Outpatient Physical Therapy Case Study

Overview:

Management at a local hospital was concerned with operations at an outpatient location providing Physical, Occupational, and Speech Therapy due to an increase in staff turnover and productivity issues, missed appointments, and a growing backlog of patients who need appointments. Pathstone Partners was brought on to develop detailed findings about the current state of operations, establish strategies to increase staff productivity, and reduce patient backlogs and the current 30% patient no-show rate. The outpatient facilities hours are M-F 7:00AM – 7:00PM, Sat 9:00AM – 5:00PM.

Pathstone Approach:

Pathstone evaluated several different key areas to determine key strategies and anticipated benefit throughout the engagement.

First, management interviews and department walkthroughs were conducted to collect qualitative and quantitative information about the general management of the department and current pain points. The team heard that there is difficulty scheduling current FTEs with different start and stop times has led to many FTEs falling short of their full-time status. The team also observed that scheduling tends to taper off in the afternoon, with 1:00 – 3:00pm having the lowest backlog time.

Staff schedule reviews and staffing to demand analyses were conducted to further dig into operational challenges. Findings showed that staffing is not equally allocated throughout the week, PT/PTA ratios vary by day, lunches are scheduled at the same times, and staff generally arrives 30 minutes prior to appointments on any given day. Assessment times are currently scheduled randomly throughout the day, and PTAs are not “first up” for non-assessment scheduling. Furthermore, busy days and non-busy days are currently staffed similarly, creating challenges.

The Pathstone team leveraged this information to make several recommendations to the hospital management team. First, we recommended expanding Saturday hours to both allow staff to work up to their full FTE status and to accommodate the current patient backlog that usually builds on Saturdays.

Additionally, patient scheduling adjustments, weekly (and daily) staffing to demand processes, and skill mix realignment has led to significant improvement for the outpatient facility.

Impact:

By revising staffing schedules and developing assessment blocks where PTs are available, the facility increased throughput by 10%, and created 6 more appointment slots per week. Double scheduling patients during high no-show times (weekday mornings), adding a 24-hour auto-dialer to remind patients vs. the current 72-hour manual reminder process, and adding a $50 no-show penalty saw an additional 15 appointment slots created per week and reduced the vacancy rate from 30% down to 5%.

As the outpatient facility settles in with these new processes, staff turnover decreased resulting in $100k of wage savings, utilization (+10%), revenue (+10%), and productivity (+15%) all increased, and the hospital system achieved a total financial benefit of $350K.

Key Takeaways:

Scheduling, Scheduling, Scheduling: A significant portion of the facilities’ operational difficulties could be boiled down to misaligned schedules, from patients to PTs and PTAs. Breaking down the various scheduling components led to opportunity identification across each stakeholder, while also uncovering synergies between them.

Look Inwards First: It can be tempting to look at external factors or the need to bring in new staff to fix existing problems. By focusing internally, the outpatient facility was able to achieve significant financial benefit without any impact to its current staff. If an assessment has never been done, optimization efforts tend to be very effective, often providing critical insights into day-to-day activities that may otherwise go unnoticed for long periods of time.

Flexibility: To maintain improvements and identify new opportunities, it is critical to continually monitor and improve upon Key Performance Indicators (KPIs) that have been studied for this facility. Setting up processes to adjust staff schedules that align with changes in patient demand patterns will ensure this facility continues to operate at maximum efficiency for years to come.

____________________________________________________________________________________

One of the more complex components of running a medical practice is managing your organization’s medical billing process. With thousands of potential codes for different diagnoses and procedures, on top of the numerous payers in the market, having the ability to effectively manage billing is a key driver of success in today’s healthcare industry.  

There is no “one-size-fits-all” solution as it relates to medical billing; however, the two primary options for a healthcare organization are in-house billing and outsourced billing. There are three overarching considerations when evaluating whether to implement in-house or outsourced billing: 1) the cost, 2) an organization’s capacity to execute billing, and 3) maintaining confidential health services while billing [1]. Evaluating the cost implications of your selected billing option is critical. For small clinics, there may not be enough revenue generated to cover the fixed costs of billing. It is important to do a cost-benefit analysis to ensure that the clinic can expect a net income [1].  

Whether or not your organization elects to keep billing in-house or outsource billing, a handful of important billing activities must be maintained internally. As an organization, you are held accountable for submitting accurate and timely billing information to the outsourced billing agency or to individual third-party payers. The organization is also responsible for insurance verification, patient registration, and coding [1].  

Finally, it is of utmost importance to have clear written billing policies on how to manage bills and balances to ensure private patient information is managed appropriately.  

In-house billing includes the staff of a clinic or healthcare organization being responsible for all aspects of revenue cycle management. They submit claims to a clearinghouse, directly to Medicaid, or to the insurance company for reimbursement. They also set charges, collect patient fees (copays and deductibles), and manage the accounts receivable [2]. In-house billing allows for more visibility over the billing process, high flexibility, and increased control over patient accounts [2]. However, in-house billing includes high upfront expenses for labor and technology, ongoing training needs, and high dependency on your staff members [2]. 

Many healthcare organizations opt to outsource their medical billing to a third party. These third-party companies typically take a percentage of a healthcare organization’s collections as payment for managing many aspects of a revenue cycle, on top of recurring monthly fees [3]. Outsourced billing has countless benefits which may include having more experienced parties managing your billing, advanced software options, and saving on internal time and resources [2]. However, outsourced billing requires your organization to maintain and oversee contractual obligations to the selected third party and outsourcing gives your organization less control over patient accounts [3].  

The decision in outsource medical billing versus billing in-house is very dependent on your organization’s needs and resources, and each option has its own benefits and disadvantages. 

Works Cited 

[1] Software Advice. “In-House or Outsourced Billing – NCSD.” In-House or Outsourced Billing, 2015, https://www.ncsddc.org/wp-content/uploads/2020/01/In-House-or-Outsourced-Billing_STDTAC1.pdf.  

[2] Casarez, Carlos. “In-House vs. Outsourced Medical Billing: Pros and Cons.” Continuum, 17 Aug. 2021, https://www.carecloud.com/continuum/in-house-vs-outsourced-medical-billing-pros-and-cons/.  

[3] Software Advice. “In-House or Outsourced Billing – NCSD.” In-House or Outsourced Billing, 2015, https://www.ncsddc.org/wp-content/uploads/2020/01/In-House-or-Outsourced-Billing_STDTAC1.pdf.