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It's a good idea, but will it work? How to evaluate a new service
Look closely at market, staff, and management to predict success
As home health agencies prepare for success within a pay-for-performance environment, ideas for new services or redesigned existing services are popping up everywhere. Seminars, audio-conferences, and newsletters articles describe successful new services implemented by agencies throughout the country. Although these successes are thought-provoking and inspiring, experts interviewed by Hospital Home Health remind managers to evaluate a new service's potential for success from the perspective of their own agency, their marketplace, and their patient population.
Start your evaluation of a new idea by looking first at your ownership and your organization's financial goals, suggests Jill Rumberger, PhD, assistant professor of health administration at Pennsylvania State University at Harrisburg in Middletown. "A home health agency that is owned by a hospital may develop a service that is focused upon meeting the hospital's need to discharge certain patients as opposed to create a new source of revenue," she explains. "The most important focus for another agency might be a positive financial return in a specified amount of time," she adds.
Whatever objective you have for the new service, there are specific steps to take to evaluate the program's chance of success, says Rumberger. Although you want to evaluate the potential financial success of the program, the first three steps are not strictly financial, she points out.
1. Evaluate your market
"Is there a market for this service?" asks Rumberger. "This is the first question you should ask yourself," she says. Based on your current patient population, your community, and your referral services, look at who would use the service, she suggests. Is there enough demand for the service to guarantee a continuing patient base?
Don't forget to look at your competition in the marketplace, says Rumberger. "If another agency is offering the same or a similar service in the community find out how they are doing," she says. While the other agency may not share specific numbers and data on their program, talking to mutual referral sources, peers in the agency, or other people in the community will give you an idea of what the other agency is doing and how well it is received. Even if another agency offers the same program, it doesn't mean that you should not proceed with yours, points out Rumberger. "
Competition can be a good thing because it means that there is a market for the service and one agency may not meet all needs," she says. "If there is a competitor in the marketplace, you have to determine if there is enough demand to justify two agencies offering the service, or you have to differentiate your service from the other service,".
When management at the Home Nursing Agency in Altoona, PA, developed a chronic disease management program for cardiac and congestive heart failure CHF patients, cardiologists and surgeons in the area were consulted to find out what services would improve home care for their patients, says Kim Kranz, RN, MS, vice president of operations for the agency. "We were already caring for many of their patients but we knew we had to change the way we provided that care in order to reduce re-hospitalizations and visits to the emergency department," she explains. (For more information about the agency's disease management program, see box below.)
Agency reduced re-hospitalization rate by 7%
Disease management program improves follow-up
The Centers for Medicare & Medicaid Services' (CMS) pay-for-performance initiative is making home health managers look closely at their outcomes to determine the best ways to improve performance in many areas.
When the management staff at Home Nursing Agency in Altoona, PA, noticed a 24% rate of re-hospitalization for cardiac and congestive heart failure (CHF) patients, they also recognized an opportunity to reduce the re-hospitalization rate by developing a cardiac disease management program. Less than two years later, the re-hospitalization rate dropped to 17%.
"We noticed that there was no difference in re-hospitalization for patients who received two visits per week compared to patients who received three visits per week, so we knew we had to look at issues other than number of visits," says Kim Kranz, RN, MS, vice president of operations for the agency. In order to improve the continuity of follow-up with the patient, a combination of telehealth and telephone calls from nurses was added to the protocol for patients with cardiac problems or CHF.
"We also improved our patient education materials to more clearly describe symptoms and their causes," says Kranz. By improving the patient education and reviewing it frequently, patients were able to better understand how things such as diet or fluid intake affected their condition.
Staff education sessions explored cardiac disease and CHF in more detail and focused on day-to-day activities that can improve a patient's outcome and avoid re-hospitalization, says Kranz. "Medication management is a critical issue for these patients so our nurses can call a doctor of pharmacy with whom we have an agreement for consultation," she says. Nurses generally call the pharmacist service when patients are on more than eight medications to determine what risks they may have and to ensure that the medications are not duplicates, she explains.
Pillboxes were purchased with funds from the agency's foundation to help patients better organize and manage their medications, says Kranz. "This is a simple tool we can provide to help patients," she adds.
Cardiac and CHF patients were chosen as the focus of the disease management program after reviewing OASIS data, points out Kranz. "We knew we had a large patient population with these diagnoses and we also knew that this group represented a large percentage of re-hospitalizations," she says. Talking to physicians gave Kranz a chance to find out what other agencies might be doing for cardiac patients and to find out what physicians thought about services that home care could add, she says. "It also made physicians aware that we were looking for ways to be proactive and produce better outcomes for their patients," she says.
