How Providers Survive in a Cost Cutting Environment Don Holloway, Ph.D. Co-founder of NIATx [email protected]
Dec 14, 2015
How Providers Survive in a Cost Cutting Environment
Don Holloway, Ph.D.Co-founder of [email protected]
How Providers Survive in a Revenue Cutting Environment
Don Holloway, Ph.D.Co-founder of [email protected]
Better Title
Story: Mason City, IowaMason City Iowa The outpatient program at Prairie Ridge Addiction Treatment Services increased its outpatient revenue by $381,000 per year.
Historically, the agency received 60% of its outpatient revenue through a block grant capped at 1,100 clients. The agency averaged 42% over-utilization of block grant funds for 5 years, resulting in up to $462,000 of annual unreimbursed care for 540 clients.
After joining NIATx, the program focused on increasing the other 40% of revenue, (third party, Medicaid, and client fees). Within 2 years, it increased this revenue from $627,000 per year to $1,008,000, an increase of $381,000 per year. The block grant is now 48% of outpatient revenue, down from 60%.
Prairie Ridge’s Problem
540 clients served without payment of $462,000 Would require a 58% cut in cost to break even, from $855 to $356 per client
What would you do?Renegotiate contract? Reduce costs? Turn clients away? Make clients wait longer? Terminate contract for block grant? Change payer mix? “Cost-shift”?
Summary
PayerReferrer
Client
ProviderReduce Costs
Increase Revenue
What’s it like to be our client?Referral
!st Treatment Session
1st Contact
Assessment
Start Next Level of Care
4th Treatment Session
End This Level of Care
Reduce No-shows
Reduce Waiting Time
Increase Admissions
Increase Continuation Within One Level
Increase Continuation Between - Transition
NIATx Aims
Increase Any Admissions?Referral
!st Treatment Session
1st Contact
Assessment
Start Next Level
4th Treatment Session
End This Level of Care
Reduce No-shows
Reduce Waiting Time
Increase Admissions
Increase Continuation Within One Level
Increase Continuation Between Levels - Transition
Any Admissions?
NIATx Aims
Typical Payer-Provider-Referrer Relationship
PayerReferrer
Client
Provider
Strengthen The Payer-Provider-Referrer Relationship
PayerReferrer
Client
Provider
What’s it Like to Pay Us?
PayerReferrer
Client
Provider
Women’s AdultWomen with ChildrenBattered WomenMen’s Adult
Boy’s AdolescentGirl’s AdolescentParentsVeteransElderDual DiagnosisDepressionHIVProfessional: Pilots, Drs, Rns, Clergy
What’s it Like to Pay Us?
PayerReferrer
Client
Provider
Are we paid enough?FFS No CapFFS with Cap
Annual BudgetFee per Client per YearNo Contract/Source
Utilization Controls:Limit to 10 visitsPrior authorization
What’s it Like to Refer to Us?
PayerReferrer
Client
Provider
Referrals that startclients in addictiontreatment are made by:selfparentsfamily and friendsemployersUnionsschoolsyour staffother health care providerschild protection servicesjudges, lawyers, and probation officers
What’s it Like to Refer to Us?
PayerReferrer
Client
Provider
Transitions fromthe end of one levelof care to the start ofanother are made by:detoxresidentialinpatientpartial hospitalizationintensive outpatientoutpatient
Aim: Become Preferred Provider for Selected Referrers
PayerReferrer
Client
PreferredProvider
1. Identify Referrers2. Invite One Referrer to Join You3. Form a Joint Change Team4. Invite Referrer to Participate in a Walk
Through5. Agree on Aims6. Establish Baseline Data7. Identify Barriers and Opportunities8. Test Promising Practices9. Sustain Improvements10. Invite Another Referrer to Join You and
Repeat
How will we know we’re preferred?
PayerReferrer
Client
PreferredProvider
• # of referrals will increase• % of referrals admitted will increase• % of revenue from selected payers will increase
What changes can we test?Tailor brochure for referrertoo many referrers do not have written materials with directions and guidance for clients to use to contact addiction treatment
Assign each referrer one person to contact for all their referralstoo few referrals are made, and when they are, too few end in admission
Guide referrers to make appropriate referralstoo many referrers do not know when or how to make a referral
Encourage referrers to make 1st appointment while referrals are still in their officetoo many clients are not ready, willing or able to make initial contact or appointment on their own
Continue on next slide . . .
What changes can we test?Continued . . .
Acknowledge all referralsreferrers need to be reminded about your services – one way is to send a thank you note
Keep them informed about “their” clientto the extent confidentiality is not broken
Visit referrers periodically and ask “What’s it like to refer a client to us?”
Stay at top of referrer’s mindyou are easy to forget
Offer specialized services, e.g. elderlyfunding from current payer sources is saturated
How can we sustain our preferred status?
PayerReferrer
Client
Provider
Assign each referrer one person to contact for all their referralsVisit referrers periodically and ask “What’s it like to refer a client to us?
Summary
PayerReferrer
Client
Provider
Selectively contract - change payer mix
Reduce Costs
Selectively strengthen existing relationships and build new ones
Increase Revenue
Reduce Waiting TimeReduce No-showsIncrease Continuation