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4 Steps to Managing Supply Chain in Labor and Delivery

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by: Karen Wagner Being responsive to the supply needs of a demanding department requires determining who can manage supplies most efficiently and what tools and storage methods can offer the greatest benefits. Here, Texas Children’s Hospital shares four strategies for success. Effectively managing a supply chain is an enormous undertaking for any healthcare organization, but add in the unpredictability of a labor and delivery environment and the challenges multiply. A case in point is the Pavilion for Women at Texas Children’s Hospital, Houston. The 100-bed facility, opened last March, specializes in multiple births and high-risk pregnancies and can accommodate 5,000 births annually. Evidence of the unpredictable environment came one morning last April: One minute, the hospital was quiet; the next, a patient was brought in who gave birth prematurely to sextuplets. According to Rick McFee, Texas Children’s Hospital’s director of supply chain management, being ready for the unexpected is the focus of his department, which also manages supplies for the 555-bed pediatrics hospital and a 24-bed pediatric acute care facility on Houston’s west side. “It’s very difficult to have any kind of consistent supply utilization. You may have three days where you have very low volume activity, and then you may have four days in which you’re really struggling with capacity,” McFee says. “You may have days where supplies are barely used at all; then, you’ll have days where they’ve used everything we’ve got. So we’ve got to be very nimble. We’ve got to be able to respond very quickly.”…

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Choosing the Right Benchmark

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The U.S. stock market rally over the last five-and-a-half years has led to impressive returns across nonprofit investment portfolios. While it is easy to become complacent in a period of outsized returns, fiduciaries must ask themselves two critical questions: • What is the source of these high returns and are they sustainable? • Is recent performance the result of superior asset allocation and manager selection, or simply a rising tide lifting all boats? Importance of Benchmarking Fiduciaries are concerned with growing the assets of their foundation or endowment. Over the last five-and-a-half years, many organizations have seen that goal realized, as the U.S. stock market, international stock markets, global bond markets and real estate have all offered impressive returns. In fact, many organizations have been able to fulfill their spending requirements and still realize substantial appreciation of their portfolio. While it is easy to get comfortable when portfolios continue to grow, fiduciaries should work to ensure that their organization is maximizing opportunities. But how can a nonprofit determine if they are truly maximizing the opportunities in the markets? The answer comes from portfolio performance attribution through relevant benchmarking. Establishing a benchmark is critical for many reasons, the most important of which is understanding the source of performance. For example, an investment portfolio may earn a return of 10% in a given year. A 10% return allows the organization to meet all budgeted spending requirements, keep pace with inflation, and experience real growth. However, over the same period a collection of…

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Open Access: Integrating Urgent Care and Primary Care

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By Christopher Franklin Primary care and urgent care have never been the closest of allies. Concerns about disruptions to care continuity and coordination – not to mention competition – have historically led primary care providers to be tentative about the role of urgent care centers (UCCs) in the care continuum. Yet building a strategic alliance between the two is becoming a necessity as our health needs overwhelm our primary care resources. While population health expectations shift, insurance coverage expands, care delivery models evolve, and the number of available PCPs dwindles, access to primary care services becomes increasingly constrained. At the same time, access to urgent care is ramping up. Since 2008, the number of UCCs has grown from 8,000 to about 9,300 sites across the nation. The expansion of urgent care is more indicative of the growing demand for acute care services than a competitive threat to primary care. Health systems can help ease the burden on PCPs, enhance access to care (particularly non-emergent acute care), and better meet patient demands by integrating UCCs into their primary care networks. The Growth of America’s Aging Population The growth of the country’s aging population is one of the factors restricting the availability of appointments with PCPs. Estimates suggest that 81% of the change in demand for health services from 2010 to 2020 will be the result of aging and population growth. And the over-65 patient population isn’t just growing – they’re also living longer and with an increased prevalence of comorbidities that…

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The Financial Aftermath of a Merger: Identifying Debt Synergies

