Improving its reimbursement through better documentation and control of costs have been key to a turnaround at Hutchinson Regional Medical Center in Hutchinson, Kan. Part of the Hutchinson Regional Healthcare System, the hospital one year ago was not recovering funds for its services and evaluating expenditures as successfully as it is now.
The hospital has partnered with two companies – J.A. Thomas & Associates of Atlanta, and Executive Health Resources (EHR) of Newtown Square, Pa. – to improve its reimbursement. “We’re using these companies to improve our documentation, so that we can get paid for the work we’re actually doing, and for the complexity of patients that we’re treating,” President and CEO Kevin Miller explains. “They’re providing expertise and consultation to the medical staff on what’s the proper level of care for that patient, whether outpatient observation or inpatient.”
The hospital also is using software to determine staffing levels more accurately based on volume to avoid over- or under-staffing. Miller attributes the hospital’s improvement from a $3.8 million deficit to a $9.3 million surplus during his first year as president and CEO to “improved reimbursement through better documentation, better control of expenses with a focus on product management, putting some practices in place, a little self-organization, self discipline – our culture really didn’t have a great deal of financial self-discipline in the past.” These healthcare system figures include meaningful use incentive and Medicare rural-floor budget-neutrality settlement.
Changing the culture was one of the challenges Miller says he faced when he became president and CEO in July 2011 after serving in a similar capacity at a healthcare organization in Ohio. “We had to overcome a culture that really didn’t change or move for over 20 years,” Miller asserts. “So with that comes a need to educate the staff on why we need to change the culture and do business differently. Every hospital is dealing with healthcare reform and declining reimbursements.”
A stronger customer-care approach is helping the hospital’s bottom line. “We’ve got a more formal, accountable and responsible organization that is customer care-focused,” Miller emphasizes. “We’re focusing more on details, processes and outcomes. It’s a culture now where decisions are made at the executive level through discussions and interaction among various components of senior management. In the past, oftentimes one or two people would make a decision instead of a broad representation.”
Miller praises the employees and managers at Hutchinson Regional Healthcare System for much of its success. “I think we have a team of strong leaders here and a cadre of employees and staff members committed, passionate and competent,” Miller declares. “We also have a high volume of long-term, tenured employees and a very broad and well-trained medical staff, especially for a community of 40,000 people. I’ve been very impressed with the medical staff for a smaller community.”
Hutchinson Regional Medical Center is a nonprofit, 200-licensed-bed medical facility for residents of Hutchinson, Reno County and central Kansas. It has centers for heart care with three cardiac catheter labs and cancer treatment that uses computed tomography, along with birthing and intermediate adult care and skilled nursing. Assisted living is located at the Ray E. Dillon Living Center. Additionally, the hospital has da Vinci surgical system capabilities.
“We’re also doing open heart surgery here,” Miller points out. “We’ve done a very good job of staying current – and really almost leading-edge – with much more clinical technology. A 200-bed hospital in Kansas is actually one of the larger hospitals in the state. As a rule, we’re providing services here you might not find in a 200-bed hospital in some of the more eastern states.”
Hutchinson Regional Medical Center is an important part of the community. “We have a community here that truly uses this hospital as a community hospital, and they’re very supportive of it,” Miller stresses. “Also, I think the 12 months I’ve been here, the board of directors has been exceptionally supportive of senior management and also of the use of proven strategies.
“The board has challenged the executive team and requires us to really keep them informed,” Miller continues. “That’s been a change, as well. The board’s been very involved at the appropriate level in decision-making. These people are becoming more educated in hospital systems. A consistent focus for the board is to govern strategy and policy but not delve into hospital operations.”
Because of its relatively small size, Hutchinson Regional Medical Center is outsourcing services such as wound and emergency care to specialized companies that provide services in those areas. Rehabilitation Care of America is managing the hospital’s in-patient rehabilitation unit, which has eight beds. “As a result of that, our volume has increased dramatically in the last several months,” Miller reports. Cardiac and wound care physicians are local staff physicians. Emergency room physicians are outsourced, as is the management of the wound and hyperbaric center and inpatient rehabilitation.
Healogics Inc. of Jacksonville, Fla., is managing the hospital’s wound and hyperbaric oxygen center, and TeamHealth of Knoxville, Tenn., provides emergency room physicians for Hutchinson, a Level III trauma center. “They have enough profit based on the patients they see in my emergency room,” Miller says. “They do their own billing and collections. Whatever they collect, that is their bottom line. It doesn’t cost me anything to have them seeing patients in the emergency room.”
Miller is investigating using TeamHealth for his hospitalist program. With this program, TeamHealth would provide doctors in the hospital who would admit the patients of primary care doctors whose practices are not located at the hospital. This would eliminate doctors leaving their practices to admit their patients to the hospital. “It’s really inefficient for most doctors to run back and forth between the office and the hospital, so most have moved to a hospitalist program,” Miller points out.
Executives at Hutchinson Regional Medical Center are considering adding 9,000 to 12,000 square feet to the facility, much of it for its emergency room, which handles 25,000 visits annually and currently has only 10 beds. “That’s very small for our size of population,” Miller maintains. A hotel-style suite for gynecological operations using the da Vinci surgical system is being designed with an interior decorator, and the birthing center is being redecorated with $100,000 provided by the hospital’s auxiliary, with new bassinets and improved aesthetics.
The Hutchinson Regional Healthcare System also is looking to expand its service area outside of Reno County – where the percentage of elderly residents is higher than the statewide average and population growth is expected to remain flat – into south-central Kansas. “An organization cannot be sustained simply on expense reduction,” Miller points out. “We also have to look at revenue enhancement. If I choose to serve more people, I’m going to have to look at growing my service area.”
The healthcare system has a staff member whose sole job is to interact with community organizations like chambers of commerce and Rotary clubs as well as doctors in smaller hospitals to build relationships and determine how the hospital can support their needs and partner with them better. “We’re not interested in mediocrity,” Miller concludes.