Critical access hospitals exist to serve the needs of their communities. Specifically, a critical access hospital is designed to reduce the financial vulnerability of rural hospitals and improve access to healthcare by keeping essential services in rural communities.
Yet critical access hospitals are not immune to issues that threaten their existence. Financial struggles, consolidation and turnover in management have all plagued critical access hospitals for years.
The COVID-19 pandemic and ensuing uncertainty has furthered the impact of these issues. In addition, critical access hospitals saw a decrease in patient volume, a swift turn to telehealth services and a shortage of staff. For many rural healthcare facilities, relief funding played a crucial role in keeping them afloat.
As critical access hospitals move forward into the next normal, how can they recuperate and reposition themselves?
Here are a few items to consider.
Give your critical access hospital more certainty during change.
Start with a self-assessment.
Successful rural hospitals are handling change by reinventing themselves and adapting to the wants and needs of their community. But not all hospitals are responding so successfully.
We see versions of the following four scenarios playing out across the country:
Cost containment and cash flow management will be critical for long-term success.
Explore Alternative Payment Models
Perhaps the easiest area for critical access hospitals to enter into new payment models is in the area of value-based and readmission programs.
Value-based models typically hold back a portion of the base payment for services rendered during the payment year. Funds that are held back by the payor are then available for distribution to providers that demonstrate the greatest value. Readmission programs, on the other hand, hold back reimbursement for providers that demonstrate higher than expected readmissions for specifically identified services. Funds that are held back under the readmission programs are retained by the payor and not distributed to any providers.
Providers that are preparing for value-based reimbursement models must first understand the components considered in the definition of value by the payors. Overall, Value = Quality/Cost, but how does the payor define quality and cost? Medicare defines values with four factors:
These factors measure processes, satisfaction, outcomes and cost associated with care rendered by the provider. Providers of all sizes can and should be monitoring these factors within their organization to determine how they measure up today, what opportunities and risks their current status provides and what steps they can and should take to improve their positioning for a value-based reimbursement model.
Readmission rates can also be tracked and compared to national averages to determine future opportunities and risks.
It is important to note that the time to address the factors in value-based and readmission payment models is before the payment model is applied to the facility, since these payment models usually use historical factors to adjust current payment levels.
Utilize your data.
It is time to start leveraging the vast amounts of data your facility has been generating and collecting in your EHR and business-critical systems. Investing in “big data” population health systems will provide:
The advent of better technologies has created a huge opportunity for critical access hospitals to begin to access this information and use it to make better and more informed decisions that impact the organization’s efficiency. This type of data will also enable you to meet patients’ growing demand for more information and better communication up front.
Business Intelligence & Benchmarking
Business Intelligence (BI) offers data pulls that are closer to real-time as well as improved visuals and navigation functionality. To help maximize future revenue, critical access hospitals can conduct an analysis of their operational efficiency and productivity by department.
It is then important to compare this data to other critical access hospitals. Benchmarks create “the mark” that helps you determine how your facility stacks up against local, regional and national peers. Even though benchmarking is not new, and some critical access hospitals have used it to help measure their financial performance, the process of conducting the analysis department-by-department and visually presenting the standard in BI may be new to some organizations.
Measuring productivity by statistical calculation shows where you stand now and helps you set operational goals. These goals, in turn, guide workflow and processes that improve staff efficiency, reduce costs and, when coupled with a holistic viewpoint to patient care, create a better patient experience.
Benchmarks are not just about operational efficiency; they help you put the processes and practices in place that can generate improved patient satisfaction scores—another future determinant of revenue.
When benchmarking, many factors come into play, including:
Benchmarks give you data to work against. Once an organization knows the benchmarks per department, they can start to ask questions: Why are we different than top performers? Is it our volumes? Is it staffing, training, processes, procedures?
Healthcare analytics can be critical to your overall success.
Proactively Address Risk Assessment and Management
Protecting your patients’ information and your reputation are critical to your organization’s future success. In today’s connected world, no industry or business sector is safe; monitoring the effectiveness of your information security program requires ongoing diligence.
Effective approaches require a balanced methodology to manage controls across your organization, including:
Here’s how your internal audit plan can play a role in your security.
Be strategic as you move forward.
Successful rural hospitals are handling change by reinventing themselves and adapting to the wants and needs of their community. It’s a smart time for you to review your operations and the community you serve to make necessary changes to adapt. Spend time strategically planning and understanding your options. Once you have a plan, be ready to adapt to meet the goals of that plan and continually look at your operations from both a revenue generation and cost-efficiency standpoint. Be ready for workforce reductions or a shift in staffing plans as well.
The current market pressures have presented some scenarios that require facilities to consider drastic actions, such as reorganization and bankruptcy. These actions can provide the organization with the necessary time and resources to develop a reorganization plan. Facilities in these situations should be sure to seek out experienced legal counsel familiar with hospitals and reorganization proceedings.
Critical access hospitals stand poised to move forward during a time of uncertainty. But they’ll need good data to help them keep going.