Transcript NAHC Annual Meeting 2009 Aligning Incentives

Aligning Incentives Increases Case Capacity, Productivity
and Improves Outcomes While Controlling Costs,
Even if Under a Collective Bargaining Agreement
NAHC ANNUAL MEETING
October 10 - 14, 2009
Pat Laff
Managing Principal
Laff Associates
117 Club Course Drive
Hilton Head Island, SC
(843) 671 – 4170
laffassociates.com
29928
Presented By:
Walter Borginis
Exec. V.P. & C.F.O.
Visiting Nurse Assoc. of
Greater Philadelphia
3300 Henry Avenue
Philadelphia, PA 19129-1121
(215) 581-2004
[email protected]
Staff Growth & Development
“To Build a Great Staff,
Pay Them Well,
Keep Them Busy, and
Keep Them Happy”
Jules W. Lederer, Chairman & Founder
Budget Rent a Car Corp. of America
Caregiver Compensation Goals
From an Agency Prospective
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Staff Recruitment & Retention
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Optimize Productivity
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Management of Unit Costs
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Management of Episodic Costs
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Optimize Case Management Capacity
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Utilize Primary Case Management Model
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Optimize Patient Outcomes
Caregiver Compensation Goals
From a Staff Caregiver Prospective
 “Take Home” Pay and Benefits
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Work Effort
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Sense of Accomplishment - Patient Care
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Sense of Appreciation
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Contribution to Agency
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Fairness
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Educational Opportunities
(Time Required)
Where Does the Financial Manager
Fit Into This Effort
The Financial Manager Should Review:
 Current Agency (and Affiliate) Policies
– Flexibility of Approaches
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Payroll and Accounting System Flexibility
Union Contracts
Staff Productivity
– Cases Managed
– Visits per Day
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Targeted Unit Costs by Discipline
Where Does the Financial Manager
Fit Into This Effort?
Identify and Align Incentives
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Meet with Clinical Management
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Identify Goals for all Clinicians
Current Case Management Model!
Cases Managed and Productivity – Actual versus Plan
Plan of Care Consistency with Standards of Practice
Timeliness Documentation Submission
Accuracy of OASIS Completion
Achievement of Optimum Patient Outcomes
» Low Un-Planned Re-hospitalization Rates
» Low Emergency Department Incidents
– Very Positive Patient Satisfaction Results
– Spirit of Volunteerism and Team Players
Caregiver Compensation
Remuneration Models (With & Without Fringes)
 Hourly (Non-Exempt)
 Salaried (Both Exempt & Non-Exempt)
– With or Without a Visit Productivity Bonus
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Pure Incentives
([Per Visit Rates] [Non-Exempt])
– Weekday & Weekend Structure
– With or Without a Case Management
Incentive
Human Resource Policies May Effect Creative Flexibility
Caregiver Compensation
Pure Incentives ([Per Visit Rates] [Exempt])
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Visit Rates
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Case Management Payment per Patient
Paid Days Off Based Upon Average Daily
Earnings for the Previous Quarter (or Six
Months)
Compensation Floor at 75% - 80% of Average
Projected Earnings, if Advantageous
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– Structured by Type of Visit (including Telephone
Follow-up Visits – Telehealth)
– Cafeteria Approach to Premium-Based Fringes
Caregiver Compensation
Pure Incentives ([Per Visit Rates] [Exempt])
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Visit Productivity Incentive, Layered up to 5% of
Quarterly Earnings, Based Upon Threshold of visits
in a Calendar Quarter
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Episodic Incentive, Layered up to 5% of Quarterly
Earnings, Based Upon Threshold of Cases Managed
in a Calendar Quarter
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Outcomes Incentive, Layered up to 5% of Quarterly
Earnings, Based Upon Threshold of Designated
Outcomes Achieved in a Calendar Quarter
Caregiver Compensation
Pure Incentives ([Per Visit Rates] [Exempt])
 Weekender Program
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Additional Weekend Premium to Visit Rates
Friday-Noon to Monday-Noon
Scheduled Admissions & Follow-up Visits
Patient Case Management Rates
Weekend On-Call Activity to Separate Staff
Person
– Earns Prorated Fringe Benefits Including Paid
Days off
Caregiver Compensation
Pure Incentives ([Per Visit Rates] [Exempt])
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Pros From the Staff Prospective
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Cons From the Staff Prospective
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Earnings Potential Well Defined
Earnings Directly Relate to Effort
Continuity & Coordination of Patient Care
Improved Morale (No Longer Carrying “Deadwood”)
May Not be Readily Accepted Within Agency Structure
Less Productive Staff Fear Loss of Earnings
No Overtime Compensation
Enforces Timeliness
Caregiver Compensation
Pure Incentives ([Per Visit Rates] [Exempt])
 Pros From an Agency Prospective
– Incentive for Increased Visit Productivity
– Incentives for Increased Number of Patient Cases
Managed
– Positive Incentives for Timeliness of Documentation
– Positive Incentive for Increase Volunteerism
– Fixes the Salary & Payroll Tax Cost Per Unit of Service
– Develops Internal Case Capacity Without Increasing Staff
– Earnings Potential Increases Staff Recruitment &
Retention
– Interfaces With Utilization Management Based on Medical
Necessity
– Enhanced Continuity, Coordination & Communication
– Enhanced Patient Outcomes
Caregiver Compensation
Pure Incentives ([Per Visit Rates] [Exempt])
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Cons From the Agency Prospective
– May Not be Initially Accepted Within Agency Staff
– May Cause Attrition of Less Productive Staff
– Generally, Not Acceptable to Union
Representation – Collective Bargaining
Agreements
Caregiver Compensation
Popular Myths
Pure Incentives
([Per Visit Rates] [Non-Exempt])
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Promotes Visit “Over-Utilization” to Patients
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Promotes Reduced Level of Care Quality
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Only Applies to Per Diem & Part-Time Staff
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Does Not Apply to Benefited Staff
Caregiver Compensation
The Keys to Success
Present (Sell) the Program Well!
