Wow! Pretty drastic accusation, huh? What can be happening to rural hospitals that reaches the level of Scandal? Why would anyone accuse payers of “abusing rural hospitals? That’s pretty harsh, isn’t it? Well, you decide. What would you say if I told you that large-multi-billion dollar companies are intentionally withholding millions of dollars from rural hospitals? And the scandal is that rural hospitals are closing their doors at an alarming rate and are complicit in their own failure! Rural communities are being deprived of local healthcare, and hospitals of their hard-earned revenue while those who make, and keep the most money in the process just keeps turning the screws. There does not seem to be one insurance or managed care company interested in the long-term success of rural hospitals. If they were, their practices would change. Companies like Blue Cross Blue Shield, United Healthcare, Aetna, Cigna and hundreds of others insert a mind-numbing number of complicated, confusing, and intentionally cryptic components into their hospital contracts. But, here’s where we as hospitals are complicit. We sign these contracts—often without an attorney’s review, and then we forget them……… (crickets chirp)
And, every year that goes by the rich, (insurance companies) get richer and the poor, (rural hospitals) get poorer. Now, we do not deny a company the right to earn a fair paycheck, (although few things are fair about how rural hospitals are paid.) But, why should we make it easier for these super-profitable insurance companies to make more money when they already make BILLIONS?
United Healthcare’s Office in Minnesota
Let’s take a quick look at United Healthcare—well known for wringing every available penny out of every hospital with whom they contract. United Healthcare estimated its 2015 revenue at $143 Billion—a $2 Billion increase over last year. In 2014 Stephen J. Hemsley, CEO of United Health Care had accumulated compensation of **$133,955,076. Again, more power to Stephen—but not at the expense of struggling rural hospitals.
At the same time, one hospital system in Mississippi has been fighting for over 5 months with UHC over claims for services rendered for which they were paid $0. Everyone has agreed that the claims should have been paid, but still no action in 5 months. The hospital has been forced to terminate their agreement with UHC. But, I predict they will eventually return with their hat in their hand because UHC is 7% of that hospital’s business. (djournal.com; Oct. 5, 2016)
As I said earlier, we do not begrudge United Healthcare and others like it making money, and lots of it. But, should we as rural hospitals allow these companies to wantonly plunder what little revenue we have remaining so they can fatten up their CEOs and delight their stock holders? I don’t think so! OK, so how are we as rural hospitals going to stop being the victims of these nefarious scoundrels? We must review and re-negotiate our contracts every year. Neglecting these contracts continues to make us victims of their selfishness, and our own complacency—even as many of us hang by our last thread.
Neglected Payer Contracts. When was the last time your payer agreements were reviewed and re-negotiated? For many rural hospitals it may have been years ago. There are many reasons why rural hospitals have not performed this review. First, most hospital CEOs and CFOs sign a payer agreement and never think of it again. Second, they may not be sure how the process works—negotiating managed care contracts was not part of the health care curriculum.
Third, it is tedious and complicated and requires a commitment of time and effort. Finally, administration has many other fires to fight without creating more work for themselves. It is easier for these contracts to remain “out-of-sight and out-of-mind.” We’re earning some revenue—so why create more work. Why stir up another “hornet’s nest?”
You have to stir up the “hornet’s nest.” Every year that passes without a contract re-negotiation, your hospital’s earnings fall further and further behind the hospital “cost of living.” We call it the “cost of surviving!” It’s like “backwards compounding” you’re giving away more and more money every year—compounding the earnings of the insurance companies. There’s really no way to quantify what might have been lost.
It is not unusual to find that an agreement has not been re-negotiated in over ten years. Your hospital may be earning a decade old inpatient rate of $750 per day. If you had been adjusting your agreement annually at the long-term average healthcare inflation rate of *5.41% you would now be paid $1,204 per day—for the same stay. With ever-increasing financial pressures on rural hospitals, now more than ever it is time to maximize your revenue. The insurance companies don’t need more of your money. Stephen J. Hemsley has enough. Re-negotiating your agreements is a great place to start. Stop being a victim. Impact Healthcare Solutions is working to mitigate this problem for rural hospitals.
The Assessment Process
As this is a major part of the revenue cycle, Impact Healthcare Solutions includes this review in the course of our revenue cycle assessment. Recommendations will be made to administration as to the steps to repair your agreements. Here’s where we start:
Ask any hospital CEO or CFO, “what is the biggest day-to-day problem you face?” You will most often hear, “We don’t get paid what we are owed.” The breakdown goes something like this:
Commercial Insurance, “we get about 50% of what we charge, if we’re lucky.”
