A Better Outcome
Using outcomes to help improve your bottom line.
By Al Amato, PT, MBA
Rehabilitation providers continually struggle to make ends meet. They are required to collect outcomes data to satisfy Centers for Medicare & Medicaid (CMS) reporting requirements for Functional Limitation Reporting and Physician Quality Reporting System, and other payer reporting demands. At first, this requirement seemed to be another cost with little benefit to the provider. Now providers are using outcomes reports to track patient progress in addition to fulfilling mandated reporting requirements. Using outcomes in daily practice has become a necessity for payment and a boon to improving patient management with patient-reported data.
Besides using patient-reported outcomes for compliance and to measure patient functional change, this information can be repurposed to help improve your bottom line. Outcomes data collection processes used this way can be thought of as an investment that produces a return for work you have already done. How you collect, organize, and store outcomes data results in direct costs in staff time and other facility resources, or you may opt to purchase an outcome management system. The question is: How do I turn that cost into an income-producing opportunity, and therefore make the outcomes management process pay for itself?
As a manager of a rehab facility one of your priorities is staff productivity: You want to fill all scheduling slots, have a steady stream of referrals, a referral base, and to expand the number of referrers to your facility. You want to turn each patient into a practice promoter, and you want information to use for negotiating with payers. Using outcomes data—packaged in the appropriate way to address each need or audience important to your facility—will enhance your bottom line and therefore become a positive return on investment (ROI).
In order to repackage outcomes data into marketing materials, you need to take a few steps. First, staff productivity is dependent on enough referrals to the facility so managing the no show/cancellation rate is critical to maintaining high productivity. The industry standard for a no show/cancellation rate is about 15 percent. If each visit represents about $80 in revenue, each incremental decrease in the percentage of your no show/cancellation rate means increased revenue.
My experience using an outcomes report as a patient communication/engagement tool to help set patient expectations for number of visits and expected functional change resulted in an improved no show/cancellation rate from 11 to 6 percent. This easily paid for my staff time and expense for the outcomes measurement system used in my clinic. Continued use of the outcomes status (interim) reports reinforced good patient communication and resulted in nearly 100 percent patient satisfaction. This turned patients into practice promoters, which resulted in increased word-of-mouth referrals to our practice.
Organizing specific physician marketing reports, either with increased staff time and effort or using an outcomes system that produces such reports made marketing calls to existing referral sources very productive and demonstrated my clinic outcomes compared with a risk-adjusted similar patient population. It highlighted our better outcomes as more efficient and effective and with high patient satisfaction. This gave my current referral sources more reason to continue to refer to us. Using similar reports allowed me to show my outcomes to new referral sources and helped differentiate my services from my local competitors. It was also helpful to point out that the reports were generated from an independent third party, not produced “in house.” This added more credibility to the discussion. Using an approximate value of each referral as $800, simply getting one new referral or adding one new referral source to our office easily paid for the cost of the outcome system I used for the entire year! In these scenarios, the ROI was almost immediate and became an important tool for increased profitability due to increased productivity and increased referrals to our clinic.
Using risk-adjusted, third-party outcomes data to justify inclusion in payer networks, as a selling point for improved rates, or as the new paradigm for participating in a pay-for-performance reimbursement system will be essential for the future. To be included in bundled payment, accountable care, and other CMS programs in place now or coming in the near future, you need risk-adjusted outcomes to be able to fairly compare your services to alternatives in the market. If CMS does implement Merit Incentive Payment Systems (MIPS) in 2019 and applies those rules to rehab soon after, your reimbursement will be dependent on your outcomes. It seems obvious to me as a user of outcomes for many years that the only way a provider will function successfully in such an environment is to start now to learn how to manage patients and the practice with outcomes. The ROI application here is more of a survival mode requirement.
Many of our operating costs are going up, especially staff salaries, supplies, and utilities. It is hard to justify the added expense that proper implementation of an internal outcome process or a purchased outcome management system requires until you realize that it can become a source of increased profitability and an efficient tool to measure quality of care, manage your practice and staff, and market your services.
Alfonso L. Amato, PT, MBA, has more than 40 years’ experience as a physical therapist. He serves as the president of Foto, which measures outcomes in rehabilitation, in Knoxville, Tennessee. He can be reached at alamato@fotoinc.com.