5 ways to modernize the business side of your business

Nearly three years ago, New York City-based Institute for Community Living (ICL) went through an extensive rebranding and restructuring process. This was not just a marketing exercise; the company put a new focus on metrics to improve its clinical operations and to support its long-term financial future.

“We looked at how we can support our business in an empirical way,” says president and CEO David Woodlock. “That’s inextricably linked to our mission. We instituted improvements and strategies to better focus the business side of our operation, but all of that is built on how to deliver on our mission.”

Mental health and substance abuse treatment service providers are under new competitive pressures that are forcing them to address business and operational challenges in ways that they hadn’t before.

In states where Medicaid has been expanded, the mix of clients has shifted dramatically in a short time. The Centers for Medicare and Medicaid Services (CMS) and private payers are shifting reimbursement models, which will require new levels of data collection and documentation. Providers might need to prove their worth to earn status in more restrictive payer networks. And finally, some providers might be eyeing a merger or partnership, or might want to attract venture capital in order to expand.

In all these cases, providers will need to have the tools, technology and staff required to adapt to this more market-based landscape where they might be competing for the attention of clients, payers and investors—some for the first time.

“Payers are more value- and outcome-focused, and there’s a new consumerism among clients,” says Tom Schramski, president of Tucson-based healthcare M&A advisory firm Vertess. “Executives have to understand that and be able to convey the value of their treatment programs to the marketplace.”

For ICL the organization not only ramped up its data collection and analytics efforts, the company also invested in making its facilities more welcoming, implemented new staff training initiatives and added primary care services at some sites via a partnership with a federally qualified health center (FQHC).

“That’s very deliberate,” says COO Chris Copeland. “It changes the very nature of the way our services are seen, so they are more relevant and accessible to a broader range of people. That’s how manage care organizations are going to want services delivered.”

And the payer mix seems to have some crossover when it comes to being a provider of choice.

“Depending on the government to roll clients to you because you have services is not part of the equation anymore,” Woodlock says. “You have to maintain your focus on recovery, but also operate in a more retail-like environment where payers either purchase your services or they don’t.”

There are a number of critical operational areas in which behavioral health services providers might need to modernize their operations.

1. Go big or go niche

There has been a wave of mergers in the industry, most driven by the realization that in order to thrive in this new economic environment, providers will need to provide greater scale or distinct, high-quality, niche services.

“You have to have the money to expand and keep the facilities where they need to be in the market in order to retain staff and grow programs,” says David Chernof, vice president of quality assurance and standards at Bridgeway Behavioral Health in St. Louis, and Behavioral Healthcare editorial advisor. “Or you have to be the provider in the market for a particular service or demographic.”

Bridgeway recently merged with Preferred Family Healthcare a move that expanded the care portfolio for both companies. Bridgeway offered a wide scope of services, while merging with Preferred Family gave them the scale to succeed.

“Look at things through the eyes of the clients,” Schramski says. “What can you do to make sure they get the services they need? That’s where the focus should be.”

Providers will need to offer a continuum of services as close as possible to the client, either through expansion or partnerships.

“Managed care organizations are looking for that continuum of service,” Schramski says. “You’re in a much better position if you can put together all of those services or affiliate with other providers who can help you do that.”

2. Remember that data is critical

Both ICL and Bridgeway have emphasized collecting quality and outcomes data, which will be critical for improving care and for new reimbursement models in today’s era of healthcare reform.

“You have to be able to gather and pull that data out in a useable format, and understand what the data is telling you,” Chernof says. “That’s what most agencies are struggling with. For so long, treatment agencies didn’t really deal with data. Everything was anecdotal.”

At Advanced Recovery Systems in Ford Lauderdale, Fla., metrics have been part of the mix since the company was founded. CEO Mitchell Eisenberg, MD, says his team set out to standardize policies and procedures across facilities, establish a compliance and audit program, and measure outcomes. As part of that effort, the company established an aftercare program that provides longer term monitoring, which can be used for better outcome analysis.

“A fair amount of our clients are staying with us because they know recovery is difficult,” Eisenberg says. “We are getting very good data that way. You can differentiate yourself that way, by having that record. It’s not easy, but you have to be diligent and look at the technologies that allow you to get that level of sophistication and monitoring.”

Evidence-based performance and data analytics that demonstrate such quality will be paramount.

“Sophisticated outcome collection and aftercare programs with business analytics IT will be critical to secure space in limited payer networks,” he adds.

ICL integrated client outcomes questionnaires with its electronic health record.

