One of the hottest topics in healthcare is a focus on productivity. As health care professionals, we need to understand the financial and legal implications of measuring nothing but productivity when providing patient care. We need to have a clear definition of the differences between productivity, efficiency, and profit margins. In addition, administration plays a critical role in setting and overseeing productivity standards in healthcare, influencing how these standards are implemented and monitored across organizations. By gaining a better understanding of these principles, we will be able to advocate for ethical service delivery which reflects our clinical judgment and the needs of the patients as we move forward under the Patient-Driven Payment Model (PDPM).
The Patient-Driven Payment Model (PDPM) will go into effect on October 1, 2019. While many therapists believe that this will be the end of a focus on productivity, industry leaders are already looking at ways to provide increased patient care with fewer staff. There are certainly some sound reasons for providing concurrent therapy and group therapy. However, these types of treatment models need to be at the discretion of the treating therapist and not delivered with a “one size fits all” approach. These models are often developed based on prior frameworks, and it is important to establish clear benchmarks to ensure fair and effective implementation.
So what is the difference between productivity and efficiency? And how do productivity and efficiency impact a company’s profit margin?
Productivity is nothing more than a measure of how much time a therapist spent with patients divided by the amount of time the therapist was clocked in. If a therapist is on the clock for eight hours (480 minutes) and spends six of those hours treating patients (360 minutes), they are 75% productive. If that same therapist treats patients for seven hours instead of six, they would be a little over 87% productive. Many companies now push for 90 to 95% productivity (or higher). A therapist that is 95% productive has spent all but 24 minutes of their day treating patients. While it is possible to do this occasionally while providing one-on-one treatment, it is unlikely that this occurs every day. It is important that productivity is measured using consistent definitions and standards to allow for accurate comparisons and reliable assessments across different settings.
With 12 patients to treat and 2 minutes of time spent between patient rooms, that 24 minutes is gone! The push for high productivity percentages raises concerns about the limitations and potential negative effects of focusing solely on productivity metrics, such as reduced quality of care for patients and increased stress for physical therapists and physicians. The need to improve productivity often results in less time per patient, which can impact the quality of care patients receive and may be outside the direct control of therapists.
Productivity in healthcare is measured using various methods, such as work relative value units (wRVUs) and CPT codes, which are used to quantify the work of physicians and physical therapists. These metrics are influenced by third party payers, who use them to determine reimbursement rates and set productivity standards. The case mix of patients and the scale of the operation, such as the size of the office or department, also influence productivity outcomes and standards. Unique productivity challenges can arise in specific areas like maternity care, where patient needs and encounter types differ significantly.
When considering the implications for patient care, it is essential to evaluate the extent of productivity improvements and place emphasis on patient-centered care. Recent findings from reviews and surveys highlight key considerations and growing interest in healthcare productivity, including the need for ongoing improvements and regular review of productivity standards to ensure they align with the best interests of both patients and providers.
Introduction to Productivity
Productivity in healthcare settings is a cornerstone of delivering quality patient care while making the most efficient use of available resources. As the demand for healthcare services grows, physician productivity has become a significant area of focus for providers and administrators alike. Organizations such as the Medical Group Management Association (MGMA) have developed productivity metrics and benchmarks to help healthcare workers and administrators measure and enhance productivity across various clinical environments. Understanding these productivity standards is essential, as they directly influence patient outcomes, the well-being of both patients and providers, and the overall quality of care delivered. By focusing on efficient practices and the implications of productivity measurement, healthcare providers can ensure that their efforts contribute to improved patient care and better health outcomes for all.
Efficiency
If productivity is the amount of time spent treating patients divided by the amount of time a therapist has spent clocked in, what is efficiency? Some companies may push for a certain productivity standard, but a savvy manager will also look at how efficiently a therapist’s time is spent. For instance, if a therapy director does not manage the therapy schedule carefully, there are several considerations that must be taken into account to ensure efficient use of resources, such as patient needs, staffing levels, and reimbursement policies. A patient may receive a lot of extra therapy time that the facility will not be reimbursed for (i.e. the patient received 692 minutes – well over the minutes needed for reimbursement at the Very High level and not enough to capture the Ultra High level.)
