Home

Chapter I: Expanding Academic Geriatrics Programs

2. Building Clinical Revenue

The challenge: To explain the longer-term financial benefits of geriatrics to hospitals and outpatient clinical services

Summary

Mastering and communicating the financial side of clinical services is an increasingly prominent aspect of being an academic geriatrics manager. Some geriatrics leaders successfully make the case that a strong geriatrics program has long-term benefits for a hospital and the larger institution (for example, lower rates of re-hospitalization). This has created a stronger bargaining position for geriatrics. Some leaders have conducted formal reviews of their clinical services and have refocused them so they are better linked to academic and institutional missions and priorities, such as the competitiveness of the local market or the value of downstream revenues generated by geriatric primary care services. Geriatrics leaders are developing or expanding new venues for clinical care, adding contracts with continuing care communities, hospices, home medical care services, and inpatient assessment units.

As opportunities grow for geriatricians to blend their expertise with subspecialty colleagues in the care of sick older patients, leaders may seek to change longstanding institutional arrangements in order to make geriatric care financially viable. For example, at one medical center, a geriatrician with expertise in oncology persevered in his goal of joining an oncology clinic. At another medical center, the geriatrics program embarked on a new clinical program focusing on dually eligible patients. As a result, clinical revenues grew substantially. Palliative care services are another example. Many leaders have already established such services in hospitals and some are working to expand them into outpatient settings.

New clinical initiatives often meet with resistance from hospital and institutional administrators. To strengthen their case, geriatrics leaders are adding clinical budgeting and financial and clinical data tracking to their management skills. In addition, they are seeking assistance from consultants and other outside experts to enrich their strategies and develop more sophisticated business plans. Start-up funding is necessary because gathering crucial information to demonstrate value and viability depends on initiating services. At institutions where clinical administrators have balked at providing that initial support, leaders have acquired seed money from their chairs, foundations, or other sources.

Regardless of the clinical setting or type of services, leaders stressed that generating clinical revenue must never take priority over the quality of care provided. Clinical faculty should not be stretched so thin that they cannot do a good job of taking care of patients.

Strategies

Pay attention to the bigger bottom line. When reporting on costs and benefits of geriatrics services, don’t just look at immediate financial data—seek information that addresses the impact of geriatric clinical services on the institution over time. Take into account bigger picture issues that may be of particular interest to institutional leaders. Examine a variety of variables, such as lower re-admissions of patients cared for by geriatricians, and increased patient satisfaction. And, consider cost-saving strategies such as:

  • improving discharge planning to reduce the likelihood of readmission within 30 days
  • reducing the number and cost of medications used during the hospital stay
  • reducing duplication of services such as laboratory tests and radiology through better coordination of information across inpatient and outpatient settings.

Enhance geriatrics’ visibility in the hospital setting. Geriatrics in-service programs and clinical revenue can be enhanced by increasing the visibility of senior faculty throughout the hospital so they can interact directly with other specialists. Don’t rely solely on geriatrics fellows to provide in-patient care, with senior faculty involved only behind-the-scenes. Opportunities for closer contact between senior faculty and other specialists can help to increase geriatrics consults, particularly in relation to discharge planning. A senior faculty member can make the case to peers that geriatricians have the most knowledge and experience with care transitions, and understand what is possible (after discharge) in home care, nursing homes, and other long-term care settings.

Control of your money is extremely important, so negotiate. At one institution the geriatrics leader negotiated the clinical budget with administration. This allowed him to create an account that could be used in any way within legal limits. He discontinued the practice of supplementing clinical losses with medical administrative fees. Instead, he arranged to allocate contracts separately within the clinical budget by establishing three distinct funds:

  • a university account for dollars from outside entities, such as grants and other sources
  • money for the clinical budget, such as medical director fees that include overhead costs
  • revenue generated from seeing patients.

The healthcare system supplemented outpatient care activities. One benefit of such an approach is that when you are applying for a matching grant, you can use some of your administrative support as your share of the match.

Whether division, department, or interdisciplinary center, ensure that geriatrics has a place at the leadership table. The structure of a geriatrics program may vary depending on institutional history, resources, and other factors. Gregg Warshaw, MD, director of geriatrics at the University of Cincinnati College of Medicine, emphasized that no matter what the structure, the geriatrics program director’s status needs to be equivalent to a department chair, in a setting where he is recognized as a program leader and is included at the table with cancer center directors, chairs, and others. Dr. Warshaw noted that the Hartford CoE and Donald W. Reynolds Foundation Aging and Quality of Life grants have been very helpful in positioning geriatrics at this level in the medical school administrative structure. This support has enabled deans to accord geriatrics this stature.