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By: Ken Gould & Brian Cafarella, Lancaster Pollard Facing increasing financial pressures and a difficult operating environment, more and more rural and community hospitals are seeking to merge or affiliate to gain operating efficiencies. The recent acceleration of consolidations has in part been fueled by the Affordable Care Act (ACA), which has applied downward pressure on reimbursement rates while costs for regulatory compliance and infrastructure continue to increase. A recent report by Kaufman Hall noted that in 2013 there were 98 affiliations/mergers, a 3% increase from 2012 and a 51% increase over 2010. As such, hospital CFOs are keeping very busy evaluating potential merger opportunities. Given the amount of time and due diligence invested in considering potential combinations, one post-merger synergy that must be considered is improving the debt structure of the newly-combined system. Such debt synergies can be defined as cash saving opportunities derived from refinancing, consolidating or restructuring debt post-merger. How to Determine if a Debt Synergy Exists Understanding the financial profile and debt structure of the combined system post-merger should be the first step to determine if debt synergies are available. This is easier said than done. Nonprofit hospitals and health systems have historically been financed with many varieties of debt and structures: fixed or variable interest rates, a range of terms and amortizations, sinking funds or escrows, taxable or tax-exempt structures, derivatives, capital leases and obligated groups among other structures. Since the devil is in the details, a thorough review and understanding of the existing debt…

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Appropriate Level of Care and the 2-Midnight Rule, Where It Stands as of NOW…

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By Edward J. Niewiadomski, MD and Laureen A. Rimmer, RHIA, CPHQ, CHC, BESLER Consulting Effective October 1, 2013, The Centers for Medicare and Medicaid Services (CMS) implemented a new rule, the “2-Midnight Rule” that is intended to clarify which patients are sick enough to be admitted to a hospital by adding “midnight” as a point in time for determining inpatient length of stay and requiring physicians to certify that they have the expectation of care surpassing two midnights. Medicare would then pay inpatient hospital rates. Prior to this rule, CMS outlined observation care as short term and generally would not exceed 24 hours but could be up to 48 hours in rare and exceptional cases. It is important to note that a New Jersey State regulation stipulates a length of stay criteria of less than 24 hours for observation services. The New Jersey Department of Health and Senior Services, N.J.A.C., Title 8, Chapter 43G-32.21 outlines the state standards for observation services and scope which is more stringent than the CMS guidance on observation services. The key elements of the 2-Midnight rule require documentation in the medical record for medical necessity and a presumption of the length of stay. The focus of the documentation requirements for Medicare inpatient admission is as follows: Inpatient admission order at the time of admission by a physician or qualified practitioner licensed by state to admit inpatients and who has admitting privileges; Physician certification of medical necessity includes (before discharge): Inpatient admission order signed/authenticated by the…

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Gawande: Financial Leadership Needed to Improve Quality, Reduce Costs

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Data and leadership by healthcare finance experts will have the biggest effects on improving quality and cost control in the U.S. healthcare system, according to a leading healthcare researcher and quality improvement expert. Atul Gawande, MD, a surgeon at Brigham and Women’s Hospital in Boston and researcher on cost and barriers to quality improvement, told attendees at ANI: the HFMA National Institute this past June that improving the care of and reducing costs for the most expensive patients show the way to improving the overall system. “It’s still all about the sickest; what we do and whether our systems can care for the sickest in our society,” Gawande said about the 5 percent of patients who account for 50 percent of healthcare spending. “That’s how we fix health care.” To improve clinical and financial outcomes for the sickest parts of the population, providers and payers have to change how the healthcare system interacts with those patients. Initiatives, such as one focused on 100 of the highest healthcare users in Camden, N.J., found that teams of providers were needed instead of just one clinician. That initiative found problems were not identified by the many separate providers seeing a patient, such as the asthmatic patient who required repeated hospitalizations because no one ever taught him how to use his inhaler correctly. The same patient also benefited from nontraditional healthcare interventions, such as buying him a vacuum to help clean the air in his home. “For these highest-cost patients we need entirely new…

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How Will Quality Metrics Impact a Hospital’s Credit Rating?