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Clinical Staff
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Primary Care Clinical Model
Orientation and Training
Continual Education
Accountability
» Correct Their Own Errors
– Earnings Potential & Bonus Structure
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Immediate Supervisory Staff
– Aligned Incentives…Matching Staff Performance Levels
– Re-enforcement and Holding Staff Accountable
– Case Conference Model
Agency Performance Incentives
for all Staff
Design a Comprehensive Agency-wide Incentive
That Will Unify the Agency Culture
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Establish an Incentive Dollar Pool, ie Percentage of
Profits
– Determine Profitability Level
– Excess over Profit Plan (Budget)
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Establish Criteria for all Personnel, Both
Management and Staff
Communicate Results Monthly
Monthly Payment, Allowing up to 60 Days to
Calculate Results
Agency Performance Incentives
for all Staff
Design a Comprehensive Agency-wide Incentive That Will
Unify the Agency Culture
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Improved Clinical Outcomes
– Home Health Compare Scores
– Outside Benchmarking
– Reduced Non-planned Re-hospitalizations and Emergency
Department Incidents
» High Risk Patients
– OASIS Timeliness and Accuracy
– Development of Disease Management Standards of Practice
Adopting “State of the Art” Clinical Technology
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Patient Satisfaction
Admission Within 24 Hours of Referral
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Agency Performance Incentives
for all Staff
Design a Comprehensive Agency-wide Incentive That
Will Unify the Agency Culture
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Administrative and Financial Outcomes
– Timeliness of OASIS Submissions, RAPs, Signed Orders,
End of Episode Billing (no recoupments)
– Achieving Planned Costs per Unit of Service
– Achieving Planned Process Productivity
– Reduced Absenteeism – Sick Days
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Increased Referrals
– New Referral Sources
– Additional Referrals from Existing Sources
The Financial Manager’s Assessments
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Incentives Effects on Clinical Productivity
and Case Capacity
Incentives Effects on Support and Business
Office Staff Productivity
Clinical and Financial Outcomes vs. the Costs
of the Incentives
Assess, with Clinical Management, overall
Staff Receptivity
Recruiting Alternatives
Develop a Promotional Brochure for the
Incentive Plan
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Organization’s Website
Distribute to the Staff during the Introductory
Phase
– Encourage Staff to Talk to Their Friends
» Recruiting Bonus plus Added Incentive Compensation
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Creative Advertising
– “Attention Grabber”
» Remember---”Where’s the Beef”?
– Outcomes and Rewards
Alignment of Incentives
VNA of Greater Philadelphia
The original Compensation Plan design presented to
District 1199C of National Union of Hospital and Health
Care Employees, AFSCME, AFL-CIO included:
1.
2.
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6.
Per Visit rates for Admissions (Evaluations), Re-certifications,
Resumptions, and Follow-up visits
Case Management rate for any patient case managed within a
calendar 4-week period
Weekend Differential rates
Inservice and Staff Meeting rates
Paid Days (Time) Off (PDO/PTO) rate at Average Daily Earnings
rate
Bonus Thresholds for Cases Managed, Visits and Outcomes
Alignment of Incentives
VNA of Greater Philadelphia
The original Compensation Plan design presented
To District 1199C of National Union of Hospital And
Health Care Employees, AFSCME, AFL-CIO included:
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All RN Participants are Exempt
2- Twelve week test periods (to be completed
before the CBA expiration) guaranteeing the
greater of earnings under the proposed Plan vs.
current hourly program.
