Reading Rehabilitation

Implementing Patient-Focused Care

Reading Rehab Hospital Roots HealthSouth’s RRH Facility Built in 1925 the historic

Stone Manor on a 30-acre campus.

“The million dollar home”. Was originally the home

of Isaac Eberly, a prominent businessman and hosiery mogul.

Leading Change

Clint Kreitner: CEO of RRH from 1989-2000 History:

Early career as a Naval officerRespected entrepreneur with 4 successful

companiesOn board of RRH for 3 years

Kreitner’s Forecast

Kreitner: “The hospital had an awesome reputation, a dedicated staff, and no debt.”

Instincts: his insight of business told him that RRH was headed for difficult times

Reasons: Over 50% of RRH referels came from one large hospital Industry was inflicting double digit annual increases on the U.S.

economy Action:

He began forums with the staff to communicate need for change Opened the financial books to the staff to show them what he saw

Staff Reaction

This type of communication was a first for RRH and not typical for that industry.

It made many of the staff feel uncomfortable because they had been in a thriving industry for 15-20 years and did not want to believe they were in trouble.

Needless to say, his opinion was not universally shared due to his lack of healthcare industry experience.

Rehabilitation Services

Brief History of RRH from 1958 to present In 1998 RRH had 76 beds, 116 therapists and 25 million in

revenue Most patients came to RRH after treatment of an illness or injury

at an acute care hospital Rehab hospitals restore basic functioning, such as walking,

climbing stairs, getting dressed, and feeding oneself Used Functional Independence Measures (FIM's) Goal was to help patients leave functioning as independentely as

possible 

Rehabilitation Services RRH, like other rehab hospitals, also differed from acute care hospitals in being smaller than

most of them.  RRH's annual revenues of $25 million compared to more than $200 million for the largest and

$45 million for the smallest acute care hospital in its region RRH admitted patients with a wide range of diagnoses

Head injury Stroke Spinal cord injuries Orthopedic problems

Received care from 5 disciplines Physiatrists (rehab dr.) Nurses Social workers Physical therapists Occupational therapists

If patient had head injury or stroke: Psychologists Cognitive therapists Speech therapists

Effectiveness

Measured effectiveness by using three dimensions:  Average length of stay Increase of functional outcomes Patient satisfaction

Average length of stay compared favorably to the national average which was 21 days Achieved nearly the same increase in the level of functional

independence Patients were more satisfied with quality of care at RRH compared to

national benchmark) Patient care declined over the next 8 years

This was due to shorter lengths of stay rather than due to fewer patients Fewer patient days = Less revenue

 

Mission

Mission of Reading Rehabilitation As a subsidiary of Adventist Health Ministries, Inc, Reading

Rehabilitation Hospital was a non profit organization in Pennsylvania.

The well being of the patient is the number one priority of the RRH, together with its sister companies.

Because of the center’s affiliation with the Adventist church, commitment to the patient’s well being became stronger.

The mission of the Reading Rehabilitation center did not limit itself to the physical healing, but spiritual healing as well.

Purpose

The organization’s values, as well as strategic and operational decisions were also base on this vision.

The mission and vision of Reading Rehabilitation Hospital was put at a test due to the competitive world of health care.

As mentioned by Kreitner, the CEO brought in since 1989, finding balance between mission and real world business practice was one of the greatest challenges faced by Reading Rehab.

Pressures from Managed Care 1980’s and 1990’s healthcare costs were escalating out of control

with adverse consequences for both the federal budget and U.S. corporations.

The government responded with changes to Medicare and Medicaid.

In 1983, Medicare introduced a Prospective Payment System (PPS) under which standard payments were made based on a patient’s diagnosis, regardless of the institution’s actual cost.

Medicaid, funded through state budgets, declined in funding over the 1980’s and 1990’s, reducing the level of reimbursements.

One of the most significant innovations affecting the U.S. healthcare industry was the rapid emergence of “managed care.”

What is “Managed Care”?

The term “managed care” is used to describe a variety of techniques intended to reduce the cost of providing health benefits and improve the quality of care.

According to the National Library of Medicine, “managed care” encompasses programs.

Main Purpose: To reduce unnecessary health care costs through a variety

of mechanisms such as:

Programs for reviewing the medical necessity of specific services

Increased beneficiary cost sharing

Economic incentives for physicians and patients to select less costly forms of care

Controls on inpatient admissions and lengths of stay

Selective contracting with health care providers

Intensive management of high-cost health care cases

Fee-for-Service (FFS)

Until 1980s private health insurance plans allowed patients to choose their own doctors.

Under this fee-for-service (FFS) model, the role of the insurance company was simply to “pay the bills.”

Doctors were free to prescribe any treatment consistent with accepted medical practice and to determine fees for such treatment.

Change… This all changed in 1980s with new state laws that allowed

insurance companies to negotiate prices directly with health care providers.

In attempt to reduce costs…

Managed care organizations (MCO) adopted a more business-like approach for delivering care.

The idea was to get doctors and hospitals under contract at discounted prices and then control the use of services by managed care health plan members.

What would happen …

Patients would choose from a predetermined list of participating doctors, a primary care physician (PCP) who served as the “gatekeeper” for the patient.

These changes meant that hospitals had to perform tasks more efficiently so costs did not exceed payments received from MCOs.

Reading Rehabilitation Hospital Acute Rehabilitation hospitals like RRH were cushioned

from some of these changes in the healthcare system…at least for the time being!

Most RRH patients were on Medicare, and the more generous the Medicare rate was, the more advantage it was for the Reading Rehabilitation Hospital.

Kreitner noted, “”At times, we would keep patients twice as long as we do, and get reimbursed for it.”

“But we can’t afford to get lazy. So we strive to keep costs down and maximize incentive pay, rather than maximizing the reimbursement.”

Main Goal…

RRH (Reading Rehabilitation Hospital) was at advantage because they would keep patients longer and they would get reimbursements

Prospective Payment System did not force them to lower their cost because Medicare would pay the difference between average cost and what their limit was

“TO MAXIMIZE INCENTIVE PAY”

Competition

Reading Rehabilitation Hospital Only acute rehab in Pennsylvania market Accounted for about 6% of market share Shared the market with 3 acute care hospitals

Reading Hospital & Medical Center (RHMC): 57% St. Joseph’s Medical Center: 24% Community General Hospital: 13%

Upstream acute care hospitals

Rehabilitation Hospitals

Downstream Organizations

Patient FlowLocal Acute Care Hospitals

Trauma Centers

Physicians (home/nursing homes)

Incoming Patients

Discharged Patients

Home

Nursing homes

Continuum of Care

Acute care hospitals kept patients longer Create new efficiencies and fill empty beds Traditional nursing homes began offering

many rehab services Rehab expansion of other industry

participation would have a negative effect on RRH

Market Conditions

RRH = only licensed provider of acute rehab services in Berks County

RHMC tried to buy RRH’s license Clint Kreitner valued it at $6-$8 Million Pennsylvania Regulations required Certification of

need (CON) before granting license for new acute rehab service

CON limited rehabs services others could provide

Market Conditions

Increasing competition in product market Highly competitive labor market

Occupational Therapists Physical Therapists

Unfavorable Supply/Demand Kreitner: “We constantly live in fear that our therapists

will bail out en masse and as a result, the organization will be brought to its knees.”

The Rehabilitation Process

Admission from upstream providers Care providers from multiple discipline

evaluate patients Weekly conference involving interaction

between the patient and care providers Integrated plan care Discharge

The Rehabilitation Process

Process Improvement

Kreitner assumed Leadership Patient care across disciplines ineffective Delay in treatment and inconsistency among

treatments Kreitner Implemented Continuous Improvement

Initiative Kaizen Effect Process

Process Improvement

Process Improvement (Barriers)

Issues impacting the process improvementStaff disciplines cannot cross trainStaff could not be in “ready” statusPatient severity was not known in advanceShorter length of stay, immediate need to the

discipline

Performance Improvement (Barriers) Variance in patient acuity leads to

scheduling problems Service lines are not flexible for the short

length of stay Medicare reimbursement is driven to the

therapy target – loss of revenue

Staffing Barrier Specifics

COP for CMS Requirements for IRFDaily access to Physician24 hour nursingMinimum 3 hours per day/5 daysTwo forms of therapy available

Reading Rehabilitation Hospital:Where are they now?

Acquired by HealthSouth Corp in 1998 One of multiple purchases in the 1990’s Others included NovaCare, Columbia/HCA Mix of facilities, including acute care rehab

Not unlike RRH, faced challenges due to changing reimbursement landscape Medicare Balance Budget Act Managed Care Organizations

Succeeded in maintaining, then increasing revenue projections Diversification Capturing market share (simultaneously solving RRH volume problem)

Changes in Organization Model

Prior to sale, RRH returned to the “departmental” structure Staffing efficiencies returned Issues relation to patient care addressed via better process coordination

As HealthSouth, RRH continues to use this model, now lead by a primary nurse

“24-hour team of registered nurses and personal care assistants assess and attend to each patient's needs. They work in partnership under the primary nurse-model, which assures continuity of care. “

Although “time-limited” twice weekly conferences were piloted, weekly interdisciplinary team meetings have been adopted under HealthSouth

“Each week your treatment team will meet to discuss your progress, goals and discharge plan.’

Continued Growth and Success

The HealthSouth Reading Rehabilitation Hospital has expanded to offer Inpatient Rehabilitation Outpatient Rehabilitation Home Heath Care Service

Continues to demonstrate high levels of patient satisfaction, as evidenced by higher than average ratings in two important measures: “Would You Recommend” “Overall Quality of Care.”

Utilizes an “Outcomes Measurement” tool to track each patient’s functioning both upon admission and after treatment

Uses such data to benchmark outcomes and ensure programs are meeting patient rehabilitation needs

Reading Rehab Group:

Jimmie Olazaba Stacey Benson Anemone Basabakwinshi Tahira Raza Ailiya Raza Quynh Smith Charles Workman Kenith Causey Grace Cruz

References

Commitment Quality. Retrieved November 7, 2008, from HeathSouth Reading Rehabilitation Web site:http://www.healthsouthreading.com/quality_commit.asp

Frequently Asked Questions. Retrieved November 7, 2008, from HeathSouth Reading Rehabilitation Web site:http://www.healthsouthreading.com/quality_commit.asp

Gittell, J.H (1999). Reading Rehabilitation Hospital: Implementation Patient-Focused Care, Teaching Note. Harvard Business Review, 5(899-139), 1-16.

Managed Care. Medline Plus. Retrieved November 4, 2008, from http://www.nlm.nih.gov/medlineplus/managedcare.html

Managed Care. Retrieved November 4, 2008, from http://en.wikipedia.org/wiki/Managed_care