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Which ratings matter most to hospitals? The number of groups evaluating and awarding top grades to health care organizations is growing. Consumers can pick from the government’s web site Medicare Hospital Compare or a handful of assessments from private and nonprofit organizations, such as U.S. News and World Report, Consumer Reports, Truven Health Analytics, and the Joint Commission, among others. Hospital ratings vary widely as each rater uses a different methodology that can provide vastly different results. As the Affordable Care Act’s (ACA) provisions are implemented, quality metrics will become a bigger agenda item in a hospital’s board room. Medicare’s quality incentive program has sent a large signal to other insurers and the health care industry at large with its risk-based contracts to achieve quality and cost targets via incentives, or in some cases, financial penalties. Additionally, both payors and purchasers have stepped up their demand for high-value health care with the start of mandated insurance changes this year. Those agencies and organizations that rate hospital performance are paying particular attention to the sea change and currently are determining how to incorporate quality measurements into their methodologies. Evolving Credit Ratings In the near future, quality measures could impact a hospital’s cost of capital as health care reform focuses on transitioning from a fee-for-service to a fee-for-value model, with hospitals expected to take on risk and deliver measurable quality of care. From a capital markets perspective, the ability to access capital at low rates and competitive terms often depends on the…

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A New Paradigm for Technology

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  The Triple Aim As health care organizations pursue the Triple Aim vision, they need to explore every facet of their care delivery systems. Reliance on technology, the vehicle for reform, requires organizations to take a fresh look at how they view technology assets. This paper briefly explores a new paradigm for technology acquisition and lifecycle management that aligns with improving patient care, reducing health delivery costs, and improving population health. An old strategy in a new environment Historically, most health care organizations viewed technology like an emerging nuisance–with reluctant providers preferring pen and paper. Technology equipment was not regarded with the same esteem as equipment used to deliver direct patient care, nor could a direct line be drawn to the bottom line. Therefore, in many health care organizations, an efficient and cost-effective strategy was never developed to acquire and manage the lifecycle of technology, resulting in costly maintenance and repairs over time. What has changed? HITECH and the PPACA have created an environment where technology is critical in improving patient care, enhancing the patient experience, and reducing health delivery costs. Electronic Health Records (EHR) utilization incentives and penalties are directly tied to an organization’s financial performance. New regulations and new technology require new strategies. While holding on to outdated technology may have been an option in the past, employing this strategy today will hinder performance, competitiveness and the bottom line. What makes this so different? 2014 is a pivotal year in health care: + Decreases in reimbursements + Technology…

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Specialty Insights – An Interview with Spine Trauma Expert, Alex Vaccaro, MD, PhD.

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For those readers not familiar with Dr. Alex Vaccaro, he is the Everrett J. and Marion Gordon Professor of Orthopaedic Surgery and Professor of Neurosurgery at Thomas Jefferson University in Philadelphia, Pennsylvania. He was the recipient of the Leon Wiltse award given for excellence in leadership and clinical research for spine care by the North American Spine Society (NASS) and is the past President of the American Spinal Injury Association and current President of the Association for Collaborative Spine Research. Dr. Vaccaro has over 530 peer reviewed and 195 non-peer reviewed publications. He has published over 300 book chapters and is the editor of over 44 textbooks and co-editor of OKU-Spine I and editor of OKU-8. Dr. Vaccaro is Vice Chairman of the department of Orthopaedic Surgery, Co-Director of the Regional Spinal Cord Injury Center of the Delaware Valley and Co-Director of Spine Surgery and the Spine Fellowship program at Thomas Jefferson University Hospital where he instructs current fellows and residents in the diagnosis and treatment of various spinal problems and disorders. In light of the increase in spinal trauma during the summer months and the rural nature of many areas in Texas, Dr. Alex Vaccaro offered his insights into the types of injuries that occur, the best practices for improved patient outcomes, and trends in spinal care. The main sources of these injuries are sports, automobile, and water injuries. How patients are stabilized and treated can have a significant impact on cost and the provider’s revenue cycle. RR: A…

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