The State of Health Care Performance

Performance improvement is about analyzing data and forming plans in a continuous cycle. What can we learn from a difficult 2022 as we head into the New Year?

The recently released Kaufman Hall 2022 State of Healthcare Performance Improvement Report reflects what a lot of us have been feeling in this industry: It’s been a tough year. Financially, 2022 has been the most difficult since early 2020, with intensified staffing shortages, increasing labor costs, ongoing supply chain disruptions, global inflation, and volatile markets.

What can we learn from 2022 that can help us enhance performance?

Workforce

In the face of unprecedented labor shortages, 100% of the hospitals surveyed said they had adopted a recruitment and retention strategy, with most raising starting salaries and making substantial increases to clinical staff wages. Most organizations also increased bonuses and shift differentials.

In spite of all of these efforts, few organizations saw great success and instead were left fighting for a limited pool of resources. One respondent said, “These strategies helped us keep people but there aren’t enough applications coming in.”

Workforce is at the top of the list for cost reductions, but how can that work? The secret lies in finding new efficiencies to capitalize on, including:

• Streamlining recruitment and onboarding processes. Get candidates into their new positions quickly with tailored onboarding technology.
• Using automation to streamline manual administrative tasks and enhance productivity. More organizations are investing in robotic process automation and AI tech.
• Implementing a hybrid care model that combines virtual care and on-site care. This approach alleviates staffing shortages and cost in three major ways: by improving productivity, load-balancing capacity, and improving patient flow.
• Introducing Machine Learning and AI for demand and capacity modeling. Smart tools can be used to more precisely match shift start and stop times to minimize the need for overtime and contract staff.

Volume and Revenue Cycle

Volumes have been affected on two fronts. The staffing shortage has led to organizations closing down beds, and some services have simply never returned to pre-pandemic levels while some hospitals are dropping less profitable service lines entirely. Oncology is the only service that showed significant improvement since the 2021 Kaufman Hall survey. This may be in part attributed to a lack of early screenings like mammograms and colonoscopies during the pandemic.

Surgical volumes have been down across the board. Surveyed executives attributed this to:

• An overall trend of cases moving from inpatient to outpatient.
• Public perception of hospitals as high-risk settings, even though COVID-19 cases are staying down and many safety measures are in place.
• Technology and alternative treatments reducing the need for surgical intervention and shortening recovery times.

Revenue cycle challenges have been amplified by cash-flow pressure. More insurance denials equal more reworking of claims and a longer wait for funds, and the payer mix is including fewer commercially insured patients and more self-pay patients. Also, there has been a large increase in bad debt/uncompensated care.

The takeaway? Solutions will require a team-based approach. This may include:

• Team-based care management that tracks the patient through the continuum of care and alleviates throughput issues. Working with post-acute care sites will help track capacity and identify obstacles.
• Preventing denials before they occur. By using data analytics and customized claims-flagging strategies, hospitals can monitor performance, standardize clinical protocols, and quickly identify opportunities for improvement and training.
• Focusing on clinical documentation improvement (CDI) to ensure that documentation accurately reflects the care given, quality of care, and complexity of patients. This not only will help maximize revenue opportunities but also increase the accuracy of value-based care initiatives.

Physician Services

The Kaufman Report focuses on three aspects of the physician enterprise: provider productivity, the ability to provide patients access to care when they need it, and the volume of existing patients in the service market area.

Key points:

• Organizations that effectively use a higher ratio of mid-level providers outperform on both productivity and compensation.
• It’s necessary to carefully balance cost reduction efforts with growth strategies. Organizations can lose growth opportunity if they downsize labor in the face of lower volumes.
• The value of tracking metrics carefully to optimize patient access to care. Using telehealth technology and hybrid care models are ways to increase access and throughput.

Ready to face the year ahead with solid strategies for improvement? d2i can help. We transform your complex data into actionable insights that will shape the future. Contact us to learn about our dynamic health care analytics solutions that can drive improvement.