Another part of your market analysis should include how you can leverage existing services and patients to promote the new service, says Rumberger. "How many current patients or their family members would be eligible for the new program? she asks. "We struggle to market ourselves in-home health agencies," she admits. "Word-of mouth advertising is so important, but we hesitate to tell our patients and families about new services," she says. Even if the patient or family member doesn't want to become a telehealth patient, they might tell someone else that your agency offers the program, she points out.
2. Scrutinize management
"Many times home health agencies will try to add a service for which no one on the management staff has experience," says Rumberger. Even if you have staff members who can provide the care, it is important to have someone managing the program who understands all of the business and clinical components, she explains.
Components of Kranz's disease management program include telehealth, improved patient education, focused staff education, and access to a pharmacist for consultation. All of these components were in place at the agency so managers and staff members were familiar with them but the services had not been pulled together to address a specific patient population, says Kranz. "We had already invested in some telehealth equipment but we expanded the program to include all cardiac and CHF patients," she says. "We had also had a pharmacist available for consultation but that service was rarely used by home health nurses,". Because the agency had all of the individual services in place, in addition to management staff with cardiac care experience, there was no need to look for someone with experience for this program, she adds.
If you are looking at a new program for which you don't have management experience, look for someone to bring into your agency to manage the program, suggests Rumberger. While the expense of a new manager or a consultant will add to the initial cost of the program, it might be the key to ensuring long-term financial success for the program, she adds.
Experience with managing a nurse practitioner program also was helpful at Visiting Nurse Service of New York, admits Joan Marren, RN, MEd, operating officer of the agency. "Our agency has had a nurse practitioner [NP] program since 1998 but the NPs worked only with long-term care patients in our managed Medicaid program," she explains. In 2005, an NP was added to the home health staff as part of a program to improve assessment and care provided during the transition from the hospital to the home, she says. Because nurse practitioners were not new to the agency, managers understood the role of NPs, billing rules related to NPs, and the advantage of having access to an NPs' experience and training for all home health staff members who provided care to patients, she says.
3. Review operations' requirements
The next step in reviewing a potential new program is to determine if your staff already have the key skill sets to provide the service, says Rumberger. "Is it a complex program that requires new skills your staff doesn't possess?" she asks. If the answer is yes, how easily can you find or train staff to provide the service? she asks.
"Most of our nurses already have medical/surgical or intensive care experience, so it was just a matter of additional staff education to improve their knowledge of cardiac or CHF patients," admits Kranz. Key points in staff education included facts that showed that visits alone didn't reduce re-hospitalizations for cardiac patients, but more frequent follow-up through phone calls and telehealth monitoring were effective, she says. Nurses learned what to ask and how to evaluate a patient in a phone conversation, so that nurses and patients were comfortable with this type of follow-up, she adds.
In addition to reviewing staff requirements for the program, look at equipment or supply needs as well, suggests Rumberger. Remember that supply or equipment maintenance costs must be built into the financial projections as ongoing expenses, she adds.
4. Project financial return
"The financial step is fun," says Rumberger. "Throughout all of the previous steps, you've identified what you need and what it will cost to get the specific equipment, staff, or training for the new program, so this final step is just compiling everything you've already collected" she says. At this step, you answer questions about what it will cost to equip and staff the program, as well as what it will cost to market and manage the program, she explains. "This is the step in which your operating budget is developed".
Also at this step you determine how long you think you will require to need a profit on the program, Rumberger points out. "Have a specific timeframe to present to your board so that they know to expect a one or three year period before profits are seen," she says. "If you negotiate those expectations upfront, you won't find yourself being told to shut the program down after only six months because administration or the board expected immediate profit"
If your new program is capital intensive and requires purchase of new equipment or extensive staff training, it will require a longer period of time to recoup investment costs, so be sure to give the program time to succeed, suggests Rumberger. At the same time, it is not a bad idea to build in a timeframe for review, she says.
"You can also plan to review the program's performance in six or 12 months to determine if it is performing as expected," says Rumberger. "If you find that outcomes have not changed, or expected reimbursement is lower than projected, you have an opportunity to identify problems and make changes," she says.
If your primary goal was something other than financial profit, quantify how you'll measure that outcome as well, she suggests. Specify how frequently you will report decreases in re-hospitalization, or visits to the emergency department, if that is your goal, she says.
Although your evaluation of a new program's potential for success should be orderly, thorough, and as accurate as possible, Rumberger has one warning; "We tend to stumble when we over think any new program". "
Once you've planned the specifics of the program and negotiated the financial issues with your board, go and implement it," she says.
Kranz agrees and admits, "I'm a risk-taker. Once I have the basic information I need, I trust my instincts and take a leap of faith."
For more information about evaluating a new service, contact: