In this issue
Winter Trustee Conference scheduled
for
Jan. 12-14
The
MHA Annual Winter Trustee Conference, themed “Connecting Care and Communities,”
will be held Jan. 12-14 at the Marriott Minneapolis Northwest in Brooklyn Park.
Conference highlights include presentations from health care consultant Karma
Bass; recording artist, physician and champion disabled athlete Dr. Ronan
Tynan; and author and co-star of MTV’s “The Buried Life” Ben Nemtin.
- Karma
Bass will discuss the important role individual leaders at the board and
executive level can play in determining the success or failure of efforts
to partner in the community, whether for population health or increased
market presence.
- Reflecting
on his life and career thus far, Dr. Ronan Tynan will share what it means
to be resilient and identify recurring characteristics that, when faced
with adversity, make bouncing back possible.
- Ben
Nemtin closes our conference with a thought-provoking, funny and moving
inspirational story sharing the goals and dreams of the four Buried Life
guys, which vividly depicts the timeless themes that every generation
faces growing up.
Eight
general sessions and 15 breakout sessions will focus on issues of mental and
behavioral health, finance, patient safety and the future of health care. For
more information or to register, download the conference brochure or
visit the MHA website. The
Marriott sells out quickly so reserve your room online
now.
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Karma Bass to lead annual Training
Camp for Rookies at Winter Trustee Conference
Health care consultant
Karma Bass will lead the annual Training Camp for Rookie Trustees at this
year’s Winter Trustee Conference.
This
extended session, scheduled for Friday, Jan. 12, will help newer trustees:
- Understand
fundamental issues and expectations of health care boards and trustees
- Understand
the challenges of governance in leading through reform
- Learn
about basic board and trustee roles and responsibilities
- Gain
an overview of basic finance and reimbursement
The
session is designed for any trustee who has served less than three years on his
or her hospital board.
The
Winter Trustee Conference is scheduled for Jan. 12-14 at the Marriott
Minneapolis Northwest in Brooklyn Park. Click here for more
information. return to top
New educational videos for board
meetings available on MHA’s website
MHA has developed a
series of board education videos designed as short introductions on specific
health care topics to be shared during hospitals’ board meetings or for
individual use. MHA recently filmed eight new videos. These videos, as well as
previously recorded videos, are available on MHA’s website. Topics and
speakers include:
- What
the Board Should Know to be Ready for Any Investigation
- David Glaser, attorney,
health law group, Fredrikson & Byron, P.A., Minneapolis, MN
- 340B
– Background and Key Compliance Issues
- Renee Gravalin, partner,
health care practice, Eide Bailly LLP, Fargo, ND
- 5
Facts to Know About Donation/5 Questions to Ask About Donation
- Sara McFee, manager of
donor development, Minnesota Lions Eye Bank, Saint Paul, MN
- Cybersecurity
– What Questions Should Management and the Board Be Asking About
Cybersecurity Risks and Controls
- Karen Andersen, manager,
risk advisory services, Eide Bailly LLP, Minneapolis, MN
- The
2017 Legislative Session in Review and 2018 Session Preview
- Mary Krinkie, vice
president, government relations, Minnesota Hospital Association, St. Paul,
MN
- HIPAA
Risk Analysis – Does Your Assessment Adhere to the OCR Guidelines?
- Janice Ahlstrom, FHIMSS,
CPHIMS, CCSFP, RN, BSN, director, Baker Tilly Virchow Krause, LLP,
Minneapolis, MN
- Compensation
for Physician Executive Roles: A Case Study
- Cathy Kibbe, principal
consultant, physician services, Arthur J. Gallagher & Co.,
Minneapolis, MN
- Health
Care Disparities
- Tania Daniels, vice
president, quality and patient safety, Minnesota Hospital Association, St.
Paul, MN
MHA adds additional
videos annually. If you find other topics that you would like MHA to explore,
please contact Peggy Westby, MHA vice president of education
and member services, 651-603-3518.
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Helipad safety: Training and
maintenance
Helipad safety
training video available from Life Link III
Now you can
conveniently provide timely training on safe operations for your staff members
around your hospital helipad. Providing consistent reproducible training in a
24/7 environment can be challenging, especially with the added complexities of
an aircraft landing on your hospital property. Life Link III’s Hospital Helipad
Safety Video provides instructions for staff assigned this responsibility,
whether your facility has a ground or rooftop helipad. To procure a helipad
safety video version specific to your organization, please contact Life Link
III’s safety manager at 1-800-283-4025 or [email protected]. There is no
charge for the video.
The video is available for immediate download at www.lifelinkiii.com.
Winter weather helipad
safety reminders
During the winter weather season, we encourage you to review of your facility’s
helipad snow and ice management plan. Active and robust plans are essential to
the safety of patients, crews and operations.
