The Future and the Case Management Program

by John Johnston, Sr VP Hospital Consulting, at the Advisory Board, Washington, DC. ---- Originally published August 24, 2016 in HFMA's Healthcare Finance Blog
Published on Sep 03, 2016

Twenty-two years ago PhoenixMed introduced its outcome model of case management to hospital clients across the country. Twelve years later, we published a book, The Leader's Guide to Hospital Case Management which presented the contextual framework of a new strategy for hospital case management. By word of mouth, interest in the non-traditional, progression-of-care approach spread and forward thinking executives adopted the concepts knowing that it would prepare their organization for a future anticipated by the publication of the 1999 IOM report To Err is Human, the Balanced Budget Act and the Medicare Modernization Act all of which foretold of the changes coming to healthcare. It appears that the Advisory Board shares our position that an effective care management program allocates resources strategically to create a "strong, centrally managed and continuumwide care management structure."

The traditional, inpatient-oriented model of case management, discharge planning, social services, and utilization review (UR) does not cut it anymore—because practically every new payment model is designed to place providers at risk for patient outcomes across the entire episode of care.

In addition to carrying inpatient-oriented resources, hospitals are now compelled to invest in new care management staff, often housed outside the hospital with a focus on coordinating care across the continuum. But accounting for productivity and ROI of a more complex staff and—more important—operationalizing these workforce “assets” in a coordinated manner pose new challenges for hospital leaders.

Hospitals can ensure that appropriate results are achieved, and sidestep some avoidable and costly hiring mistakes, by taking the following strategic steps along the care management road.

Seek Budget-Neutral Investments

Although we know that investing in care management is a top priority for most hospitals, the reality is there’s rarely enough in the budget to cover the costs. The good news, especially for finance leaders, is that many of the top-performing programs have achieved success not by adding many more FTEs, but by transitioning existing staff to more flexible roles.

For example, one community health system is seeking to increase the number of emergency department (ED) case managers at one of its facilities. This organization recently evaluated the processes and efficiency of the centralized UR function and found opportunities to reduce the group’s staffing levels. Because these nurses already have a baseline skill set that can be easily transferred to an ED case management role, the plan is to move four nursing staff members from the centralized UR team to the ED case management function.

The health system also understood that such a redeployment cannot succeed without focused and ongoing training to help staff build new competencies and skills, and the implementation of new documentation workflows, metrics, and reports to measure success.  

By creating a flexible, budget-neutral workforce instead of going out on a hiring spree to staff the ED, this health system is demonstrating best practice from both a financial and clinical standpoint—but only as long as all previous responsibilities are properly backfilled amid any reduction in excess FTEs.

Audit the Care Management Staffing Model

Once the care management staff is in place—through a redeployment or an investment in new staff—it’s important to look across the acute care, post-acute care, and clinical network to ensure that staff members are positioned for optimum effectiveness.

Consider another recent example. Over the past two years, a health system in the northeast hired more than 50 new care managers to help deploy care management functions across its network. Some were housed in physician practices, some in a medical home, some in the accountable care organization, and a couple in the post-acute care division. The care managers were all recruited to fill similar positions, but a formal review of the care management program found major inconsistencies across the roles—in job descriptions, backgrounds and skills, responsibilities, and performance metrics. Furthermore, the care management models, developed at each facility, were not coordinated centrally, which resulted in conflicting methodologies and gaps in overall care management processes and objectives. It was a classic example of what happens when planning takes place at the senior executive level while execution takes place in organizational “silos.”

Five essential questions confront this particular health system, and others that find themselves in the same boat:

  • How do we centralize both care management functional assignments and tracking of performance and productivity?
  • Do we have the right number of care management staff overall, and are they deployed appropriately at each site and across all facilities?
  • Is there an appropriate skill mix between clinical and nonclinical personnel?
  • Do we have an overarching care management model to control how methodologies are deployed in each area of the health system?
  • Do we understand how our investments are affecting management of high-risk patients and chronic conditions—and the extent to which they are helping us to avoid unnecessary readmissions?

The need for a strong, centrally managed and continuumwide care management structure is only becoming more pressing. To respond effectively to the demands of bundled payments, value-based purchasing, Medicare readmission penalties, and narrow networks, providers must coordinate across physician practices, medical homes, hospitals, and post-acute care providers, which will pose a challenge from a staffing standpoint.

Labor may be the biggest and most controllable cost for many hospitals, but hospital leaders will require keen insight and a deeper level of acumen to manage staff effectively as staffing priorities shift away from the acute care setting to support a more complex care management agenda.