The therapy team may have looked very productive on paper, but those extra 192 minutes of treatment (over 3 hours) were technically delivered for free because of the way that Medicare reimbursement works. Likewise, a therapist that travels between two or three facilities each day may be very productive while they are in a facility, but the delivery of services is not efficient because of the money and time being spent on travel. Efficiency can be measured using different methods, such as time-motion studies or cost analysis, but some factors, like travel time or patient cancellations, are outside the therapist's control.
Measuring Productivity
Measuring productivity in healthcare is a multifaceted challenge that goes beyond simply counting the number of patients seen or services provided. Physician productivity is often assessed using methods such as work relative value units (wRVUs), which attempt to quantify the value of clinical services delivered. However, these units and other measurement methods have their limitations, sometimes failing to capture the full complexity and quality of care provided, especially for services that are more cognitive than procedural. This can impact practice expenses, resource allocation, and even physician compensation. As healthcare settings continue to evolve, further research is needed to develop more comprehensive and accurate ways to measure productivity that reflect the true value of clinical services. Ultimately, effective productivity measurement is crucial for informing practice management, supporting quality improvement, and ensuring that both patients and providers benefit from efficient, high-quality care.
Physician productivity and profits
Every company faces the question of how to improve profit margins. This is true for every business – not just therapy. A profit margin is calculated by taking the revenue, subtracting the costs, and determining what percentage is profit. If a facility takes in $100,000 in one month and has $85,000 in costs (wages, benefits, travel, equipment, etc.) the profit margin would be 15%. There are basically two ways to improve profit margin: increase revenue or cut expenses.
While this may seem simple enough, it’s easier said than done. Most companies take different approaches to improving revenue and reducing costs. The challenge for a therapy provider is finding the optimal solution for improving profit margin that works best for their business. A small percentage of therapy providers take a little extra time and look beyond the therapists who are providing direct care to other factors that impact efficiency (travel time, contractor usage, management expenses, etc.) However, most therapy providers have taken a single approach to improving profit margins - focusing on any way and every way that therapists can be driven to spend as much time as possible billing for treatment. This translates into a bottom line that measures nothing but productivity. CPT codes, maintained by the American Medical Association, are used to classify and value physician services, and third party payers rely on these codes to determine reimbursement for clinical services, directly impacting how productivity is measured and billed.
In this short-sighted approach, there is little to no education provided regarding the definition of each CPT code according to the AMA. There is no time allotted for therapist education regarding the screening process and how to identify both the immediate needs of patients, as well as the potential risk factors involved if treatment is not provided. There are minimal dollars invested in CEUs (continuing education) that would better enable therapists to provide quality care to their patients. There is no recognition given for exceptional treatment - only exceptional (and often unbelievable) productivity. Employer-imposed productivity standards can further influence therapist behavior, sometimes pressuring them to prioritize billing and productivity over patient care quality.
Patient Satisfaction and Productivity
Patient satisfaction is a key indicator of healthcare quality and is closely linked to productivity within clinical settings. When patients are satisfied with their care, they are more likely to follow treatment plans, leading to better health outcomes and a more efficient use of healthcare resources. Providers who prioritize patient-centered care often find that their productivity increases, as they are able to manage their time and resources more effectively while maintaining high standards of care. Tools such as patient satisfaction surveys and feedback systems allow healthcare providers to identify areas for improvement and implement strategies to enhance productivity. By focusing on both patient satisfaction and quality care, providers can foster a positive relationship with patients, improve outcomes, and streamline their services. However, the relationship between patient satisfaction and productivity is complex, and further research is needed to fully understand the factors that influence this dynamic and how best to optimize both.
The Role of Technology
Technology has become an indispensable tool for enhancing productivity in healthcare settings. The adoption of electronic health records (EHRs) has streamlined clinical workflows, reduced the time required for documentation, and improved communication among healthcare providers. Telemedicine platforms have enabled providers to care for more patients by offering remote consultations, which can reduce practice expenses and increase access to care. Additionally, data analytics and artificial intelligence are being used to identify trends, optimize resource allocation, and develop targeted strategies to further enhance productivity. These technological advancements not only improve patient outcomes and satisfaction but also help practices operate more efficiently. However, integrating new technologies requires significant investment and training, and providers must carefully consider the implications for both productivity and patient care to ensure that these tools deliver maximum benefit.