The most successful plans designate a hospital security or facilities
representative to check the condition of the helipad on a scheduled basis,
especially during times of recent precipitation or high winds, to ensure the
pad is kept clear of contaminants. Slips and falls are a leading cause of
injuries to crews. Flying snow and ice resulting from rotor wash decreases
pilot visibility during a critical phase of flight and can damage the aircraft
and hospital property.
Life Link III recommends following the guidelines set forth from the National
EMS Pilots Association:
- Snow
should be clear of the pad and as much of the surrounding safety area as
practical. Snow that has been removed from the area should be placed far
enough from the helipad as to not become an obstruction hazard to main
rotor or tail rotor systems.
- All
helipad paint and markings should be completely cleared of snow so pilots
can adequately visualize the information presented during landing.
- Avoid
using rock salt (sodium chloride) or sand to remove snow and ice. Despite
the small size, it can become a projectile and cause serious injury. Rock
salt is also extremely corrosive and damaging to helicopters. Use a
product containing urea or other noncorrosive aviation friendly
alternatives.
- Snow
melt systems utilizing steam, heated glycol or electrical heating coils
may be the best course of action for rooftop helipads and are also a
viable option for ground-based helipads.
With other safety‐related questions or concerns, email [email protected]
or contact the Life Link III safety manager at 1-800-283-4025.
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Ten Minnesota trustees receive MHA
board certification
Ten
Minnesota hospital trustees were recognized for completing the MHA board
certification process at the Summer Trustee Conference on Friday, July 14. They
are:
- Carol
Anderson, North Suburban Hospital District, Fridley
- Tom
Anderson, Swift County-Benson Health Services
- Linda
Dietrich, Lakewood Health System, Staples
- Joseph
Fagnano, Granite Falls Health
- Sally
Grove, Lakewood Health System, Staples
- Michelle
Knutson, Ortonville Area Health Services
- Robert
Mueller, Lakewood Health System, Staples
- Brenda
Sather, LifeCare Medical Center, Roseau
- Nathan
Schmidt, Chippewa County-Montevideo Hospital
- Kathy
Sterk, Fairview Range Medical Center, Hibbing
For those interested in becoming certified, information can be found here or on the trustee
section of the MHA website under “Board
Certification.”
You can also check your progress toward certification at any time here or on the trustee
section of the MHA website under “Board
Certification.”
More information about the MHA Advanced Certification Program can be found here. Complete this form to
let MHA know of your intention to complete the advanced board certification process.
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QAPI:
What it means and why it matters
By Elizabeth Winchell,
CHPC, attorney, Nilan Johnson Lewis, Minneapolis, MN
Hospitals have long devoted significant attention and resources to quality, but
evolving regulatory requirements mean hospitals now need a formalized approach
to quality assessment and performance improvement (QAPI). To discuss QAPI, we
need to define our key terms:
- Quality assessment is looking back at what happened to understand current
outcomes, using tools like root cause analyses.
- Performance improvement is working to systematically improve upon current
outcomes, using tools like performance improvement projects.
This discussion
focuses on Centers for Medicare and Medicaid Services (CMS) requirements
applicable to Medicare-participating hospitals, but the standards of hospital
accreditation organizations, including The Joint Commission, contain similar
requirements.
QAPI basics
Since 2003, CMS has required hospitals to develop and maintain QAPI programs as
a Condition of Medicare Participation (CoP). The CMS Interpretive Guidelines to
the Medicare Hospital CoPs now refer to QAPI throughout, from governing body
requirements to patients’ rights to physical environment.
What does a QAPI program actually entail? Under current regulations, a QAPI
program is data-driven and hospitalwide, involving all hospital departments and
services. It focuses on indicators related to improved health outcomes and the
prevention and reduction of medical errors and adverse events. Hospitals must
have ready evidence of their QAPI programs for review by CMS.
Sometimes hospitals design impressive quality plans, but still fall short under
CMS QAPI requirements. This might happen, for example, when the hospital fails
to concentrate its quality efforts on high-risk, high-volume or problem-prone
areas. Or the hospital might not undertake a range of performance improvement
projects proportional to the scope and complexity of its services and
operations. Both are CMS QAPI requirements that surveyors are actively
assessing.
Areas to watch
As CMS surveyors scrutinize hospital QAPI programs more closely, they are
increasingly citing deficiencies in this area. Because QAPI is both the focus
of a specific CoP and referred to within the interpretive guidelines for many
other CoPs, having trouble with QAPI can expose a hospital to multiple
deficiencies for exactly the same issue or situation. Here are two areas to
watch carefully:
Contracted services. Surveyors are highly focused on contracted services
right now, making it a major QAPI risk area. To be hospitalwide, QAPI
programs must include services furnished under contract or arrangement
(think dialysis, infection control and environmental services, as
examples). Hospitals sometimes overlook contracted services when
developing their QAPI programs, but surveyors are specifically directed
under the CMS State Operations Manual to request copies of a hospital’s
service contracts and review them for evidence that they have been
incorporated within the hospital’s QAPI program.
