Why Hire a Management Company for Your Wound Care Program?

Setting the Scene

  Providing clinically excellent and cost effective wound care remains both a goal and a challenge for many hospitals. The healthcare industry has struggled with cost and quality issues in many arenas for years but wound management has only recently become one of the metrics assessed. This is in part due to the increased interest in wound care services by third party payors, the Centers for Medicare and Medicaid Services (CMS), and the Joint Commission.

  The market for wound management services is large, often underserved, and growing. It is estimated that more than 7 million people in the US (2% of the total population) experience a chronic, nonhealing wound and require care. Once a hospital realizes the need for a formalized wound care program, it must decide if it has the capacity and resources to start one on its own or if it should outsource to a wound care management company. Perhaps as many as half of the hospital-affiliated wound centers currently use a management company. What are the pros and cons of using such a company versus “doing it yourself?”

Pro: Management Company

  Karen McGinnis, RN, BSN; Robert Warriner, III, M, FCCP, FCCWS, ABPM/UHM; Kelli Clark, MBA

  Many essential elements are critical to the success of a hospital-based outpatient wound care program. Hospitals must realize the importance of each element and decide if they can provide them with a home-grown program.

Why Outsourcing?

  While wound care has emerged as a specialty service, developing clinical systems and education to treat these patients is a challenge for many hospitals, consuming significant time and resources. The Association for Advancement of Wound Care Quality of Care Task Force documented that the framework of quality systems for wound care model facilitates high-quality wound care across the continuum of care.1 Factors influencing clinical effectiveness include the professional competency of wound care providers, medical information systems, wound and quality-of-care outcomes tracking and response, resources, cost effectiveness, consumer expectations, and research practice.

  Certification and accreditation are important to establishing a wound management program. Few wound management companies have earned the Joint Commission’s “Disease-Specific Care Certification” for clinical and operational excellence in wound management. Undersea and Hyperbaric Medical Society (UHMS) facility accreditation also bolsters additional program credibility. Using a Joint Commission-certified and UHMS-accredited management company can save the hospital significant time and resource commitment and gives the program the superior credibility it needs to be recognized as a resource in their community.

  Developing a comprehensive wound management program that provides the pillars of quality stated in the AAWC conceptual framework can prove arduous to hospitals and health systems.1 Many hospitals are finding they do not possess the core competencies to handle wounds on a volume basis. Developing a program can be time-intensive and burdensome to staff, education, marketing, and finance. While many of the necessary components of the program can be acquired separately and “assembled” by the hospital, this requires a significant investment in acquiring the knowledge base to assess these components; plus, the time and cost of acquiring and assembling these components (from education of professional staff to database design and validation) can be prohibitive or extend the time from concept to program implementation. Development costs, as well as the ongoing expense of keeping the program updated, need to be carefully planned. Hospital “home grown” programs can fail to heal wounds as quickly as possible and miss opportunities to utilize hospital services.

  For these reasons, many hospitals utilize the outsourced services of a management company with expertise in all areas of wound care that can provide a comprehensive, proven approach to wound care management. Outsourcing wound management services does not reflect on the abilities of current clinicians — rather, it allows clinicians to focus on care while other duties are handled elsewhere.

  Data collection. Data collection, including a large validated database and quality assurance processes, can ensure each patient is advancing through the appropriate clinical pathway. Detailed analysis of data enables programs to immediately alter the course of treatment if the patient is not progressing as expected. Also, a significant wound care database provides top clinical expertise, benchmarking, research, data systems, and a network of experienced staff to treat the growing number of patients who have chronic, nonhealing wounds.

  Coordinating interdisciplinary care. Comprehensive wound management programs integrate many different medical and treatment specialties to ensure that each patient heals as quickly as possible. An interdisciplinary care management approach to wound care, combined with established treatment procedures, helps prevent recurring wounds and leads to high levels of patient satisfaction. Wound management services companies also help a hospital by coordinating the purchase, installation, and operation of a hyperbaric oxygen therapy (HBOT) chamber, which, when clinically indicated, can significantly improve healing and bolster a hospital’s income.

  Education. Community and physician education are important to the success and growth of a wound management program. In 2005, the Health Care Advisory Board’s Clinical Advisory Board documented that while hospitals are typically responsible for cost and quality, physician practice patterns ultimately drive institutional performance.2 It is crucial for a wound management program to provide community education support and collateral for physicians relating to wound care and services provided.