No Overtime to Non-exempt RN staff
Alignment of Incentives
VNA of Greater Philadelphia
The original Compensation Plan design presented to
District 1199C of National Union of Hospital and Health
Care Employees, AFSCME, AFL-CIO included:
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New RN Clinical Primary Care Manager Responsibilities
– No. of Cases Managed
– Admissions, discharges, recerts and follow-up visits
– Definition of Case Management Responsibilities
» Communication (documented) with other disciplines
» Case conferencing and continual evaluation of progress
» Outcome achievement
– Timeliness of:
» OASIS and 485 POC
» Documentation
Alignment of Incentives
VNA of Greater Philadelphia
The Negotiations:
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Eliminated the Bonus for Outcome
Achievement
– Outcome achievement by Managed Care (Per
Visit) staff far exceeded Traditional Service
(hourly) staff
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Delayed the initial 12-week test periods
creating an extension of the CBA for one
year due to the length of negotiations
Alignment of Incentives
VNA of Greater Philadelphia
Does it Work?
YES!
And Here’s Walt Borginis …
He’ll Tell Just How Well!
The VNA of Greater Philadelphia
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Founded in 1886
Long term Union Contract for Nurses and
Home Health Aides in Traditional Home
Health Division
Overall FY 2009 Revenues of $30 million,
including $20 million for Home Health
Managed Care Home Health Revenues have
grown by 470% in 5 years
46% of area Medicare population is now
covered by Medicare Advantage plans
Negotiations
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Important to Establish that Management
is Concerned Over Staff Issues and Not
Attempting to Save Money
Try to Tie Proposals back to Staff Need or
Complaints on Existing Pay System
Be Prepared to Fully Explain your
Proposals with Detailed Support
Negotiations
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Keep the Overall Goals in Mind since
Negotiations Don’t Always Take the
Straightest Path to Conclusion
Rank the Items you want in Priority Order
so you can Value Issues that You may
Lose
Be Open to Trade-offs to Keep
Discussions Moving
Negotiations
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Be Ready to Calculate how Individual
Nurses will be Paid Under the New
System as Compared to Existing Pay
Practices
Make sure that Your Payroll System can
Handle all of the Changes on a Timely
Basis
Negotiations
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Weigh the Advantages of Having “Pay per
Visit” Negotiations Outside of the Normal
Contract Expiration Date. This will
Eliminate the Time Pressure to Reach an
Agreement by the End of the Contract,
but it does Increase the Time to get
Things Done since there are No Real
Deadlines.
Negotiations
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Be Open to Modifying your Proposals to
Reflect Suggestions from the Union
Negotiations Team
Make sure that your Labor Attorney
Constantly Reviews Changes with Respect
to Wage and Hour Laws.
Negotiations
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Union Philosophy of Treating Everyone
Equally Prevented the Establishment of a
Quality Bonus----- Sometimes Things that
Make Sense to you may Not get Adopted
“Pay per Visit” Not Acceptable to
Everyone
Guarantee Period Encourages Staff to Try
New System---”You Cannot Lose”!
The Results
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Total Cost per Nursing Visit (Medicare
Cost Finding Principles)for Fiscal Year
ended June 30, 2009:
Per Visit Staff
Hourly Staff
$115.23
$167.46
The Results
Average Visits Per Day Per Nurse
Q3
Q4
Q1
Q2
2008
2008
2009
2009
Hourly Staff
5.0
5.0
5.1
5.3
Fiscal Year 2009
5.0
Per Visit Staff
9.0
9.1
8.7
9.3
8.9
The Results
Average Number of Cases Managed
Per Nurse
Q3
Q4
Q1
Q2
2008
2008
2009
2009
Hourly Staff
27
22
24
25
Fiscal Year 2009
24
Per Visit Staff
39
37
37
38
37
The Results
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Home Health Compare Outcomes:
For the complete Fiscal Year ended
June 30, 2009, the Managed Care “Pay
per Visit” staff Out Scored the Traditional
Service “Hourly” staff in 11 of the 12
Outcomes
Source: Strategic Healthcare Programs, LLC
www.shpdata.com
The Results
Home Health Compare Outcomes:
Best Scores
Hourly Staff
Q3
Q4
Q1
Q2
2008
2008
2009
2009
3
3
1
2
Per Visit Staff
9
9
11
10
Source: Strategic Healthcare Programs, LLC
www.shpdata.com
Next steps
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Prepare for Next Contract by Soliciting
Opinions of Staff about their Concerns or
Comments on the New System
Monitor what the Industry Develops to
see if Changes are Needed