality of hip implant prosthetics--the materials, design, fixation, and instrumentation--and must be considered in the cost and quality issues associated with selecting a prosthetic device. Financial managers must be sensitive to quality issues associated with new technological advances in hip implants, and they must be able to communicate the financial impact of this new technology to the physicians who use it and the third-party payers who pay for it.

Ancillary Services, Hospital↗

Achieving excellence in the management of accounts receivable.

Recent changes in healthcare reimbursement rules and practices have made the task of accounts receivable management a particularly demanding one for most financial managers. One multihospital system, after pursuing numerous strategies to reduce its accounts receivable with only marginal levels of success, launched a systemwide initiative to share both the positive and the negative accounts receivable management experiences of each department at each hospital in the system with all patient accounting staff. The objective of the initiative was to use the lessons learned from those experiences to attain excellence in accounts receivable management throughout the system. The ultimate success of the initiative is detailed in the following article.

Accounts Payable and Receivable↗

Long-term neuropsychological outcome and loss of social autonomy after traumatic brain injury.

OBJECTIVE: To assess which social activities were still impaired 5 years after a traumatic brain injury (TBI) in adults, and which neuropsychological impairments were associated with this loss of social autonomy. DESIGN: Cross-sectional study of 79 patients selected from the follow-up cohort of an epidemiologic survey of 2,116 TBI patients. SETTING: The present study was of ambulatory patients seen at hospital or at their homes. The inception cohort was from the trauma center of a university hospital and from a general hospital that is representative of level II trauma centers in Aquitaine, France. PATIENTS: Seventy-nine patients selected from a representative sample of 407 patients who were included in the 5-year follow-up study of the initial cohort (convenience sample). MAIN OUTCOME MEASURES: Glasgow Outcome Scale (GOS) and loss of social autonomy as assessed by the European Brain Injury Society's European Head Injury Evaluation Chart; assessment of neurobehavioral impairments by means of the Neurobehavioral Rating Scale-Revised. RESULTS: Up to 16 patients suffered disability for at least one social skill because of cognitive/behavioral reasons. Seven needed full-time supervision. Performing administrative tasks and financial management, writing letters and calculating, driving, planning the week, and using public transport were the most impaired social abilities. Loss of social autonomy was mainly observed in severely injured patients. Univariate analysis showed that mental fatigability, motor slowing, memory difficulties, and disorders of executive function were associated with low scores on the GOS, unemployment, and difficulties in shopping, using public transport, and performing financial management and administrative tasks. CONCLUSION: Persistent impairments of executive functions and speed of psychomotor processing are major factors associated with loss of social autonomy and inability to return to work long after TBI in adults. Improving these impairments in concrete social situations represents a major challenge for cognitive rehabilitation.

Activities of Daily Living↗

EIS (executive information systems): a better way to view hospital trends.

Executive information systems (EIS) are changing the way managers and executives view information. EIS is a work-station based information system that integrates information from the important parts of a healthcare organization to give executives a high-level perspective on key performance indicators and trends affecting their institutions. Such systems employ graphics and color to display real-time data in a format that is easily interpreted by executives and that helps them make better decisions. EIS technology is particularly appropriate for disseminating and highlighting financial information. However, for such systems to work effectively and for executives to obtain the greatest benefits from them, financial managers must help establish and promote EIS.

Color↗

Capital equipment budgeting: changing an art to a science.

In today's integrated healthcare environment, one component of financial management remains antiquated in many facilities--the budgeting process for capital equipment. Many institutions budget for capital equipment based upon individual departmental wish lists and hopeful dreams. These highly inefficient practices are being replaced with automated systems that create departmental data exchanges, utilization analyses, life-cycle cost justifications and enterprise-wide budget roll-ups. This article shows how automated capital budgeting systems help reduce capital spending by identifying utilization trends, providing for demand matching, and maintaining cost control data which enable the financial manager or asset steward to analyze and justify appropriate acquisitions.

Budgets↗

Optimizing management and financial performance of the teaching ambulatory care clinic.

