|(From left to right) Emily Garner, patient care coordinator, Robert Mitchell, emergency services director, and Dan Robinson, chief operating officer, all of Poudre Valley Hospital, review a graph of Lean information. Mitchell and Robinson participated in a Lean team that found ways to improve patient care processes in the emergency departments at PVH and Medical Center of the Rockies.
News pundits claim this is a time of breathless anticipation.
They're talking about the Supreme Court's pending decision on the constitutionality of the Affordable Care Act. The ruling, expected by the end of June and possibly this coming Monday, could transform the landscape of health care.
Regardless of what the chief justices decide, industry changes that underscore the federal law already reflect the coming of the new age of big cuts and revised reimbursement formulas.
While the wait for the Supreme Court decision enters the final days, Poudre Valley Hospital and Medical Center of the Rockies -- like most hospitals in the U.S. -- continue on a course set when congress approved the reform legislation in March 2010. No one is waiting around to see if the law will be revised or struck down.
Stephanie Doughty, University of Colorado Health's chief financial officer in northern Colorado, says the two hospitals, as well as the Colorado Health Medical Group (formerly Poudre Valley Medical Group), embarked on a road more than a year ago to remain successful regardless of what health care reform brings about.
Many variables exist in the reform legislation that could significantly reduce payments.
"Right now, we're trying to focus on a moving target, but we've always known for sure that revenue will decrease," Doughty said. "How far is open to interpretation for now."
Her observations strongly reflect the same views expressed by other experts throughout the health care industry. The concept of a moving target even extends to the start date of new regulations.
Some observers say the year will be 2014. Others believe changes may not occur until 2017. Supreme Court justices may have their own views. And, of course, the presidential election is just around the corner; the election's outcome may result in a whole new scenario for health care reform.
Throughout the industry the one scenario not open to interpretation is the fact that the way of conducting business is changing to include more efficiency, more savings and an improved way of doing things.
The movement is prompted by health care reform, but also, significantly, by the market place. The net outcome is that most hospitals are developing strategies to follow now and in the future.
National news reports show that some hospitals are panicked and look to cut costs by decreasing staff. Other hospitals are desperately searching for ways to eliminate major costs by not investing in new equipment or by focusing on eliminating minor costs -- turning off lights, using less office paper and the like.
The driving force behind many strategies is a part of health care reform that changes the way hospitals are paid for treating patients. Hospitals have traditionally sought out more patients since federal reimbursements generally are determined according to the number of patients.
The incoming model, however, provides for a set payment, a fixed amount, to take care of all patients within a community. "This will require us to be more efficient," Doughty said.
If a patient is treated and then readmitted for the same ailment, then the hospital will receive less money. This means a hospital might ultimately become responsible for how patients conform to treatment plans once they leave the hospital setting.
Many hospitals have been developing strategies to keep the community's population healthy.
"It almost sounds counter-intuitive for hospitals that historically relied on sick patients for revenue to now be searching for opportunities to keep the general population healthy," Doughty says. "If we can develop wellness initiatives that encourage people at certain ages to receive diagnostic tests ---like colonoscopies and mammograms -- then there is more chance that they will be less sick if and when they use our services."
"This could be a win-win situation for patients and a hospital. Disease is caught earlier and a patient receives treatment earlier, and the hospital provides medical intervention before the more expensive stage when a patient is sicker."
Meanwhile, health care reform's call for a high degree of efficiency will result in more standardization of protocols for patient care.
Leaning on Lean
At University of Colorado Health's northern Colorado hospitals, one of the major strategies is to pursue Lean projects that can enhance patient care, standardize processes and protocols, eliminate waste, focus on areas where value is added for patients and the organization, and discover new or overlooked revenue sources.
Dan Robinson, PVH's chief operating officer, experienced the benefits of Lean first-hand as the hospital's emergency department, which reports to him, and MCR's emergency department underwent a Lean project this spring. The goal was to identify wasted efforts -- to become more efficient, that is -- and pinpoint ways that revenue might be enhanced.
"The Lean project identified 18 areas for improvement," Robinson said. "They ranged from moving urgent, non-emergent patients through the ER faster to trimming nursing documentation from 85 to 35 essential questions. That really saves time for the patient, nurses and the rest of the staff."
The Lean project also identified areas where documentation could be made more specific to better indicate a patient's severity. By improving documentation, the organization would receive an additional net payment of $9 million from all revenue sources.
Doug Faus, University of Colorado Health's vice president of process improvement and integration, points to Lean as a wise strategy for approaching the impacts of health care reform. With a variety of new Lean projects scheduled to be undertaken every quarter into the foreseeable future, the opportunity exists for significant improvements to be made on a large scale.
"One of our goals is to make sure the hospital experience has value for the patient, but we also focus on ways for our efforts to have value for the organization by identifying places where we can be more efficient and standardize protocols," he said.
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