A CMS surveyor worksheet last updated in 2015 suggests that CMS expects a
contracted service to be part of a hospital’s QAPI program unless the
contract is for “exclusively administrative contractual services, e.g.,
payroll preparation.” This is important guidance because it offers
hospitals a sound basis for potentially carving out at least a subset of
contracts from their QAPI programs (those for “exclusively administrative”
services). It’s helpful to note, too, that while this particular worksheet
was developed for use by surveyors assessing hospital compliance with QAPI
requirements, CMS has encouraged hospitals to use it as a self-assessment
tool.
Executive responsibilities. At the end of the day, the hospital’s governing body
bears ultimate responsibility for QAPI. Under the QAPI CoP, the governing
body is expressly accountable for the hospital’s QAPI program and its
priorities, as well as for determining the number of distinct improvement
projects the hospital conducts annually and devoting adequate resources to
QAPI.
Surveyors often look for evidence that QAPI efforts are being
appropriately rolled up through leadership to the hospital’s governing
body. This can be challenging if a hospital’s quality work stalls within a
department or stops at the medical staff committee level. Hospitals will
be better prepared for CMS surveyors if they effectively document (such as
through meeting materials and minutes) that quality assessment and
performance improvement efforts are both directed by and timely reported
to the governing body.
For more information
contact Elizabeth Winchell at 612-305-7703.
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Innovation in the revenue cycle
By Michael L. Duke,
principal, Healthcare Consulting Practice, Baker Tilly, Clemmons, NC
Not too long ago, “revenue cycle” and “innovation” would have never been
associated together, but that is changing quickly. There are a variety of
companies looking at leveraging several point solutions to solve specific
problems in revenue cycle processes that will have a significant impact in
performance. While the awareness is growing, there is an inherent lack of
knowledge about what is innovative and will drive significant results.
In order to proceed, it is appropriate to define “innovative” in these terms
from the book “Innovation Navigation” by Kurt Baumberger: “In order for
something to be truly innovative, it must be a radically new idea, method or
device.”
Now, to apply this to revenue cycle operations, it should be modified to: “In
order for something to be truly innovative, it must be a radically new idea,
method or device that has a significant impact on cash flow, net revenue
improvement or cost reductions.”
With this in mind, there are four considerations necessary to drive innovation
throughout the revenue cycle.
- The “Most Valuable Pilot” approach. Too many organizations pick small pilots to solve
small problems to safely determine if the solution will work. Don’t
we owe our organizations more than that? Anyone can play it
safe, but to drive maximum value, organizations should assess total
operations, rank initiatives by their financial value and then select the
highest value-driven project. Once complete, move to the next project and
continue.
- Overdependence on core vendors. Organizations often place too much dependence on few
vendors who do not provide proactive solutions for some of the more
prevalent issues in health care today. Most of the big-box vendors have
reactionary solutions (e.g., place a rejection in a work queue and have a
person review it). While the desire for single-vendor solutions is
admirable, in reality organizations are not going to effectively solve all
issues with a single-vendor approach. Imagine going to the same physician
no matter what the diagnosis. Heart problems? I’ll go see my general
physician for a stent. Cancer diagnosis? My general physician should know
the protocol to follow. Organizations can and should do
better. Don’t stop exploring solutions just because they may be in
addition to your core vendor. If there is a ROI, then another vendor
should be seriously considered.
- Use of internal resources to solve complex problem. If the issues have a high impact on performance,
your organization should consider hiring outside help. The challenge with
an internal approach is most staff already have a day job and lack
experience with innovation and complex transformation
implementation. Taking on a significant change initiative requires a
unique set of skills and content knowledge. When you have a major
plumbing problem, do you say, “Well, I have a pipe wrench, let’s give this
a go,” or do you call a plumber? Experts are available! Not to mention,
using internal resources can cost your organization more between delays
and hidden expenditures.
- Lack of proper analytics to make adjustments and
measure success. This
is critical. There will be times when the original estimate of a future
state requires adjustments. If the right baselines and measurements
are not in place, it is tough to make modifications. Operational or
process analytics that ingest large volumes of transactional data and
prebuilt analytics to measure performance and progress are crucial to
success and must be timely. It would be challenging to make changes if you
only receive data analytics on a monthly basis. These analyses must
also have the ability to change on the fly so that anomalies can be
explored and trends evaluated in a variety of scenarios as they
occur. Best case, you would also have “what if” capability so as
adjustments are identified, analyses can be performed on the impact of
making specific changes.