Medicare, “we get maybe 40% of what we charge.”
Medicaid, “we are lucky if we make anything” And finally,
Self-pay. “Don’t even ask!”
With this being said, it is just that much more important that your hospital is running on all cylinders to make sure that all of the remaining money that you’re entitled to comes out at the other end to your hospital. There are many reasons why the money that your hospital “should” be getting is not making its way to you!
Below are a few reasons:
These in turn can lead to:
The advent of the EMR has caused many more financial problems than it has solved.
If this sounds familiar, maybe you need to look at obtaining outside help in the administration of your Revenue Cycle Management. Companies like ours have built in processes and systems that allow us to address every one of these items consistently and persistently. We believe in this process so much that we work on a contingency basis, so we are incentivized to obtain for your hospital every penny that it is entitled too.
If you’d like to get more of the money you are entitled to, please call us.
The idea of consumer-driven anything, let alone healthcare, is not a new idea. Let’s just say, it’s been around…though probably not in YOUR hospital. So what? In rural hospitals where traditional medicine, and the traditional thinking that goes along with it, reign supreme, why should you do anything differently? I’m glad you asked. Wake up and smell the Pop Tarts. This ain’t 1950. The business of healthcare is changing faster right now than it ever has, and not for the better. You better be changing with, but I see so many hospitals continuing to maintain status quo…”because that’s the way we’ve always done it.” – And that is a great way to shut down your hospital.
Healthcare improves every day, but the healthcare industry under the current model, I believe, has long since peaked in this country. The game has changed. Have you? We must begin by thinking differently. For example…patients are NOT patients. Thinking of them as patients, as you were taught, is a mistake. CONSUMERS, or CUSTOMERS, is more accurate. You better start communicating this to your clinical staff if you haven’t already. And guess what? “PatientSatisfaction” is no longer good enough either. You should be shooting for one of the “E” words: “Patient Excitement,” “Patient Exuberance,” or “Patient Elation.”
Take your healthcare hat off and put on your business hat if you want to have a successful business. You must meet and exceed the demands of consumers if you want to survive in the future of healthcare.
Consumers have two demands:
Consuming services in your hospital is inconvenient because you are too slow, too inaccessible, and too expensive. So, are you doing anything about it? Probably not. You are probably sitting back like every other hospital waiting to see what our government is going to do next to destroy the industry (country). You will inevitably become part of the “system” that will be the next healthcare industry in this country, the government system. DON’T! Here are some tips:
Can your customers Google you? Do you have a website? Are you engaging your patients via social media? Are you giving your customers value above and beyond your competitors? Are you exploring alternative delivery models? Are you exploring alternative payment methods? Are you targeting the consumers that you want consuming services in your hospital and practices? Do you understand how your customers qualify the care being provided at your hospital? (Because our customers use a very different quality rating system than we do.)
Your answers to these questions and others better be yes, because when the game changes, opportunities arise. Opportunities breed new ideas. New ideas become new reality. New reality beats your 1950 model every time. Chances are, you are behind. Catch up! Healthcare is changing with or without you. Change. Stay ahead of the game, the government, and consumer demands…and win.
Gandhi taught that there are seven things that will destroy us. As we study them slowly and carefully, we see in a powerful way how each represents an end being accomplished through an unprincipled or unworthy means.
This is not an exhaustive list and I’m sure you can add many other items. But, if you’ve been looking for real nuts-and-bolts activities to start practicing to become a better leader, these will be a great starting point.
In the last 10 years over 70 rural hospitals have shuttered their doors in the United States. This is tragic news for rural communities—dependent on and deserving of local medical care. Remember, there was a reason for the Hill Burton Act. The thing that bothers me is how many hospitals may have closed their doors with only a half-hearted effort to repair the breech and make one last go of it. Did they do EVERYTHING they could to survive? Were they absolutely sure when they closed the doors?
I am not saying that CEOs, CFOs, and Hospital Boards are not doing their best to bring their hospitals up from the miry bog. It is an unbelievable challenge to do this. And, in fact social media is full of examples of rural hospitals raised from the dead, and they should be congratulated.
But, let’s face it, most hospitals bite the dust because of one thing…they run out of money. The challenges of Medicaid, Medicare, greedy insurance and managed care companies and Obamacare are enough to make you run screaming from the room.