  Continuum of care. A full continuum of care approach includes outpatient and inpatient care, HBOT, and outreach (nursing homes and skilled nursing facilities [SNFs]). These programs can contribute to the financial goals of the hospital with revenues generated from wound care and HBOT services and to several outpatient and inpatient ancillary (eg, vascular and surgical) services. Using clinically proven guidelines can significantly improve healing rates and patient satisfaction.

  Responsive to regulations. The Joint Commission has targeted pressure ulcers in their 2006 patient safety initiatives. A comprehensive wound program can help decrease acquired wound occurrences and associated risk management costs, decreasing length of stay for wound care patients and saving on wound care dressings and supplies and specialty bed and overlay costs, while complying with Continuum of Care Standard guidelines from the Joint Commission.

Growth of Outsourcing

  Outsourcing contracts continue to grow.3 Once limited to support services, additional services are increasingly outsourced to help meet strategic goals financially, operationally, and clinically. With specialized knowledge increasingly important to success, healthcare organizations will turn to outsourcing experts for help to increase opportunities while focusing on core competencies. Highly specialized support services can hit the ground running, greatly reducing time to implement the program and ramp up both effective penetration of the service within the hospital’s catchment area and quality clinical outcomes for patients.

Conclusion

  Outsourcing can quickly and consistently offer wound management services that lessen the hospital’s time and resources used to develop and establish a comprehensive program while maximizing the return. Outsourcing offers a comprehensive program that includes a well-developed, clinically superlative pathway, an extensive outcomes database, reimbursement support, and effective community and medical education that enables hospitals to exceed clinical and financial goals.

  Clinical excellence will lead to financial excellence — an outsourced wound management company will help direct the hospital toward both.

References

1. Paine et al, (2006, November). The AAWC Conceptual Framework of Quality Systems for Wound Care, Ostomy Wound Management, Vol 52 Issue 11 pp 57-66.

2. Miller, Cormac (2005).Toward a New Compact Emerging Models for Partnering with Physicians to Improve Cost and Quality, The Advisory Board Company, Washington, DC. pp1-19.

3. Moon, Suzanne. (2004, September). Modern Healthcare, Outsiders Moving In, pp 51-54.

Con: You Don’t Need a Management Company

Toni Turner, CHT

  To create a successful wound center, you must recognize that no wound center is an island. It connects with every hospital department from housekeeping to the business office, including risk management, medical records, patient registration, quality assurance, and medical staff. Opening a wound center is a daunting task that begins with the development of a business plan and must include setting up a chargemaster — perhaps the most important function.   To set up the chargemaster, you must know all the services that will be rendered and how they will be transmitted to the computer system that generates charges in relation to hospital financial cycles, a process unique to each institution. Wound care billing guidelines differ for all third-party payors — economic realities are attached to every wound care product and service. It is easy to understand why, faced with such an intimidating to do list, a hospital would choose the services of a management company. So what is the down side to using a management company?

Conforming to an Operational Model

  A management company has a basic pro forma and model of operation. It provides clinicians (often excellent) basic clinical, but not usually operational training. This is a framework in which you pay top dollar but that is not likely to be customized to conform to the unique circumstances of your facility. In essence, this makes you a franchise of the company rather than an integrated part of your hospital.

  Integrating care. Nearly all independent hospital-affiliated wound centers provide both inpatient and outpatient services to complete the continuum of care for the patient. Wound centers fail because of lack of integration. — they must be integrated inward within the facility and outward with local caregivers like nursing homes, social services, long-term acute care (LTAC) facilities, and the case managers of third-party payors. The typical management company approach is to set up a “tertiary department.” The Joint Commission does not look favorably on “islands of care,” a common result of the franchise approach to creating a wound center.

  Cost misconceptions. Most management companies require a substantial down payment (five figures). Hospitals may feel that they need the companies in order to provide turn-key operations, particularly to initiate hyperbaric operations for which they may not have the ready capital. However, manufacturers will lease chambers at reasonable rates to hospitals, usually for less than the down payment required by the management company. Furthermore, most monthly management fees average 75% to 90% of wound center collections, sometimes in excess of 100%. Management companies rarely wait until after the hospital has collected to invoice for their fees. Thus, depending on the turnaround time the facility has for collections, this can significantly reduce cash flow. The fact is, while hospitals may avoid up-front investment, over time, the management company fees will total much more than the cost of developing the program de novo since you are paying for the overhead of another company.

  Reimbursement. The argument for yielding virtually all wound center profits to the management company is that the wound center will spin off dollars for other hospital departments. However, Medicare is moving toward a reimbursement structure that rewards efficiency as opposed to interventions. The business model of the management company cannot support the move toward pay for performance, carve outs, and other new payment strategies on the near horizon.

