Burda: Marty, you mentioned revenue-cycle management. Could you tell us some of the things you're doing on that issue and debt collection and billing?
Bonick: We've really had to ramp up our revenue-cycle efforts, everything from our coding efforts in terms of making sure we're getting the documentation correct going out the door, to what we're doing in the billing office, and making sure our electronic systems are working even to the point of service.
Burda: Michele, how about revenue-cycle management issues?
Molden: The same, and we have two large physician practices, one primary care and one cardiology, and we're working not only on our outpatient practices but kind of all the way through the hospital side to make sure that from the very first patient visit in a doctor's office all the way through their surgery or whatever that we are retooling and tightening down all of our revenue-cycle management practices.
Burda: How about ProMedica?
Oostra: Very similar. Probably the biggest change for us was point of service collections, quite a cultural change not only for patients but our staff being asked to collect co-pays on the front. Some of our staff were hesitant to do that; some of our patients were hesitant to do that; but we have been at it now for about two years, and people are much more accepting. Our staff is much more accepting at doing point of service collection.
Burda: We've heard of hospitals asking patients in the emergency room if they are a nonemergent case to pay upfront if they want treatment. Are any of your systems doing something like that?
Molden: We're doing a better, much better job at screening patients to make sure in fact they are medically emergent, and then we're giving them the option to stay and be seen by a primary-care physician or to receive an immediate referral for the next day, as opposed to staying in the emergency room, recognizing they will have a financial burden if they do.
Burda: Marty, have you guys done something like that?
Bonick: We've debated it, and it's very difficult with the current medical tort reform issues to get the physicians engaged. They want some assurances that they are not going to be held liable, and obviously, we can't give them those assurances. So while we've talked about it, we have yet to get anything going in a meaningful fashion at this point.
Burda: How has the payer mix changes, the effects of the recession and how you're responding to it, how has that affected the overall financial performance of your outpatient operations? Randy, you want to try that one?
Oostra: Just a lot of pressure. Again, when we look at, just look at history, 10 years ago about 60% of our revenue was inpatient, and actually we're almost to 50/50. We're not quite there. Again, when you think about the shift, we already talked about shifting to more government payers. We're seeing a decrease in reimbursements. It's putting a lot more pressure on us. And so from an outpatient standpoint, what has kind of carried us through a lot of years we can't rely on it as much as we had in the past, so we're seeing 10% reductions in revenue from outpatient services.
Burda: Is outpatient care still profitable?
Oostra: Oh, it is profitable. The problem is, is when you look at how we get paid from those payers, Medicare typically pays us around, for outpatient services, about 80% of cost. Medicaid, it's a little better than the inpatient side. They are in the low 70s for us, about 73%. And then when we look at self-pay, we can get into 35%, 40%. So again, when you look at that reimbursement for our costs and we get more shift toward those payers, a lot more pressure on our institutions, on our hospitals, and so again, it's not that it's not profitable, it's just putting much more pressure on all of us.
Burda: Michele, how about at Piedmont?
Molden: Similar and different, similar in the cost pressures that continue, a little bit different in the mix. Piedmont was just approaching a 50, or is just approaching a 50/50 inpatient-to-outpatient mix. There's always been a little bit more inpatient-oriented. Our challenge, of course, is as those procedures shift from inpatient to outpatient and they are paid at a lower rate, at the same time we're having the whole economic downturn. And we're probably about 3%, 3% to 4% off budget in terms of anticipated surgeries, but we're finding that the elective-surgery business is very soft even in what you would consider heavy elective spine surgeries and things like that. And some of it is not just a financial issue. People don't want to be off work. They are much more hesitant to be gone for long periods of time.
Burda: How about at Jewish?
Bonick: It's good to see we're not the only ones, because we see the same things, and to Randy's point, while outpatient services is still probably one of our most profitable service lines, I think masked inside there is the point that you were talking about, Michele, that we're seeing a shift as some of these procedures were being done on an inpatient and reimbursed at a fair dollar amount and now shifted to a lower dollar amount to the outpatient and sort of masking the change in how profitability has shifted. So, it is profitable, but it's at the expense of the inpatient agenda, and we're seeing similar shifts as Randy is seeing in his hospital system.
Burda: If there's a Medicare shortfall, Medicaid shortfall, a self-pay shortfall, yet overall the service line is still profitable, where are you making that money up?
Oostra: Well, welcome to healthcare right now.
Oostra: I think we're all in the same situation. We talk about performance improvement. We talk about driving for quality. We're talking about getting better as an industry, and it's all the things that you would think that anyone would do. Actually for us, for a couple years now we froze capital. We froze FTEs. We froze travel. We're reducing marketing expenses and other expenses. We're taking a harder look at nonessential services than ever before. We're actually closing services that we would like to be in but we can no longer afford, so we have had to make a lot of hard decisions. I think that's just what you'd hear and see across the industry and just we're in the same area.
Burda: Michele, how is Piedmont making up for it?
Molden: Similarly, we've done all of what you would do around the right staffing ratios, been very aggressive around that, just really retooling the organization to become much more organizationally efficient. We have a goal to be one of the top 10 organizations in the country in 10 years, and one of the those metrics is, as much as you want to be high quality, we also have to operate extremely efficiently, and we're not doing that today. We still have a good way to go.
Burda: How about at Jewish, Marty?
Bonick: We're seeing a lot of the same trends that everybody else is seeing and really squeezing everything that we can out of the revenue cycle and making sure that we're collecting every dollar that's owed to us, and at the same time making sure we're good stewards of the expenses that we have in everything from productivity improvements, benefits, changes. We have had some lucrative plans that we've had to migrate into something that's a little bit more market-competitive, which will be interesting to see how that pays off in terms of retention and recruitment. In this economy things seem to be going well, but it's always a challenge to maintain that and then focusing aggressively on the supply cost, the nonlabor activities. And so it's across the board just trying to look at your processes and see, how can we do things differently, how can we do things more streamlined and making sure quality stays in the forefront of all those activities?