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How Providers Survive in a Cost Cutting Environment. Don Holloway, Ph.D. Co-founder of NIATx Don@Holloway.org. Better Title. How Providers Survive in a Revenue Cutting Environment. Don Holloway, Ph.D. Co-founder of NIATx Don@Holloway.org. Story: Mason City, Iowa.

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how providers survive in a cost cutting environment

How Providers Survive in a Cost Cutting Environment

Don Holloway, Ph.D.

Co-founder of NIATx

Don@Holloway.org

how providers survive in a revenue cutting environment

Better Title

How Providers Survive in a Revenue Cutting Environment

Don Holloway, Ph.D.

Co-founder of NIATx

Don@Holloway.org

story mason city iowa
Story: Mason City, Iowa

Mason City Iowa The outpatient program at Prairie Ridge Addiction Treatment Services increased its outpatient revenue by $381,000 per year.

Historically, the agency received 60% of its outpatient revenue through a block grant capped at 1,100 clients. The agency averaged 42% over-utilization of block grant funds for 5 years, resulting in up to $462,000 of annual unreimbursed care for 540 clients.

After joining NIATx, the program focused on increasing the other 40% of revenue, (third party, Medicaid, and client fees). Within 2 years, it increased this revenue from $627,000 per year to $1,008,000, an increase of $381,000 per year. The block grant is now 48% of outpatient revenue, down from 60%.

prairie ridge s problem
Prairie Ridge’s Problem
  • 540 clients served without payment of
  • $462,000
  • Would require a 58% cut in cost to break even, from $855 to $356 per client
what would you do
What would you do?
  • Renegotiate contract?
  • Reduce costs?
  • Turn clients away?
  • Make clients wait longer?
  • Terminate contract for block grant?
  • Change payer mix? “Cost-shift”?
summary
Summary

Increase Revenue

Referrer

Payer

Client

Provider

Reduce Costs

what s it like to be our client
What’s it like to be our client?

NIATx Aims

Referral

Reduce Waiting Time

1st Contact

Reduce No-shows

Assessment

Increase Admissions

!st Treatment Session

Increase Continuation Within One Level

4th Treatment Session

End This Level of Care

Increase Continuation Between - Transition

Start Next Level of Care

increase any admissions
Increase Any Admissions?

NIATx Aims

Referral

Reduce Waiting Time

1st Contact

Reduce No-shows

Assessment

Any Admissions?

Increase Admissions

!st Treatment Session

Increase Continuation Within One Level

4th Treatment Session

End This Level of Care

Increase Continuation Between Levels - Transition

Start Next Level

what s it like to pay us
What’s it Like to Pay Us?

Referrer

Payer

      • Women’s Adult
    • Women with Children
    • Battered Women
    • Men’s Adult
  • Boy’s Adolescent
  • Girl’s Adolescent
  • Parents
  • Veterans
  • Elder
  • Dual Diagnosis
  • Depression
  • HIV
  • Professional: Pilots, Drs, Rns, Clergy

Client

Provider

what s it like to pay us1
What’s it Like to Pay Us?
  • Are we paid enough?
  • FFS No Cap
  • FFS with Cap
  • Annual Budget
  • Fee per Client per Year
  • No Contract/Source

Payer

Referrer

  • Utilization Controls:
  • Limit to 10 visits
  • Prior authorization

Client

Provider

what s it like to refer to us
What’s it Like to Refer to Us?

Referrer

Payer

  • Referrals that start
  • clients in addiction
  • treatment are made by:
  • self
  • parents
  • family and friends
  • employers
  • Unions
  • schools
  • your staff
  • other health care providers
  • child protection services
  • judges, lawyers, and probation officers

Client

Provider

what s it like to refer to us1
What’s it Like to Refer to Us?

Referrer

Payer

  • Transitions from
  • the end of one level
  • of care to the start of
  • another are made by:
  • detox
  • residential
  • inpatient
  • partial hospitalization
  • intensive outpatient
  • outpatient

Client

Provider

aim become preferred provider for selected referrers
Aim: Become Preferred Provider for Selected Referrers

Referrer

Payer

  • Identify Referrers
  • Invite One Referrer to Join You
  • Form a Joint Change Team
  • Invite Referrer to Participate in a Walk Through
  • Agree on Aims
  • Establish Baseline Data
  • Identify Barriers and Opportunities
  • Test Promising Practices
  • Sustain Improvements
  • Invite Another Referrer to Join You and Repeat

Client

Preferred

Provider

how will we know we re preferred
How will we know we’re preferred?

Referrer

Payer

Client

  • # of referrals will increase
  • % of referrals admitted will increase
  • % of revenue from selected payers will increase

Preferred

Provider

what changes can we test
What changes can we test?

Tailor brochure for referrer

too many referrers do not have written materials with directions and guidance for clients to use to contact addiction treatment

Assign each referrer one person to contact for all their referrals

too few referrals are made, and when they are, too few end in admission

Guide referrers to make appropriate referrals

too many referrers do not know when or how to make a referral

Encourage referrers to make 1st appointment while referrals are still in their office

too many clients are not ready, willing or able to make initial contact or appointment on their own

Continue on next slide . . .

what changes can we test1
What changes can we test?

Continued . . .

Acknowledge all referrals

referrers need to be reminded about your services – one way is to send a thank you note

Keep them informed about “their” client

to the extent confidentiality is not broken

Visit referrers periodically and ask “What’s it like to refer a client to us?”

Stay at top of referrer’s mind

you are easy to forget

Offer specialized services, e.g. elderly

funding from current payer sources is saturated

how can we sustain our preferred status
How can we sustain our preferred status?

Referrer

Payer

Client

  • Assign each referrer one person to contact for all their referrals
  • Visit referrers periodically and ask “What’s it like to refer a client to us?

Provider

summary1
Summary
  • Selectively contract - change payer mix
  • Selectively strengthen existing relationships and build new ones

Increase Revenue

Referrer

Payer

Client

Provider

  • Reduce Waiting Time
  • Reduce No-shows
  • Increase Continuation

Reduce Costs