Revenue Cycle Management
Sometimes our human nature, which does not like change, tends to want to go with “business as usual” even when “business as usual” has been losing thousands, sometimes millions of dollars a year. I know this is true because my company often presents new, low-risk, quantifiable options to help hospitals receive more of the money they deserve. But, many of these CEOs, CFOs, and Board Members still say, “No.” Often with no other viable options. That is absolutely their right. But, here is a great hospital leadership strategy: If your hospital has been losing money, you must make a change! It will not get better if we just bug along at the same pace as before. And these changes need to be significant. Sometimes they are painful, but a good leader often has to make painful decisions.
Many rural hospitals have payer contracts that have not been reviewed or re-negotiated in over ten to fifteen years. Would you like to go 15 years in your career with no raise? I don’t think so. But, that is what you are inflicting on your hospital if you are not consistently reviewing and updating payer contracts (and vendor contracts for that matter). You are giving money away. And, think of this—you are a backwards Robin Hood. You are taking from the poor—rural hospitals starving for cash, and giving to the rich—the networks and insurance companies dripping with cash. Stop It! You may say, “I have no idea where to start on this process.” Well, we can help with a full contract assessment for your hospital. We will do as much of it—including fixing the problem—as you want us to.
If you are the CEO, CFO, or a Board member of a hospital that is losing money—it’s time to look at new options. The problem will not fix itself. We at Impact Healthcare Solutions can help you. The first thing we do is conduct a full financial assessment of your hospital. We give you an in-depth written report along with recommendations. It will give you tremendous insight into the operation of your hospital. We’ll also show you step-by-step how we can improve your bottom line. For more on how you can get a larger portion of the money your hospital has earned, and deserves, please complete the information below and return it to us. You can also call me, Kerry Goff at 251-610-7661.
This is the third in a series of articles I am writing on Leadership, aimed primarily at Rural Hospital Leaders, but really these are applicable for anyone. I am continuing to discuss the “Integral Leader.” In the “17 Traits identified in Great Hospital Leaders” I discussed the first two traits, the importance of a leader being fair, honest and open, and the importance of consistent rounding by the leader. Today I’d like to go deeper into #3 of the 17 traits–“Great leaders care more about the success of their organization than their own feelings or ego.”
As the leader of an organization, the number one item at the top of your list must be the success of, or sometimes the survival of the organization you lead. This means that nothing can morally stand in the way of the success of your organization–especially feelings or ego. Let’s look at those individually.
Feelings. A leader often makes decisions that are unpopular. You may have to move a very popular person out of the organization; you may have to discontinue a service line that is popular, but is a money loser; you may have to confront someone whom you like very much about their poor performance; or you may have to make recommendations to your board that are unpopular but necessary. People will talk–and they will criticize.These are all things that I daresay you have already faced if you are a leader. It would often be easier to “go along to get along,” but it is NOT in the best interest of the organization. Let me say that the first time I ever faced real, bald-faced lies about me was when I became the leader of a hospital. For some reason some people have a pre-conceived idea of who you are as the leader. Honestly, this hurt my feelings. But, I had no time to feel sorry for myself. We had other things to do. I had to remember I was not there to make friends. I was there to make the organization successful. That does not mean I did not make friends. I met many of my lifelong, dearest friends at hospitals I have lead. But my primary assignment was to lead the hospital to success. Also, you must always be fair with those who talk about you and spread lies or rumors. That does not mean you cannot confront them, you can. But you must be fair, honest and open.
Ego. A leader with an out of control ego can be a dangerous thing. That does not mean we aren’t sometimes confident and even a little cocky about what our team can accomplish. But we can never take the glory for organizational accomplishments, and we can never blame others for organizational mishaps. Those are our problems.
Finally, “Every problem is a Leadership problem.” Stop and roll that over in your mind for a minute. If one of your staff commits an error, it is your (the leader) error. They report to you and you should have seen it coming. Also, while leaders are to be fair with everyone, leadership is almost never fair to leaders. Often football leaders (head coaches) are fired because of one player making one mistake at an inopportune time. Fair? No! The way it is? Yes!
So, will there ever be a shortage of head football coaches? I don’t think so. Will there ever be a shortage of those willing to take on the rigors of hospital leadership? No. Why? Because we have been offered the opportunity to make a difference in many lives. We have the chance to change culture and lead our hospitals to greatness. Great leadership requires sacrifice–sometimes of our ego and our feelings but leading a hospital out of the red or bringing along new leaders is all worth it. But we must be committed first to the success of our organization.