Conduct a strategic review of your clinical services. Having a huge clinical program can detract from the basic missions of teaching and research. Some leaders have purposely limited clinical services to better meet geriatrics program and institutional missions as well as local market factors. An in-depth review can generate stronger, smarter programs by: (1) tapping the experiences of faculty, trainees, colleagues, and administrators; and (2) gathering strategic data focused on efficiencies, quality, and revenues. A review at one institution led to changes including greater integration of clinical services with training and research; more efficient use of faculty time; improved care quality; heightened visibility of clinical services, research, and senior faculty; and enhanced revenue generation. Be sure to incorporate your institution’s mission, priorities, and activities into your review. In situations where high-level administrators value “downstream” revenues generated by geriatrics clinical services, where a highly competitive market exists, or where there is a high penetration of managed care, there is the potential for enhanced institutional support for expanded geriatrics clinical services. Therefore, make the case for how your program can provide value through more efficient and high quality care.

Put quality first.

"When you are starting a new clinical service, be sure it is a top quality service, and that will build momentum for you. Quality is much more important up front. Then you can work on the efficiencies."

Steven Counsell, MD, Indiana University

Build on your own prior experiences and the successes of others. Leaders who have begun clinical programs at other institutions take their best ideas with them to new positions. This could include outpatient or inpatient consultation services, an Acute Care of Elders (ACE) unit, a post-hospitalization medical house calls program, or a geriatrics medical home program. If yours is a new program, review the literature, but also visit model programs for each of the service areas you are contemplating. Learn first-hand from others who have worked out the kinks so you can avoid unnecessary steps while identifying best practices and putting them in place. One leader who had started an ACE unit recommended visiting several model programs, identifying the best ones, and asking their leaders to come to your hospital to help you implement yours. Sometimes doctors don’t ask for help, he noted, but it can save a lot of time, such as when his program adopted a strategy used successfully by another program—initiating team rounds for complicated cases.

Explore new clinical opportunities in long-term care. The expansion of Continuing Care Retirement Communities (CCRCs) across the country offers academic geriatrics advantages over freestanding nursing homes. CCRCs can:

  • support an outpatient as well as a nursing home practice
  • generate more substantial revenue for geriatrics through significant medical director contracts
  • offer expanded opportunities for training and faculty involvement
  • reduce clinical overhead compared to office-based outpatient geriatrics (One leader estimated the overhead costs for office-based outpatient geriatric primary care at about 60 percent.).

Keys to success include identifying the right kinds of CCRCs and addressing competition with community physicians. Generally, nonprofit CCRCs recognize the value of a link to an academic geriatrics program. Such relationships are often more stable and fruitful.

Another opportunity: Providing caring for nursing home patients in sub-acute units (following hospitalization), as you can see the patient and bill more frequently. One area to pay close attention to is faculty supervision in long-term care settings. While geriatric medicine fellows at some programs operate more independently, some leaders have been told by their risk management staff that faculty need to be on site. Moreover, faculty involvement is required for billing. Many programs have structured clinical time so faculty and clinical learners are there at the same time. Despite scheduling challenges within a substantial clinical practice, fellows, residents, and students can learn a lot and have the added benefit of interactions with the rehabilitation team.

Consider other opportunities, including an outpatient “medical home” model, home-based medical care, and medical directorships of hospices. Many programs have initiated or revitalized home medical programs. One university has established a highly structured home follow-up program post-hospitalization. A business model is crucial for these programs. Engaging nurse practitioners and physician assistants is an important part of the model. These programs can work without hospital support because of low overhead, but they have to be run efficiently. Some academic geriatrics programs that offer outpatient services (often considered “loss leaders”) have begun to develop medical home models, which are particularly attractive for patients with chronic illnesses. Such programs are in the early stages. However, medical practices that are willing to develop electronic medical records and incorporate social workers and patient educators (if rewarded through extra reimbursement), can have a positive effect on quality of care as well as on the bottom line, by making outpatient practice more viable. Medical directorships of hospices are another option.