The Patient-Driven Payment Model's impact
In October, 2019, reimbursement for patient care will change. A new model – the Patient-Driven Payment Model (PDPM) – will be used to compensate facilities for the care they deliver. The goal of PDPM is to deliver optimal services in an efficient manner to allow patients to move on to a lesser level of care. The model ties the patient’s medical diagnosis to the amount and types of services that they will most likely need. The case mix of patients, including factors such as age, diagnosis complexity, and care needs, will influence both reimbursement rates and productivity standards under PDPM. Therapy will no longer be the driver in terms of reimbursement and this may result in organizations looking to cut corners with therapy by changing their delivery model to improve profit margins.
While Medicare has promised to carefully police providers under the new model, the truth is that there are to be no sanctions related to group therapy - simply a warning if a patient receives more than 25% of their therapy in a group setting. Medicare has also said that it will carefully scrutinize providers who change their delivery pattern dramatically under the Patient-Driven Payment Model. However, their ability to do so is driven by funding. When creating the PDPM, it was necessary to establish clear criteria for measuring both productivity and reimbursement to ensure consistency and fairness across providers.
Government cutbacks are commonplace and government agencies are typically focused on Medicare fraud (billing for services that were not provided), rather than on Medicare abuse (billing for services that are not reasonable and necessary.) Therapists must be able to provide specific rationales for recommended service delivery models (individual, concurrent, and group treatments, along with frequency and duration of treatment) and must be able to understand how those models impact their organization financially.
What SLPs can do to make a change
We, as a profession, need to lead the charge to help therapy providers understand the importance of measuring profit margin, not productivity. We need to help them see that non-billable activities on one day can lead to clinical services that turn into revenue the next day. We need to develop a culture that is mindful of what our employers are going through and strive to collaborate with management to deliver the best possible treatment for every patient. We need to take responsibility for providing excellent clinical care in the most cost-effective manner and identify those services which only we, as professionals, can deliver. We then need to spend our time providing those services for the betterment of our patients, our profession, and those who sign our paychecks.
Tomorrow, when we face our patients, we need to be able to answer these questions:
- Does the evaluation clearly define the underlying impairments that impact the patient’s functional abilities?
- Do the goals for treatment reflect the patient’s functional needs?
- Does the treatment plan reflect the latest in research?
- Has the patient been involved in the establishment of goals?
- Is the patient going to benefit more from individual or group treatment or would they be best served with a combination of both?
- If the resources are not available to provide the optimal treatment for the patient, where can additional resources be found?
- If the patient is making progress, how can the goals be upgraded to further advance the patient?
- If the patient is not making progress, how can the goals be adjusted to reflect the potential for further improvement?
- Are the patient’s caregivers adequately trained to assist and support the patient when skilled intervention is no longer beneficial?
We must be prepared to have the answers to these questions as we advocate for our services on behalf of our patients. Ongoing improvements in clinical practice are necessary to better serve patients and adapt to evolving healthcare needs.
References
- 5 principles of a good change management communication strategy. (2018). Retrieved from http://www.virtualprojectconsulting.com/change-management-communication-strategy/
- Briggs, L. (2015). Prescriptive analytics to play a big role in transforming healthcare. Retrieved from https://tdwi.org/Articles/2015/03/10/Descriptive-Analytics-Healthcare-2.aspx
- Creasey, T. (n.d.). Change is a process. Retrieved from https://blog.prosci.com/change-is-a- process
- Fraud and abuse. (2019). Retrieved from https://thcmi.com/support/fraud-abuse/ From the boardroom to the bedside—using analytics to drive a culture of continuous improvement. (2016). Retrieved from https://www.healthcatalyst.com/success_stories/culture-of-continuous-improvement- mission-health
- Medicare definition of abuse. (2019). Retrieved from https://corporate.findlaw.com/law- library/medicare-definition-of-fraud.html
- Reliable systems and processes. (2019). Retrieved from http://www.ihi.org/Topics/Reliability/Pages/default.aspx
- Trebble, T., Hansi, N., Hydes, T., Smith, M., & Baker, M. (2010, August 13). Process mapping the patient journey: an introduction. The British Medical Journal. http://dx.doi.org/doi: https://doi.org/10.1136/bmj.c4078
- US Institute of Medicine recommends standards to achieve reliable clinical practice guidelines. (2011). Retrieved from https://www.sciencedaily.com/releases/2011/03/110323140146.htm
