Moving ahead: How Santa Clara Valley Medical Center is navigating financial reality
June 10, 2011
Faced with a $200 million budget deficit, a county-run healthcare center set its sights on retooling its care management system — a relatively small change within the larger organization that produced significant returns.
Like many county-run healthcare organizations, the 574-bed Santa Clara Valley Medical Center (SCVMC) takes "all comers." Self-pay and no-pay. Individuals covered by private insurance and federal programs. SCVMC takes them all in accordance with its commitment to the health of the whole community.
This dedication, however, has come with a steep price tag: SCVMC faces a $200 million budget deficit.
Several years ago, leadership recognized it needed to address this escalating problem and implemented case management software in an attempt to slow the bleed. Staff was excited about the potential offered by the system but, unfortunately, it didn't produce the results desired.
The reason for lackluster performance was straightforward: The solution was set up to group all patients, regardless of situation, financial circumstances or insurance coverage, into a single massive queue. This meant that high-priority cases were dammed up behind those that were less urgent, which created an unmanageable system. At its worst, the system had accumulated a backlog of nearly 1,000 patients, and many of those cases had aged more than a year.
With the recession heating up, self-pay — and no-pay — situations increased, while county funds decreased rapidly. Hoping to trim costs while continuing to serve the community, SCVMC reconfigured the existing case management system to categorize and "pool" patients into separate, rules-based queues that could be dealt with effectively.
A nation-wide problem hits home
There is a multitude of health plan and benefit companies in the United States — these organizations are fragmented and include, among others, Medicaid, Medicare and private insurers offering HMOs, PPOs, high-deductible and consumer-driven health plans. Throw self-pay patients into the mix, and the average healthcare institution is faced with a financial and logistical nightmare because the provider is often left with the burden of sorting payment arrangements.
Without a user-friendly and efficient workflow to handle patients with multiple coverage models — all existing within the unique capitated California environment — care at SCVMC was being provided without appropriate referrals, resulting in claims denials. Likewise, the medical center did not have a protocol in place for self-pay patients, which meant related costs, sometimes for unnecessary services, were adding up.
SCVMC was unable to afford the investment necessary to devote additional full-time staff to the problem. Manually reviewing each case without a prioritization method would require significant labor resources. Instead, leadership at the medical center turned to technology. Expanding use of its existing care management system called Access Express (developed by Health Access Solutions of Foster City, Calif.), SCVMC worked to design a protocol-assigned workflow to handle incoming patients. This system would ensure that referral and pre-authorization requirements were met, and that the best and most suitable care was delivered at the right time.
Small steps toward relief
To make sure its retooling efforts were successful, SCVMC analyzed its financial burden at the onset of the project. Staff scrutinized claims and determined the reasoning behind various denials. Profiles of high-risk patients were developed along with protocol for providing them with quality care, which allowed the health system to control costs. The new procedures were to ensure that patients, such as those seeking services under worker's compensation, received care for which SCVMC could be compensated.
The goal of this step was not to marginalize the care that patients received. Procedures were designed with the utmost concern for an individual's health. Leadership created protocols that would provide the most effective care at the most appropriate point of each patient's care pathway. At the same time, they were designed to reduce duplicate and unnecessary tests, and prompt providers to obtain the proper referrals through the automated system.
Next, staff at SCVMC identified the groups of patients with the greatest financial risk and placed them into a queue with specific rules. For example, patients covered by an HMO are now placed in specific pools requiring that they receive pre-authorization from the payer before they are seen by specialists. Previously, these individuals were routed to a specialist for additional care without required pre-authorization. This meant that SCVMC was forced, many times, to absorb the associated cost for unauthorized services.
Perhaps most importantly, staff was fully trained to operate within the new workflows to manage cases in a timely manner. Any change can be difficult, but when tasked with the need to remedy SCVMC's financial circumstances — and avoid looming personnel cuts — those employees assigned to operate within the procedures were willing to take the reins.
Immediate returns and positive results
There are now multiple pools established for the case management of high-risk patients. In contrast to SCVMC's previous care management process, the new system has created smaller case groupings with no more than 20 patients queued at any particular time, allowing the staff to direct and respond to the cases on a timely basis. The ED, which previously had cases open for more than a year, now sees an average of only six cases open at the end of each day. These, according to system protocol tied to built-in alerts, are not permitted to age more than 24 hours without review.
The full utilization of the care management system has been a relatively small change within the larger organization, but it nevertheless has produced significant returns. The medical center has been very pleased with the flexibility of the system. The technology has given SCVMC the ability to establish HIPAA-compliant, secure communications with network providers and has given staff a valuable tool for establishing referral criteria and tracking authorizations. The medical center has been able to cut waste and improve efficiencies through workflow modifications — and made the lives of its patients, providers and staff members easier. In addition, SCVMC now has access to much-needed trend data surrounding benefits and eligibility tracking.
In the future, SCVMC has plans to expand its use of technology to address other areas of the medical center to further capitalize on the system's care management capabilities. The medical center believes that it will be able to stay agile with the solution, especially as it faces looming health-reform policies and emerging models of care, such as accountable care organizations and the patient-centered medical home — both of which require HIT solutions to run effectively.
Of course, the utilization of SCVMC's case management system has not solved its overarching budget woes, but it has helped dramatically. The health system has avoided the threat of staffing cuts and is on track to meet new stringent financial targets. It is moving ahead in the face of the financial realities of the healthcare industry and succeeding in the administration of quality care along the way.
About the author
Randall D. Frakes is chief executive officer, Pacific Partners Management Services (http://www.ppmsi.com), a full-service management services organization located in Santa Clara County, Calif.
For more information on Access Express by Health Access Solutions: http://www.hasinc.com/.
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