OBJECTIVE: To examine how to optimize teaching ambulatory care clinics performance with regard to access to care, access to teaching, and financial viability. DESIGN: Optimization analysis using computer simulation. METHODS: A discrete-event simulation model of the teaching ambulatory clinic setting was developed. This method captures flow time, waiting time, competition for resources, and the interdependency of events, providing insight into system dynamics. Sensitivity analyses were performed on staffing levels, room availability, patient characteristics such as "new" versus "established" status, and clinical complexity and pertinent probabilities. MAIN RESULTS: In the base-case, 4 trainees:preceptor, patient flow time (registration to check out) was 148 minutes (SD 5), wait time was 20.6 minutes (SD 4.4), the wait for precepting was 6.2 minutes (SD 1.2), and average daily net clinic income was $1,413. Utilization rates were preceptors (59%), trainees (61%), medical assistants (64%), and room (68%). Flow time and the wait times remained relatively constant for strategies with trainee:preceptor ratios <4:1 but increased with number of trainees steadily thereafter. Maximum revenue occurred with 3 preceptors and 5 trainees per preceptor. The model was relatively insensitive to the proportion of patients presenting who were new, and relatively sensitive to average evaluation and management (E/M) level. Flow and wait times rose on average by 0.05 minutes and 0.01 minutes per percent new patient, respectively. For each increase in average E/M level, flow time increased 8.4 minutes, wait time 1.2 minutes, wait for precepting 0.8 minutes, and net income increased by $490. CONCLUSION: Teaching ambulatory care clinics appear to operate optimally, minimizing flow time and waiting time while maximizing revenue, with trainee-to-preceptor ratios between 3 and 7 to 1.

Ambulatory Care↗

A survey of management tasks completed by clinical dietitians in the practice setting.

OBJECTIVE: To investigate clinical dietitians' involvement in completing management tasks in a practice setting. DESIGN: A random sample of 1,599 self-designated clinical dietitians was selected to receive the survey. The survey instrument consisted of 54 management tasks divided into four management categories: personnel, materials, financial, and organizations. For each task, the respondent was to indicate frequency of task completion and setting that contributed the most in providing competency for task completion. STATISTICAL ANALYSIS: A 38% response rate was achieved and 526 surveys were submitted for data analysis. Responses for number of respondents completing each task, frequency of task completion, and training setting were generated for position title, number of years as a registered dietitian, number of employees supervised, and size of hospital. chi 2 Analysis was used to determine degree of association among variables. RESULTS: Every task listed on the survey was completed by at least some of the respondents. Financial management tasks had the lowest incidence of response. Clinical dietitians were found to be assuming management responsibilities to varying degrees in the practice setting; 50% or more of the respondents performed tasks in the personnel area. The position title of the dietitian influenced which tasks were completed in the practice setting but was independent of frequency of task completion. Work experience was the setting that contributed the most to attaining skills needed for task completion. CONCLUSIONS: Management is a viable component of clinical dietitians' responsibility. Knowledge of activities and requirements of the workplace is essential if dietitians are to be competitive in the professional job market. With the current drive for cost-effective, quality patient care, clinical dietitians will be expected to have competent management skills.

Dietetics↗

Economics of immunization information systems in the United States: assessing costs and efficiency.

BACKGROUND: One of the United States' national health objectives for 2010 is that 95% of children aged <6 years participate in fully operational population-based immunization information systems (IIS). Despite important progress, child participation in most IIS has increased slowly, in part due to limited economic knowledge about IIS operations. Should IIS need further improvement, characterizing costs and identifying factors that affect IIS efficiency become crucial. METHODS: Data were collected from a national sampling frame of the 56 states/cities that received federal immunization grants under U.S. Public Health Service Act 317b and completed the federal 1999 Immunization Registry Annual Report. The sampling frame was stratified by IIS functional status, children's enrollment in the IIS, and whether the IIS had been developed as an independent system or was integrated into a larger system. These sites self-reported IIS developmental and operational program costs for calendar years 1998-2002 using a standardized data collection tool and underwent on-site interviews to verify reported data with information from the state/city financial management system and other financial records. A parametric cost-per-patient-record (CPR) model was estimated. The model assessed the impact of labor and non-labor resources used in development and operations tasks, as well as the impact of information technology, local providers' participation and compliance with federal IIS performance standards (e.g., ensuring the confidentiality and security of information, ensure timely vaccination data at the time of patient encounter, and produce official immunization records). Given the number of records minimizing CPR, the additional amount of resources needed to meet national health goals for the year 2010 was also calculated. RESULTS: Estimated CPR was as high as $10.30 and as low as $0.09 in operating IIS. About 20% of IIS had between 2.9 to 3.2 million records and showed CPR estimates of $0.09. Overall, CPR was highly sensitive to local providers' participation. To achieve the 2010 goals, additional aggregated costs were estimated to be $75.6 million nationwide. CONCLUSION: Efficiently increasing the number of records in IIS would require additional resources and careful consideration of various strategies to minimize CPR, such as boosting providers' participation.

Journal Article↗

Teamwork leads to better operating room management.

Because the diversity of staff members who work in hospital operating rooms (ORs) can cause conflicts and lead to inefficiencies, a team approach must be used to ensure better management of resources. Administrators, financial managers, and materials managers can join with OR personnel to improve scheduling, reduce time spent preparing and cleaning ORs, and better handle human resources. In the long run, reviewing OR demands and resources controls costs and improves the delivery of care.

Appointments and Schedules↗