If you can safely
navigate the four components that are necessary to drive innovation, then your
organization has a chance at doing something significant with material impact
on your revenue cycle performance.
For more information contact Michael L. Duke at
336-416-0568.
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Financing during uncertain times:
What is best for your hospital?
By Michael Haines,
vice president, First American Healthcare Finance, Fairport, NY
Health care finance professionals do not have it easy today. A combination of
sequester cuts, transitions toward value-based reimbursements and legislative uncertainty
have created a complex maze for finance leaders. Most spend an increasing
amount of time looking for new ways to bend the cost curve.
A focus on your organization’s capital structure will be increasingly important
over the next few years, as adaptability and flexibility are essential to the
long-run success of an organization.
This article explores the challenges and opportunities of two sources of
capital available to health care providers:
- Bond
financing
- Equipment
leasing and financing
Current economic
factors
Capital markets continue to see increased volatility. The positive signs in
economic growth and employment will likely lead to change in current monetary
policy sooner than originally forecasted.
The Federal Reserve has expressed intentions to taper permanent open market
operations that have been providing $85 billion in liquidity each month to the
treasuries and mortgage-backed securities market (i.e. QE3). This has been the
driver behind historically low interest rates. The move has begun to increase
short- and long-term interest rates. Finance leaders are feeling pressure to
lock in low rates as soon as possible.
Bond financing
Bond financing will always be the primary debt product in health care. The
low-rate environment we have experienced over the past few years has helped
fuel new debt issuances throughout the industry. Hospitals around the country
have looked to debt markets as an attractive source of long-term fixed rate
financing. The low rate of return on treasuries has also led investors to seek
higher-risk debt products, which resulted in spread compression between risk
ratings. This too has helped hospitals with higher-risk ratings issue debt at
very competitive rates.
Challenges:
There are several downsides to issuing debt. In general, they come with
material issuance costs and can be administratively burdensome. Time is a
critical component that is necessary when issuing debt, as it can take anywhere
from three months to two years, depending on the amount and structure.
Traditional credit enhancements that have helped hospitals access lower rates
are becoming scarcer. Enhancements such as bond insurance are challenging and
costly. Financial reform aimed at transparency and risk mitigation is going to
challenge vehicles like letters of credit in the near future, making banks less
willing to secure riskier borrowers.
Depending on what the capital will be used for, bond financing is generally not
a good source for short-term projects or equipment that has a useful life of less
than seven years. Issuing long-term debt to finance short-lived assets is a
costly strategy, even at low rates.
The most significant negative issue with debt is the restrictive covenants and
blanket liens that limit future flexibility. During the next few years,
flexibility to adapt to changes will be one of the most important aspects of a
hospital’s capital structure.
Debt has been an attractive source of capital for many years. As rates continue
to increase, new issuance will likely decrease. The current economic changes
will make it challenging to lock in the low rates with bonds, given the lead
time necessary for an issuance. Lastly, the biggest risk in debt financing
today is the limitations it imposes on an organization’s capital structure. The
uncertainty surrounding health care reform in the Patient Protection and
Affordable Care Act stands to be the biggest risk if an organization is not
able to be nimble and adapt to changes.
Equipment leasing and
financing
Like bond financing, the low-rate environment has fueled equipment leasing and
finance products over the past few years. Health care financial professionals
have strategically used this source of capital to help prepare for the
uncertainty that lies ahead. Equipment leasing has provided attractive and
flexible capital to hospitals for many years.
Here is why: Time equals real
money
Lease financing products are intended for specific equipment or projects that
have a useful life of seven years or less. Hospitals are able to take advantage
of the low, fixed rates, without the issuance burdens or costs typical of the
bond debt. The lead time is measured in days, not months or years. This is a
convenient and flexible source of capital that will be essential to hospitals
as they navigate the pending changes.
The shorter terms allow hospitals to strategically fund projects and equipment
with a financial product that is closely aligned with the useful life with the
same low – if not lower – all-in rates than the bond market.
Finally, as the leases and loans are collateralized by the equipment being
financed, these products do not come with blanket liens or debt covenants that
restrict a hospital’s flexibility in the years to come. Each project can be
evaluated independently for appropriate term and structure. These products also
provide hospitals with the option to use off-balance sheet financing. This can
help increase efficiency metrics such as ROA, but more importantly navigate
around existing covenants the hospital might have due to prior debt issuances.
Utilizing lease financing as part of a hospital’s capital structure can be a
strategic, cost-effective and timely source of capital. Health care
organizations seeking flexibility and stability in the coming years should look
to these products as a complement to their existing capital structures.
For more information contact Michael Haines at
585-643-3318.
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