“We take that information and aggregate it, and then look at it from a divisional level, program level and agency level to understand how we can make our services better and evolve the work,” says Elizabeth Cleek, chief innovations officer at ICL.

That data is used to evaluate program effectiveness, to share data with other stakeholders like MCOs, and to leverage while applying for additional grants or research collaborations.

Most organizations already collect a lot of client data, but don’t necessarily do so in a standardized or organized way. Cleek says that you should start by looking at the data you already have, and then build on those efforts. You can also begin the analysis and reporting work using simple tools like spreadsheets.

3. Make strategic technology investments

Experts emphasize the importance of investing in an electronic health record (EHR).

“We thought it was vital for improving patient care and creating a seamless well of information that is accessible to all caregivers in real time,” Eisenberg says of Advanced Recovery Systems’ substantial investment in a system. “It supports good decision making and provides a more efficient way to see quality indicators and measure outcomes. It provides the ability to audit compliance and quickly identify best practices.”

For smaller organizations without much of an IT budget, there might be opportunities to partner with larger providers and take advantage of their technology platforms. Chernof at Bridgeway says that there are a lot of other types of interesting IT applications to evaluate, such as mobile apps that allow clients to stay in touch with counselors or self-report. For example, Bridgeway is using a disease management app called Epharmix as part of a SAMHSA pilot.

 “Implementing things like that can increase retention,” Chernof says. “It can enhance the likelihood of staying in recovery because it helps provide greater access to resources.”

Apart from the EHR, there are also low-cost ways to upgrade other business technology systems. “One thing that gets in the way of taking advantage of the remarkable ability of computers and the internet to gather information, track it, analyze, share it, and work more effectively is the perception that it has to cost a lot of money,” says Dick Dillon, CEO and consultant at Innovaision LLC in Clayton, Mo.

A company called TechSoup, for example, allows non-profits to gain access to software at reduced costs. There are also free, open-source alternatives for a lot of business software systems.

Providers should also seriously investigate telehealth and other emerging online counseling options. However, telemedicine has regulatory variables, so providers should be cautious about following state guidelines and licensure requirements, too.

“Not only does it save money in that you don’t have to build new facilities, it also provides a level of convenience for clients that makes them more likely to continue to remain connected to the treatment provider over longer periods of time, even if they move,” Dillon says.

4. Engage payers

Payer networks are shrinking, and if you plan to remain on the short list your organization needs to find out how you can provide the services they are looking for.

“You have to directly engage with payers and find out what their problems are,” Schramski says. “You have to be able to deliver the services they are looking for, because that’s where outcomes are being assessed.”

Don’t wait for the payers to come to you because often they won’t even know who you are, Schramski says.

“Introduce yourself and give them the sense that you belong, and find out what needs they have that you can meet,” he says. “You might not have all the resources, but you can come up with a plan.”

5. Make staffing adjustments

Such realignment in the industry will require some staffing adjustments for providers who have traditionally focused on clinical experience in terms of mission alone. In some cases, payer requirements will influence these decisions as well.

“As insurance plays a larger role in reimbursement, carriers are looking for licensed clinicians,” Chernof says.

Business acumen will also be important for those in leadership roles. ICL has had some turnover at the program level as leaders have emphasized the need to not just understand clinical side of things but also how to run the business efficiently.

“We’ve done a lot of work in making people understand that with no margin there is no mission, and how we’re balancing those needs,” Copeland says. “We are hiring people into positions that have some serious understanding of how to run a business.”

As part of that process, the program staff meet monthly with the finance department to go over both clinical outcomes and financial data.

“It’s a philosophical change,” Copeland says. “It’s a constant communication issue to relay that what you’re doing is in service to delivery of care, rather than just being service to the money side.”

ICL also instituted training and workforce development to help staff gain those skills.

In the next few years, providers will need to evaluate client needs, payer requirements and the competitive landscape in order to align their business operations with changing market realities.

“Understand the market and where it’s going, and get an honest appraisal of the future,” Schramski says. “Then assess your own organization. What resources do you have, and how can you best deploy them to be successful? Who can you partner with to get to a stronger place in the market?”

Success will also require metrics and data, so be prepared have outcomes documentation on hand. It will be necessary for clinical improvements, establishing partnerships with other providers, and for reimbursement.

 “Our field as a whole has had an ambivalent relationship with outcomes for decades, and metrics were traditionally around the absence of bad things, or around volume,” ICL’s Woodlock says. “Now we have to show whether people are getting better. Our challenge to our own staff is, if you believe in recovery, then prove it.”

Brian Albright is a freelance writer based in Ohio.