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CMS Seeks to Expand Comprehensive Care for Joint Replacement Model to Surgical Hip and Femur Fracture Treatment Episodes

By Alpha Lillstrom Cheng, JD, MA
November 11, 2016

The Centers for Medicare & Medicaid Services (CMS) remains focused on regulations to move away from fee-for-service (FFS) and toward value-based payment systems. The first Comprehensive Care for Joint Replacement (CJR) model was implemented this April. Then on August 2 CMS proposed an expansion of the current CJR bundling provisions for total hip (THA) and knee (TKA) arthroplasty to a model that will include Medicare beneficiaries undergoing surgical hip and femur fractures treatment (SHFFT) episodes.

Create 5 KPIs for Your Practice

By Tannus Quatre, PT, MBA

There are hundreds of metrics you can use to gauge the performance of your practice. From employee production to customer satisfaction, profitability, and more—there’s really no limit to the ways in which you can generate a metric that quantifies your performance.

And therein lies the problem.

Generally speaking, metrics are an important tool used to understand your business and to make decisions about its future. However, without some constraints as to their use, two things will happen.

The first is becoming overwhelmed. Imagine trying to stay focused on 100 metrics, all of equal importance, and all at the same time—maybe you’ve been in this situation before. Beads of sweat start to form just thinking about it. How can you possibly maintain clear, calm focus when attempting to move dozens of dials all at the same time? The simple answer is, you can’t.

The second is paralysis by analysis. When you can’t maintain focus, you can’t make (good) decisions. By trying to focus on everything, you end up not focusing on anything. Paralysis by analysis applies here.

So, while on the one hand we have the brilliance of nearly infinite metric selection at our fingertips, this very characteristic of managing a business can also lead to our downfall. In order to be effective as a manager or owner, we need to focus on what is truly important, and those to whom we delegate decision-making authority must follow our lead.

To do this, I advise that you start with five (or fewer) key performance indicators (KPIs) that you know to be key to your success. Once these are well under control, you are free to add more, but we need to first remove the noise before we can get started.

A KPI is a metric critical to the success of your business. They are not the same for every business, even in like professions such as physical therapy.

As an example, we all know that patient visits are a critical driver of revenue, and as such this is a common area of focus with regard to KPIs. But the measure of visits alone may not be as useful as measuring the drivers of visits (what actually leads to them happening in the first place). This is where KPI focus can vary dramatically from practice to practice.

Here are a few tips to help you determine your five optimal key metrics:

Start at 10,000 feet, then work your way down to 10

At the highest level, ask yourself what one or two metrics are required for your success. This might be something related to revenue or profitability—accurate, but much too general for a useful KPI. Then ask yourself, “What is the driver of this metric?” Repeat the process several times until you narrow down to a useful and manageable metric that can be used as a KPI in your business.

Example: At the 10,000-ft level, my practice needs to have strong revenues. So I ask myself, “What are the drivers of my revenues?” Answer: patient visits. Next I ask, “What are the drivers of patient visits?” Answer: evals. Next, “What are the drivers of evals?” Answer: marketing contact with referral sources.

You can repeat this process as many times as necessary, and stop when you’ve come to a good KPI for your practice.

Now, or later

Narrow down to metrics appropriate for the stage of your business by asking yourself if your KPIs should be focused on the near term (read: survival), or longer term (growth and sustainability). Usually a mix of the two are appropriate; however, there’s little use in focusing on long-term growth KPIs if the business is at risk of failure over the near term.

Do I have the data?

It may seem obvious, but it’s worth stating that the ability to calculate a metric is a prerequisite to using it as a KPI. This can come into play with metrics that require data not made easily available through standard electronic medical record (EMR) and financial systems. Examples may include customer and employee satisfaction data. If you don’t have the data, you’ve got two options: (1) find a way to get it, or (2) focus on a different KPI.

KPIs are critical to the success of your physical therapy practice, but don’t let them overwhelm you.

vantage_TannusQuatre Tannus Quatre, PT, MBA, lives at the intersection of physical therapy and entrepreneurship, spending his time helping physical therapists build and operate successful practices through his company, Vantage Clinical Solutions. He specializes in marketing, finance, and business planning, and authors and speaks regularly for the APTA and PPS. He can be reached at tannus@vantageclinicalsolutions.com.

The Magic Metrics!

By Paul Martin, PT, MPT, CBI, M&AMI

A lot of rehabilitation companies have matured to a point where they are developing and utilizing operations, and even financial budgets. And while you can achieve great results by putting these tools into practice, in our experience the best way to generate a strong bottom line is to have your therapist focused on just a few of the “magic” metrics (in addition to providing great clinical care!). The metrics that we see create the most change in the financial condition of a company (and therefore are considered magical) are

  • Visits per new patient
  • Cash/revenue per visit
  • Units per visit
  • Visits per therapist per hour/day

And while the specific number for each of these metrics will vary from market to market, what we find is that making small positive corrections in these metrics will have a huge impact on your bottom line. In fact, we have seen in larger companies that we work with that positively impacting one or two of these metrics can result in a six-figure increase to their bottom line!

paul_martin Paul Martin, PT, MPT, CBI, M&AMI, president of Martin Healthcare Advisors, is a nationally recognized expert on health care business development and succession planning. As a consultant, mentor, and speaker, Paul assists business owners with building value in their companies. He has authored The Ultimate Success Guide, numerous industry articles, and weekly Friday Morning Moments. He can be reached at pmartin@martinhealthcareadvisors.com.