One of the most important activities of a hospital CEO is Rounding.
In the last issue I wrote about being fair, honest and open. This issue we will look at Leader Rounding.
In my years as a hospital leader, coaching CEOs and managers, there is one thing I have observed in the C-suite of most hospitals. That is hospital leaders sitting in their office. For long periods of time. How do I know this? Whenever I go to a new hospital to work with a CEO, I ask them to give me a tour of the building. It is very easy to tell if a CEO is not a “Rounder.” On the tour you hear comments from the staff, “Hey, what are you doing here?” or “Man, we haven’t seen you in a long time.” Or “When did they let you out of your cage?” An informal estimate on my part is that probably 20% of CEOs and COOs round, while the other 80% hole up waiting for the next attack. Rounding won’t necessarily make you a great leader, but I promise you cannot be a great hospital leader without rounding.
When I first started in healthcare, I did not know what leadership rounding was. I thought only doctors and nurses made “rounds” during the work day. But, what I was doing was MBWA, management by walking around. That’s what it was called in the old days. After I read Quint Studer’s, excellent book, Hardwiring Excellence, I began “rounding.”
Rounding, especially for a CEO is not difficult. Especially in a rural hospital. You can usually walk the whole hospital in less than an hour. Those leaders who round in a larger hospital need to divide it up, visiting different departments each day. And, before I forget, you need to make sure all of your reports are rounding too. It varies by position, but they can figure it out. Below are suggestions on rounding.
Rounding by Department
Arrive early. After you finish your coffee, get out of your office. Devise a department order that will be good for you. Start with clinical departments, but don’t forget the business office and other financial departments. Some CEOs do the tour the same every time. Others vary to keep things fresh. It doesn’t matter, just do it. At least two days per week come in between 6:00am and 6:30am so you can visit with those who are finishing their shift. They will appreciate it. Be friendly. If you are new, introduce yourself and ask people about their family. Tell them something about yourself, ask them what they do. Finally, ask them if they have all the tools to do their jobs. The tool I’ve been asked the most about over the years is the coffee maker. This may not seem very important, but when you’ve been working a twelve-hour shift and it’s 3:00am coffee is a lifeline. It is amazing how much mojo you get when you (personally) bring in a new coffee maker to the department. While I’m on coffee, never make employees kick in for coffee. Hopefully this is not a problem for you at your hospital. But, coming in new to one hospital, I found a money jar by the coffee machine. I immediately put an end to that and provided good coffee for staff to drink all day. Finally, don’t forget to round on physicians early. It may be the only time you can see them in the day. Ask them two questions. “Do you have everything you need?” and “Do you think clinical staff has everything they need?”
As you round you may find people have ideas for improvement, if they do, and it’s OK with their supervisor, put that person on the assignment to see the project through. Do not, under any circumstances, ignore their idea. All ideas from staff are important.
Rounding on Patients & Families
It’s important from time to time to round on patients and families. Do this in conjunction with the Chief Nursing Officer. Patients and families feel like they have received a special visit when hospital leadership stops by. It’s not difficult. Always knock first, go in and you only have to ask one question, “How are we treating you?” The conversation will develop from there. If the answer is positive, ask why and was there anyone who was extra good. If they mention a nurse, physician, tech or housekeeper, ask them for the employee’s name and later write them a nice note. It’s also a great time to build up the talent and attributes of your staff. “I see your nurse is Katy. She is one of our best. She’s been here for over 5 years and people just love the care she provides.” It’s especially good if you can do it in front of Katie.
If the patient or family responds negatively, it is your job to make sure the Chief Nursing Officer got this so that it can be remedied as soon as possible.
Some people think a CEO is over-stepping his/her bounds by rounding on patients. However, if everyone is hitting on all cylinders, and we all care about the safety and comfort of our patients (and their families) and we don’t use it as an excuse to beat up on our people for not doing everything perfect, it helps us find and fix problems before they snowball.
Today we have talked about one of the important traits of a hospital leader, Rounding. It’s important for your staff—they need to see you being involved in the hospital; and it’s important for you because you become involved and find out how your staff is really taking care of the patients. After just a few weeks, you will feel more confident about what is going on. You will have a better handle on your hospital. If you’re not yet rounding, start today. If you already round, maybe you have some ideas that can help. If so, please let me know and I’ll pass them along. Share any ideas you have on rounding. Again, if you have any questions please email them to me and we can talk about it.