  Furthermore, the Joint Commission requirements for live-time help with medication reconciliation, summary lists, and patient safety goals are not provided by any management company database. “Managed” wound centers still must handle these manually. Despite large management fees, paper charts remain the legal medical record at all wound centers run by management companies.

  Chart review limitations. Management companies work hard at improving performance and quality, usually by retrospective chart review. At best, approximately 1% of charts can be reviewed for quality issues. At this time, no national management company utilizes a Level 4 electronic medical record (EMR) for data management — all rely on web-based data management systems. None of these data systems calculates the physician or facility level of service; thus, they are incapable of providing automated, real-time billing auditing for either the provider or the clinic. Nor can they be used for broad quality improvement projects. Due to their retrospective nature of data submission, considerable time delays can occur in the submission as well as the analysis of data; such systems open the door for post hoc “vetting” of outcomes. These systems serve primarily to provide data for company marketing efforts rather than for improving direct patient care at point of service, such as incorporating clinical practice guidelines that would improve care at the time the patient is seen, a national standard for EMRs.

  In contrast, many independent wound centers have easily justified the relatively small expense of a wound care-specific EMR that addresses the necessary Joint Commission requirements, facility and physician billing calculations, and quality improvement automation. An EMR such as this is all that is necessary for medical quality improvement programs or to implement pay for performance. At this time, unlike many independent wound centers, no management company is prepared for the move to pay for performance for its providers.

  Hyperbaric oxygen therapy. Hyperbaric regulations are uniform national standards. Excellent safety training for clinicians is readily available from many hyperbaric organizations. The management company training courses, if they offer CMEs, are open to non-participants in management contracts and national meetings are sponsored by wound and hyperbaric associations and societies that also provide valuable reimbursement seminars. Rather than having a formulaic approach, many consultants operate as personal trainers, offering a la cart options for reimbursement consulting, medical quality improvement, and other services that can be purchased and renewed as needed.

  How long are services required? While management contracts often cover 3 to 5 years, the staff at most facilities have “figured it out” after the first year. Therefore, the cost benefit of those last few years of the contract is significantly reduced. Management companies do not report their turnover rate, but a substantial portion of hospitals terminate contracts early, even at a financial penalty, because management company services are no longer required. Furthermore, sometimes management contracts include clauses that attempt to prohibit the hospital from continuing to provide wound center services if the contract is cancelled. Hospitals should read these contracts carefully.

  Staffing. Provider-based regulations (CMS 413.65) prohibit management companies from employing staff who are directly involved in the delivery of patient care (management staff are excluded from this regulation) at any off-campus location. The provider must request determination by the CMS of a provider-based status if that is how they wish to be designated. If the CMS learns that a provider has treated a facility or organization as provider-based without this designation and determines the requirements were not met, the facility risks pay back for the difference between CMS estimated payments and those actually made.

  Changing reimbursement requirements. Perhaps of greatest concern, anticipated changes in reimbursement will increase the importance of documentation and drastically reduce the size of the pie to be shared with a management company. Most facilities are aware of the CMS’s proposal to reimburse facilities based on wound size. An alternative method, acuity scoring, endorsed by the Alliance of Wound Care Stakeholders, is under consideration. In December 2005, the Alliance met with CMS staff and presented recommendations for providing accurate assessment of the actual work involved in wound care visits that could be used as determinants for E/M levels. The Alliance based their recommendations on acuity scoring because it provided a more accurate and reproducible method of measuring actual work than wound size or time through data analysis of patients using a source document. The CMS has not determined what method it plans to use. While many facilities use a paper version of this system, if acuity scoring is implemented, automated systems for facility billing in a Level 4 EMR will be highly advantageous. Interestingly, when data were needed for the acuity scoring project, a non-managed facility provided it. No management company has an automated system in place, although ironically, independent wound centers using a wound care-specific Level 4 EMR currently have automated acuity scoring for facility billing.

Conclusion

  Medicare is moving to align reimbursement with quality of care that is quantifiable and based on a continuum of care demonstrated by each healthcare provider, causing hospitals to re-evaluate the need to outsource management of any service and to revise the criteria used to evaluate potential partners. Estimations of potential revenue based on old models must be viewed skeptically. Good patient care is not enough. Scant published data demonstrate improved patient outcomes in managed wound centers. Hospitals must evaluate these relationships on the basis of overall value to the healthcare system. Furthermore, the management company must demonstrate it is capable of the necessary service integration. Hospitals must determine whether the current management company business model is compatible with the paradigm shift occurring in the economic model of wound care.