Home Health Profitability, Part II: Control RNs

  1. Home Health Profitability, Part II: Control RNs

    From the editors of SUCCESS In Home Care magazine Apr 29,
    2002

    Last week you discovered the main drivers of home health profitability. This
    week, dig deeper into the data collected by Fazzi Associates, Northampton,
    Mass. and analyzed by SHC.
    For maximum profitability, the most important area to exert tighter controls
    is RN visits -- profitable agencies provide a median of 9 RN visits per
    episode while unprofitable agencies provide 13.
    Home health consultant Bobby Dusek, Dusek CPA Inc., Amarillo, Texas, says
    his most profitable clients have definitely put the pressure on utilization.
    "Labor costs are the primary part of my revenue and expenses -- if I can
    control that, I can be profitable," he notes.
    You should run monthly efficiency reports that show how each nurse is doing
    compared to your visit quotas and other clinical/financial benchmarks, says
    clinical and operations consultant for American Express Tax and Business
    Associates, Timonium, Md. Note average length of visits, caseload changes
    and other factors that affect productivity, Sevast adds. Also, perform team
    conferences to help nurses move toward utilization goals.
    Consultant Pat Laff, Laff Associates Inc., says his top-performing client
    HHAs hold bi-weekly case conferences on all patients -- helping them
    maintain an average of 17 to 21 visits per episode. Case managers review
    care plans and challenge any findings that significantly deviate from the
    agency's standard of care.
    Just be careful to back-up clinically your decisions to trim visits or
    change the clinician you're sending, Sevast adds. Her clients use clinical
    pathways and disease management programs to streamline visit patterns and
    utilization rates.
    Profitable agencies carefully manage not only how many visits they make, but
    also exactly how much it costs them to make each visit. Profitable HHAs
    spend a median of $106 on each nursing visit compared to $112 per nursing
    visit spent by unprofitable agencies.
    Of course, that finding butts up against the reality of the home health
    nursing shortage. But our experts say you don't have to cut salaries to
    reduce your cost per visit. You can try pushing for improved productivity --
    even if it's only a half-visit per day on average, Sevast notes.
    One particular profitability drain on the nursing front is paperwork.
    Fazzi's study shows that nurses at the most profitable agencies ($300 or
    more per episode), spent only 25 minutes per visit on paperwork. Nurses at
    unprofitable agencies, on the other hand, spent an average of 33 minutes on
    the same task. The solution may be specialized assessment nurses,
    point-of-care automation or better training for your clinicians -- all of
    which have worked for Boyd's top-performing clients.
    But if you're among the 22% of HHAs who aren't profitable now -- or you
    discover your profits are shrinking in the future -- you may have to
    re-evaluate your nursing staff, Dusek notes. One of his now-profitable
    clients faced this tough choice a few months ago. After six months of a 4%
    net loss each month, the agency performed a top-to-bottom review of
    personnel needs, requiring every supervisor to justify every position. It
    ended up getting rid of one office (a branch office that employed 9 RNs to
    care for 12 patients), cut a few clerical workers and a few supervisors, and
    nearly doubled the number of patient cases managed by each nurse. "Over the
    years, the ratio had crept down to 14 [patients per nurse]," Dusek admits.
    Now the agency requires nurses to carry a 25-patient load, and it's back in
    the black with a few percentage-point profit.
    Other ways to reduce visit costs: Consider telemedicine. One major study
    funded by the Dept. of Commerce and run by the VNA of Philadelphia found
    that telemedicine saved $697 per episode on treatment of diabetic patients.
    Or you can try a more low-tech approach -- move to geographic teams to help
    nurses travel less. Profitable agency nurses go an average of 11.8 miles and
    are on the road about 19 minutes for each visit. Nurses at unprofitable
    agencies travel an average of 12.4 miles and spend nearly 24 minutes to get
    to each visit, according to Fazzi data.
    The story is much the same on the supply side. Profitable agencies spend
    only $37 per episode on patient supplies, while unprofitable agencies spend
    more than $39 -- a $2 per episode difference that adds up.
    And don't forget your administrative overhead, say our experts. In Fazzi's
    data, profitable agencies only need an average of 3.5 administrative workers
    to handle every 100 patients (see box, p. 10). Unprofitable agencies, on the
    other hand, have higher admin costs, with 4.4 administrative staffers for
    every 100 patients on their census.
    One solution for administrative staffing woes: Automation. Alacare Inc.,
    Birmingham, Ala., has managed to reduce its data entry and support staff by
    several positions by implementing an electronic patient record, says CEO
    John Beard. Now billers just download charts and don't need extra help
    chasing down notes, forms, etc.
    Editor's note: Look for more on how assessments can affect your profits,
    next week.
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  2. 1 Comments

  3. by   hoolahan
    I read this article on my home health yesterday, and I have to say, the headline serioulsy rubbed me the WRONG way!!! God Forbid a nurse should only have 14 pt's in her caseload!! There is a HUGE difference between having even 20 versus 25. We are only supposed to have 25, I now have 30, and I have only 2 sure bets for d/c next week, with 3 other potential d/c's. Which will bring me to 25, and of course there's always the cases who come out of the hospital who I will have to resume. I have 1 pt I know well, and 1 I haven't met yet in the hospital. I'm telling you, my head is spinning!! My really sick chronic pt's go back and forth to the hospital like a revolving door. I have one poor man with sickle cell who's lived to 62, even tho they said he'd never see 35. I am afraid his time is drawing near, b/c he's in and out q week for transfusions, very unstable. The paperwork is so much worse with PPS, we need less pt's in our caseload to keep our heads above water. 25 should be the absolute max!! Not one pt more! And 3.5 admin workers per 100 pt's?? I'm not so sure about that. Does that mean supervisors and secretaries? Some valid points, like the 9 nurses for 12 pt's?? That would never happen at my agency!! LOL

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