For new clinical services, use all available resources to create a strong business case. Present your information in a business-like manner. Understand how budgeting works at your particular institution. Understand the essentials of facility and professional fees. Back up your budgeting with strong presentations to the individuals who can either support or block the initiative. At one institution, a geriatrics leader who was looking for hospital support for a new palliative care medicine program made his case with new services and a written business plan. The plan identified staff by name, their relevant experience and specialized training (the program leader was a hospice-trained geriatrician), and made the business case for the initiative for the hospital and the larger institution. Many leaders use the Center to Advance Palliative Care (CAPC) for management and business planning as well as for extensive clinical training and support. One leader, for example, learned specific strategies for making the case to hospital leadership, including some of the more difficult arguments for cost-savings. (See Resources below.)

When the hospital won’t provide start-up support, find it elsewhere. Hospitals are often reluctant to take a chance on important new clinical services that don’t have a proven track record of generating revenue. Begin a pilot project with alternative funding, such as a foundation grant or support from a chair. It can be an essential strategy for demonstrating value. At one medical center, leaders in geriatrics and oncology who proposed a new palliative care service were able to secure a foundation grant to start a consulting service. At another institution, the department of medicine viewed the proposed palliative care program as crucial to its institution, which the leaders saw as falling behind comparable institutions nationally. They made the argument that the palliative care service would save in-house costs. Midway through the initial funding period, the program had already improved the institution’s national standing, high quality clinical leadership had been secured, and the program was on its way to demonstrating its benefit to the hospital.

Don’t stop thinking about tomorrow: Continue to make the business case. Pilot projects lay the foundation for new clinical services. However, leaders in both of the above examples have had to continue demonstrating the growth and success of the program over time to hospital administration. The initial investment of time and effort to prepare the business case will pay off again and again for new initiatives.

Spread the word about good outcomes.

“We brought our information about positive outcomes for geriatric patients into the board room. Once the board can see the quality and cost data from its own institution, it’s much easier to make the case that geriatrics should be a major player rather than a luxury.”

Neil Resnick, MD, University of Pittsburgh

Focus on quality in patient care. Leaders emphasized repeatedly that the quality of patient care must come first. “Train higher” and train the right people; make the effort to put policies and procedures in place that reinforce quality. One leader emphasized the importance of instilling a culture of quality first. But to do that you need well-trained doctors, nurse practitioners, physician assistants, and other providers.

Share positive results. Take your good news to deans, chairs, and higher-level administrators. Consider a request to speak to board members of the hospital.

Close-ups

Make an end-run around clinic deficits. Dr. Neil Resnick, CoE director at the University of Pittsburgh, reported that he changed the framework for making the case for geriatrics with hospital CEOs. While losing money is inevitable when providing care in the clinic for the frailest patients, he avoided using an older strategy that highlighted “downstream revenue” (for example, saying that geriatrics opens the door to elderly inpatient revenues.) “Elderly patients will come to the system whether or not we are here,” he said. Instead, he focused on outcomes, without waiting to hear that geriatrics generated a deficit. He looked at every patient over age 65 who was discharged, and compared cost and performance. He found that for hospital discharges, the geriatrics program generated better results than other departments. “We were better per patient than other areas. Thirty-day mortality was the same, but patients of the geriatrics program had reduced readmission and shorter lengths of stay by a third.” Geriatric medicine had a “lower complication rate and highest patient satisfaction, best quality, and lowest cost, of any other group,” he said.

Persevere, line up supporters, and don’t forget billing! William Dale, MD, PhD, CoE co-director and section chief at the University of Chicago, persevered in his efforts to provide outpatient care to older cancer patients in the university oncology clinic because, “being there and being a part of the oncology team is five times as valuable as seeing the same patients in an off-site clinic,” Dr. Dale said. However, he faced significant challenges with billing and setting up this clinic. “This was considered valuable space, and hematology/oncology was initially reluctant to allow a geriatrician to use it.” He spent six months learning about billing to create a “revenue neutral” clinic and to avoid losing revenue for geriatrics, without upsetting hematology/oncology. “I had to work out facilities fees and professional fees, which I had never paid much attention to, and I asked for one room on Fridays when no one else wanted to work, so the space was underutilized.” When nothing further happened, he gave a research talk to hematology/oncology and emphasized complicated technical details and his Beeson funding. “The hematology/oncology section chief attended the talk and loved it. I was offered clinical space and time within a week. Suddenly they decided I was a good bet—a funded researcher with interesting ideas,” Dr. Dale said. By then he had already worked out the billing and had a collaborator in hematology/oncology to advocate for the clinic to his chief. As a result Dr. Dale was able to establish the Specialized Oncology Care and Research in the Elderly (SOCARE) clinic. “If the section chiefs are neutral on a proposal, they ignore it and most of the time it will go away. You have to persevere and do high quality work until the timing is right. My advice is to stick with it and assume the burden of proof that what you do matters! Eventually it will be recognized.”