Defining Value

By Stacy M. Menz, PT, DPT, PCS

When I went to write this letter, and stopped to consider the theme of this issue, “Defining Value,” I realized it was an ideal topic for closing out 2016. We have talked about so many topics throughout this calendar year, and as I look back over each of them, I see the idea of value being a central theme. What does value mean to your customer, to your staff, to your business, to our profession, to you?

I have had many opportunities to look at that very question over the course of this year. My business structure has changed over the years based on how my employees and potential employees are defining value. We have adjusted the focus of our evaluations, treatment approach, and programming based on how our customers are defining value.

I don’t often discuss clinical approach in this venue, but I thought I would share one way we are tying value to our evaluations and treatment. We have implemented the use of the Canadian Occupational Performance Measure, which is an assessment that looks at participation and self assessment of activities/tasks including their importance, performance, and satisfaction with performance. The use of this tool has allowed us to open a dialogue with our patients and families to find out what is important to them. Now rather than hearing that they want their child to stand on one foot for a longer period of time, we discuss that they want their child to be able to get dressed by themselves—and the fact that they can’t stand on one foot easily is limiting that ability. This tool allows us to target our approach to make meaningful changes in the lives of not only our kids but also their families. We are working on the goals that they have defined as valuable to them.

A similar application is with your clinic teams. I am not always the best at taking the time to show my appreciation, despite the fact that I am appreciating my team and their hard work. I found a book called The 5 Languages of Appreciation in the Workplace, and I have been using it as a guide to show my appreciation in ways that my staff define as meaningful and valuable. Before I was doing what I thought they would want, and that turned out to generally be the method that meant the least to them!

How are you determining what value means to your customer, to your staff, to your business, to our profession, and to you? We would love to hear!


Barking Up the Wrong Tree

By Terry C. Brown, PT, DPT

Recently I was traveling by air, which is something I do a lot of as your president. Flying is an experience that has gone from a luxury seat with concierge service to something short of a cattle car minus the electric prods. Nevertheless, this particular trip was greatly improved by a free upgrade to first class. As I settled into my new seat I was amazed that my pelvis did not have to deform when sitting down and my knees were actually free of patellar compression. Feeling quite smug, I began to watch the boarding passengers to determine who would share my row. Surely the way things were going it would be either the Dalai Lama or a Victoria’s Secret model. Lo and behold a middle-aged businessman sat down and I was returned to reality. He introduced himself and settled in as we prepared for takeoff.

“What is it you do?” he asked as we became airborne. I’m not sure about you, but this question always stops me momentarily as I consider the direction I should take. Should I be the “clinical” physical therapist and educate him on what we do, or the “president” and educate him on the value of private practice? As this particular trip was to DC to work on payment reform, I chose the “president” role. “Well, I am a physical therapist and happen to be the president of the Private Practice Section of APTA.” We proceeded to discuss my reason for traveling to DC as I explained payment reform as it related to physical therapy and our efforts to influence the Centers for Medicare & Medicaid (CMS). It was obvious that this gentleman was well versed in what I was talking about by the questions he asked and comments he made.

My turn: “What is it you do, sir?” I asked.

“I’m a health care economist based in DC, working for a think tank,” he replied. Now things got interesting!

We continued to talk, and I extolled the value of physical therapy and the difficulty we have in getting paid for what we do. He asked more questions about what evidence we had that supported our value. I gushed with data from the McMillian study, Low back pain (LBP) data, and the Iowa study, among others. “The issue,” I continued, “is that CMS doesn’t seem to be moved by our data; they just seem interested in cutting the cost of physical therapy without considering the overall cost of health care. Isn’t it obvious that savings would occur with increased utilization of physical therapy?”

Smiling, he replied,” You’re barking up the wrong tree.”

Yes, colleagues, we are working with CMS and doing everything we can to offset cuts to reimbursement and educate them on our value. Unfortunately, my airplane friend is correct; this tree is tall and the odds of our bark being heard are minimal. As we continued to talk, we both agreed that the private payer market is where the impact must be made, as that market is receptive to change and open to initiatives that reduce risk and save downstream costs.

This is the direction in which the Private Practice Section (PPS) board of directors and the Payment Policy Committee are moving, looking at bold initiatives to demonstrate our value proposition to those decision makers in the industry. We realize that payment is a regional concern, and we must package a product that can be driven by you our members with the support of PPS and the versatility to adapt to all markets. Quality tools are already available addressing a Comprehensive Care for Joint Replacement (CJR) Collaboration Agreement as well as a model participating provider contract for private practices. Continuing efforts will bring more valuable tools in the near future. Working together as PPS, we will be a force that communicates our value in today’s health care system.


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