My email is: email@example.com. Or call me at 251-610-7661.
Over the next few weeks, I will be writing some reflections on leadership, particularly as it applies to rural hospitals. In my career, I have served as CEO, COO, Director of Operations, Human Resources, Affiliate President, Resource CEO, and now Chief Development Officer with Impact Healthcare Solutions. In some of these positions I have been a follower. In others I have been a leader.
What is a leader? This has been a question I have pondered for most of my career. I have been a student of leadership for the past 20 years. I have been intrigued by leaders like Winston Churchill, Abraham Lincoln, Martin Luther King, Jr., Walt Disney, who excelled when they were called on at very crucial times in their lives and formative times in history. But there are some great new teachers of leadership out there offering new ideas and concepts for leaders. Bill Collins, Quint Studer, Patrick Lencioni, Scott Sinek, Marshall Goldsmith, and Robert K. Greenleaf. I encourage you to read them. The truth is many of us have the seeds of great leadership inside us. What is amazing is just how few great leaders there really are in corporate America. It is simple to be a great leader, but it is not easy.
It is my opinion that in Rural healthcare, there is no need greater than true Integral Leaders. We are all either leaders or followers. Sometimes both. And, I’m sure you know that there are good leaders and bad leaders. But how do you know what good leadership is? As I reflect on the good leaders I have known, the only single trait I find that is common to all good leaders is Integrity. (Some of you may think of other traits, if you do, please send me your comments. I’d love to read them.)
An Integral Leader is simply a leader of Integrity. I see it as the word it relates to–Integration. It means that you have “mixed’ into your life what you know is right and best as the leader of your organization. So what are the traits that must be integrated into your life to be a good leader.
In this issue we will talk about being fair, honest and open. Some years ago I worked for a hospital VP who taught his team to look at how we dealt with our employees. In all our dealings we were to be fair, honest and open.
FAIR. Not only to the individual, but to our patients, our staff and to the organization. It is important that in our decision making we strive to be fair to all.
HONEST. Are we being honest? Have you ever worked for a person who lied? I think we all have. It kills morale by destroying trust in your employees. Sometimes the truth is tough. But if you cannot tell the truth, tell the person or staff you cannot give them an answer at this time.
OPEN. Finally, always be open with all of your staff. It is easier, and they will appreciate your openness. Don’t you appreciate it when someone is open with you?
Here is an example using all three:
One of your department leaders notices a change in the behavior of an employee and suspects something is wrong. As often happens to CEOs, they bring the problem to you. You must decide if the employee should be drug tested. So, you bring the employee in to your office, along with an HR employee. You must be fair, honest and open with the employee so you tell him/her all the circumstances and give him/her a chance to respond. I have explained the concerns we have and tell him/her we are going to require they go for a drug test. They respond in disbelief and deny everything. But you feel it is still necessary to require a drug test. Is it fair to order a drug test on that individual even though you are not quite sure there is a problem? I submit that it IS fair. It is because if the person is, as they contend, not on illicit drugs, they will be cleared. You have been fair, honest and open with the employee. Through their behavior the employee has created a need for a decision—your decision. But in the big picture it probably serves the employee best by testing him/her. What if he/she tests negative? What if he/she was just having a bad day? Well, then I have to apologize to the employee—actually I will be happy to apologize. It’s better for everyone involved if he/she tests negative.
But, what if he/she tests positive? First, you are being more than fair to the employee because you have now discovered a problem that will, if left untreated, keep that person from working in healthcare for the rest of their life. Hopefully, your company has a program to help the employee get treatment.
Of course, it was fair to your patients. No patient should ever have to be taken care of by a person whose judgement is compromised by an illegal substance. It’s also fair to the other staff, because now they do not have to work with and cover for this person that they knew was taking drugs. (They always know.) It is also fair to the organization that this person was tested because there was a great liability if the hospital allowed a person to work who is under the influence of an illicit drug.
In this article we have briefly discussed some traits I believe it takes to be an Integral Leader. An Integral Leader must integrate into his/her life what they know is right and best. We also discussed being Fair, Honest and Open with your employees, patients, families, and organizations. We will look at some other ideas in our coming issues.
If you have questions you would like answered, or have suggestions, please do not hesitate to email your questions to me at firstname.lastname@example.org. Or call me at 251-610-7661.