Rightsizing and refocusing clinical services. The geriatrics program at Indiana University School of Medicine has significant scope. It provides clinical services at Wishard Health Services, Clarian Health, and the Roudebush Veterans Administration Medical Center; conducts extensive health services and aging research; and does all the geriatrics education for the state. Program director, Dr. Steven Counsell, knew that faculty was spread thin. “At one point, as we were not going to hire more people, we needed to realign clinical activities with our education and research missions.” He and faculty undertook a year-long intensive internal review and refocusing to address questions such as: “How could we attract more key stakeholders to support clinical geriatrics? How could we better train people and attract people to careers in geriatrics?” During the first three months they conducted focus groups with trainees, faculty, and others, examined data, and held a faculty retreat. The next three months were spent planning changes, which laid the groundwork for a six-month period of implementing them. They also evaluated changes one year later.

Among their findings were that half of faculty’s clinical time was spent following nursing home patients, spread across approximately two-dozen nursing homes, some with only a few patients. None of their students or residents participated in those services, which were not part of the teaching program. Nursing home services were subsequently reduced by 50 percent to concentrate on homes with the largest number of patients.

On the inpatient side, “we increased the ACE program and made it more attractive,” he said. Previously nurses followed up on patients along with residents and fellows, while senior geriatricians participated mainly in team conferences, seeing patients only briefly. “We found it would be better to have face-to-face contact with colleagues and trainees—giving geriatrics faculty more visibility.” So faculty began “better tailoring of recommendations [about patients] and increased talking with doctors,” he said. This established early, positive doctor-to-doctor experiences, and increased exposure to faculty and research opportunities.

They also beefed up their home medical care service, which has about 200 people on its rolls. “We got good reviews for house calls, which have met the needs of homebound seniors and decreased unnecessary hospitalizations, length of stay, and emergency department visits. Indirectly there are a lot of benefits.” In terms of the geriatrics research group: “No one knew we had one—so as part of a rotation, residents are going to the Indiana University Center for Aging Research, getting more of a sense of what we do,” he said.

For others contemplating such a review, Dr. Counsell emphasized: “It is tough! Be open to findings, because some things really surprised us, and it is hard to implement certain changes. We thought nursing homes were favorites of the hospitals, but we found that administrators believed hospital admissions from these institutions would happen anyway, and we could partner with private practice groups working in nursing homes that send those patients to our hospital. It was painful for us to hear that we weren’t that visible, and no one had heard of our research group, but sometimes you have your head in the sand. We tried to evaluate excellence of clinical services, and how they were perceived. Our first goals were getting high patient satisfaction, providing excellent quality of care, and being viewed positively by physician colleagues.”


Resources

For more information about the impact of geriatrics services on the bottom line, see the Hartford Foundation action brief, A Shared Bottom Line: Effective Geriatrics Services Improve Patient Care, Hospital Finances. http://www.jhartfound.org/pdf%20files/Business%20Case.pdf

For information about developing a business plan, see: Goodwin, JS. Developing a geriatric business plan for an academic medical center. Journal of the American Geriatrics Society 2002;50(4):755-760.

For information about making the business case for palliative care services, and for other palliative care resources, see the Center to Advance Palliative Care (CAPC) web site: http://www.capc.org/

For information on cost savings of palliative care consultation, see Morrison RS, Penrod JD, Cassel JB, et al. Cost savings associated with U.S. hospital palliative care consultation programs. Archives of Internal Medicine 2008;168(16):1783-1790. http://archinte.ama-assn.org/cgi/content/abstract/168/16/1783

For information about geriatrics clinical services in an urban public health system, see Callahan CM, Weiner M, Counsell SR. Defining the domain of geriatric medicine in an urban public health system affiliated with an academic medical center. Journal of the American Geriatrics Society 2008;56(10):1802-1806.

For information about ACE implementation, see Palmer RM, Counsell SR, Landefeld CS. Acute Care for Elders (ACE) units: Practical considerations for optimizing health outcomes. Disease Management and Health Outcomes 2003;11(8):507-517.

Continue to Section 3, Funding Strategies ⇒