Operational efficiencies

Programs must be reviewed periodically for core program factors. Consider your responses to following basic considerations:

• How easy is it to schedule a test or procedure? • What is backlog or waiting time to get a patient on schedule for a test/procedure? • How difficult or easy is it for patients to get to facility, park their cars and get into testing area? • What is patient flow between CV areas? What is proximity of services to each other? What can be done in service areas to improve work flow for staff? • Are there opportunities to remodel or relocate services to complement program and provide for physical plant changes and other space needs? • Can scheduling be centralized to simplify process for patients and physician offices? • Can registration be decentralized to allow patients to proceed directly to testing area without having to first visit a registration area? • Are there communications systems in place to provide consistent and timely delivery of needed patient information from one service area to another? • What are operating hours of each CV service and do they meet needs of patients? Do they meet needs of physicians?

Review these operational issues to determine if program is meeting present needs and to anticipate any operational changes to meet future needs. Successful CV program services are easily accessible (for both patients and physicians), and are well organized, consistent and timely.

Personnel utilization and management

Health care personnel shortages almost everywhere in nation dictate that special attention be given to reviewing how services are staffed. Is there adequate staff? Is there qualified staff? Is there right mix of staff for care that needs to be accomplished?

Examine services provided and determine number and types of health care personnel appropriate to provide service. The scope of care provided by ancillary, technical and professional staff has changed dramatically over last five to seven years. Some services previously provided by professional RN staff are now carried out by technical personnel. Ancillary staff now perform services previously provided by technical personnel. Revise your mix of personnel in each department to optimize use of staff.

Cross-training staff members also can help maximize use of personnel, so that staff from a less-busy department can help a busy service. This allows for flexibility in critical staffing situations. Be sure to pay sufficient attention to education, training and ongoing competencies of personnel when considering cross-training or when revising or adding to existing responsibilities.

Review staff turnover rates related to specific departments and determine why staff leaves. Departures may be related to working environment (workload, physical plant, management expectations, work schedules) or strong demand for these people in job market. With increasing competition for experienced health care providers, staff are being lured to new employment opportunities by higher salaries, bonuses, matching vacations and flexible schedules.

Financial considerations

As with any business endeavor, financial considerations are a priority.

Pay close attention to CV service operational budgets by examining budget variances and their causes. Technological advances related to CV care have been arriving fast and furiously. However, not all technologies are reimbursed or yet proven cost-effective. A tertiary care center often has an opportunity to capitalize on new technologies and draw market share by adding a new technology very quickly after its introduction and winning referrals from facilities that do not yet offer service.

New, costly technology may prove too expensive for a smaller community-based program to provide without adequate reimbursement. When considering use of new technologies, evaluate all critical factors related to cost and return on investment, including capital outlay, reimbursement, potential for positive outcomes, expected volume and use, and potential to draw market share. The CV program’s technology committee can review specific criteria for considering use of a new technology.

Vendor contracts

All vendor agreements should be examined periodically to determine if conditions of a contract require revisions to reflect changes in practice and use patterns. This same group should provide input and assist in planning for capital purchases or equipment replacements and upgrades.

Essential elements of successful CV service line programs are ongoing review of reimbursement levels, coding and billing procedures. All areas must periodically review regulations and HCFA requirements for changes in reimbursement, new or revised procedure codes and updates to APC codes.

Administrative departments must work closely with physicians to ensure that appropriate documentation supports coding. Managers must also continually provide additions and deletions to charge description master for billable items so that charges for new disposable supplies are not lost.

Although many hospital financial systems lack ability to provide true cost accounting on each case, there are methods to determine average cost per case, cost per procedure and cost per service. Each CV service area should be able to identify and periodically examine those costs to determine any changes and their impact on operational budget. It is role of department managers to investigate methodologies to hold steady or decrease their costs per case.

Program marketing

CV services can amount to a significant portion of hospital’s revenues, and therefore it is important to actively market hospital’s full range of CV services both to consumers and to physicians who refer or have potential to refer patients to program.

Successful CV programs are aware of their market share and actively engage strategies to not only maintain, but also grow that market share. The CV program strategic plan should act as a template for directing marketing activities to both consumers and physicians. Dollars must be allocated to this in either individual department budgets or in an overall CV program budget. The CV director must examine what marketing activities have occurred, their effectiveness and determine where next to direct those marketing dollars.

If PVD services are provided in existing surgery and interventional radiology suites, no additional capital costs can be expected. The expansion of catheter-based care in cath lab to include peripheral vascular interventions will give rise to additional expenses. Imaging requirements for PVD patient may require new equipment purchases but many hospitals have been able to adapt existing coronary cameras. Specialized supplies are also required. Staff education and training must be expanded to include peripheral procedure techniques and potential complications.

Revenue from PVD care provides opportunity for healthy margins for hospitals. Medicare contribution margins for vascular DRGs compare favorably with cardiac DRG margins. Across all vascular DRGs average contribution margin (revenue less direct costs) is more than 30 percent (Source: Market Insights, Inc., San Francisco; Cardiovascular Roundtable analysis 1999).

While there are no statistics on revenue generating figures for interventional radiologists and cardiologists treating PVD, a recent survey provides that information on vascular surgeons. Results from a survey of 1,200 hospital CFOs reveals that vascular surgeons generate an average of $2.2 million in revenue—derived from referrals and associated treatments—for their affiliated hospitals each year.

Where to Go to from Here?

Cardiovascular care is big business. This year alone, American Heart Association anticipates that $329 billion will be spent on this patient population. While PVD portion of total is significantly smaller than cardiac portion, patients are same. Peripheral vascular care is an essential component of full service cardiovascular care.

There is no question that number of PVD patients is growing and these patients are underserved today. Hospitals must decide how to best care for this population. One of first steps is compiling a PVD dedicated business plan that covers: •Market size/opportunity •Competitive environment/issues •Scope of service •Physician specialties/medical coverage •Clinical operations model •Marketing and outreach initiatives •Financial requirements/assumptions •Structure/governance/ownership •Conditions for success •Implementation recommendations and timeline

With growing trend toward healthcare self-education supported through press and Internet, public is becoming increasingly aware of potential dangers of untreated vascular disease. Quality of life has taken on new meaning and older population will continue to seek healthcare resources that will enable them to maintain active lifestyles. Be prepared for baby boomers to seek out and demand assessment and treatment of peripheral vascular problems.

Barbara Sallo, RN, MBA is President of Health Care Visions, Ltd. a cardiovascular consulting firm based in Pittsburgh, Pennsylvania. The firm brings extensive knowledge and expertise in this area of clinical care. Health Care Visions, Ltd. has assisted a multitude of hospitals in all phases of cardiovascular programs from market assessments, program assessments and feasibility studies to business planning and implementation.