C O L L A B O R A T I V E C A S E M A N A G E M E N T

A View From the Field:

Managing the Capacity Crisis — A Physician Advisor’s Perspective
by Richard Doering, MD, FACS

Our frequent experiences with seemingly omnipotent insurance bureaucracies notwithstanding, there is still little doubt that physicians con-
tinue to carry more clout than any other individual players in the healthcare delivery system. Medical staff members, individually or togeth-
er, routinely influence hospital budget decisions, operating room scheduling policies and even hiring decisions at hospitals, big and small,
all over the country. At its worst, this clout can be bullying and petulant, a force behind sub-optimal decisions. But, at its best, the clout of
physicians can be a powerful ally to improve access to and quality of healthcare in a community.

Two years ago, at Hoag Memorial Hospital, a capacity crisis was quickly
becoming just such a threat to healthcare access and quality of service on
which the community depended. A team that included the physician advisor
to case management, administrators, case managers, operations and care-
giving staff, led a variety of initiatives during the two. This is a 6% savings
(5,900 days) in annual bed days.
CASE MANAGERS HOLD THE KEYS
A capacity crisis is a financial, quality and service crisis, in which patients
are “stacked up” in the emergency department (ED) or moved to less than
optimal placements while awaiting the appropriate bed. This is both a
problem of matching patient need with appropriate level of care, and of
patient throughput. Therefore, case managers hold many of the keys to
unlocking solutions.
The first stop in seeking solutions must be the hospital case managers and
bedside caregivers. Brainstorming with nurse and social work case managers
will identify a long list of opportunities to reduce average daily census. Many
opportunities require the cooperation or participation of the medical staff.
THE HOAG EXPERIENCE
The team – officially called the Capacity Management Committee –
focused on developing initiatives to improve patient throughput and prevent
unnecessary admissions. While some changes the committee recommended
might be taken for process improvement or physician-led reasons at other
institutions, the fact is that the number of new initiatives and the pace at
which they were introduced at Hoag was driven by their potential to help
manage capacity. Because each was hospital-driven rather than medical staff
originated and led, there was the potential to have less than optimal support
from the medical staff for needed changes. Providing the leadership and
influence with the medical staff is a critical role the physician advisor can play.
Some of the initiatives that contributed the most to reduction in
unnecessary admissions and the savings of annual bed days are highlighted
here. The first two are described in detail following.
1 A partnership with a nearby skilled nursing facility reduced alcohol
admissions, which accounted for over 2,000 bed days per year, and
created an average savings per patient of $2,000 per day and $60,000 per
month, despite the fact that Hoag covered the cost of all unfunded
patients transferred to the partner facility.
2 A bi-annual “Physician Clinical Activity Summary” is regularly provided
to the medical staff sections with the highest utilization, reporting their
ALOS, total charges, pharmacy charges and ancillary charges for their top
five risk-adjusted admitting diagnoses in a blinded comparison to their
peers. The report alone, with no additional “counseling,” was responsible
for a 4% decrease in risk-adjusted ALOS in the first six months.
3 A new treatment protocol combined with an outpatient treatment center
and home health nursing allows patients presenting in the ED with
cellulitis or venous thrombosis, who previously would have been
admitted, to be sent home and managed on an outpatient basis.
4 New outpatient management clinics have been created. For example,
CHF patients had the highest readmission rate, so a new clinic was
started to provide patients with scales, patient education and a variety of
mechanisms for regular follow-up by a fulltime nurse practitioner in
coordination with their physicians.
5 Hospitalists now take all unassigned medical patients who must be
admitted through the ED, replacing the panel of internists that took ED call
as a practice-building strategy. This accomplished two important things –
first, the patient is more quickly admitted when necessary and second,
the hospitalists have proven their success in reducing LOS across all
diagnoses. In return, all patients without a regular physician are referred
at discharge to the panel of internists for follow-up care upon discharge.
6 New clinical pathways were introduced to reduce practice variation. As
an example, aortic aneurysms treated with stent grafts were reduced
from a typical stay of 5 or 6 days to an average of 1.5 days; ICU bed days
were routinely avoided for carotid endarterectomy patients, reducing
charge variation, which had been between $14,000 and 25,000 and ALOS
between one and five days, with no difference in outcomes.
A WIN-WIN COMMUNITY PARTNERSHIP
As a community hospital, Hoag’s ED is routinely the last stop for patients
with serious alcohol problems. These patients often had to be admitted for
lack of an appropriate discharge environment and occupied an acute bed for
more days than was medically necessary for that same reason. More often
than not, these patients were unfunded. The cost to Hoag Memorial Hospital
was incurred in both unpaid bills and the use of an acute bed for a patient
who did not need acute care.
The solution lay in an opportunity to reach out to a community partner
that might benefit while providing Hoag with a solution. A social worker
recognized the potential solution, which was facilitated by a physician-led
partnership. A neighboring skilled nursing facility had capacity for more
patients, so an agreement was struck to transfer all medically stable alcohol
patients to the nursing facility. The physician advisor and Medical Director of
the skilled nursing facility determined appropriate clinical criteria for transfers
and agreed upon the appropriate level of care to be provided to transferred
patients. Patients with underlying psychiatric issues would be triaged to
contracting inpatient psychiatric facilities for detox and psych-management.
Hoag reimburses the skilled nursing facility for the costs associated with
all unfunded patients who are transferred. Despite the expense, the cost of
these patients is still less than the unreimbursed expense of their acute care
at Hoag. The increased availability of acute beds for patients who truly
require an acute level of care also offsets the expense.
THE POWER OF PEER PRESSURE
In an interesting appeal to physicians’ innate desire to excel, one initiative
has required no additional work other than putting data in the doctors’ hands
bi-annually. With the assistance of a strong decision support system and staff,
a Physician Clinical Activity Summary reports the risk-adjusted ALOS, total
charges, pharmacy charges and ancillary charges for the top five admitting
APR-DRGs for several of the medical staff sections. Physician leadership was
critical to “sell” the effort. The medical staff members’ had to have confidence
that the data elements are reliable and confidential.
A sample of the report is shown below. The physicians are each assigned
a numeric code, known only to them, to facilitate the blinded comparison of
(continued on page 8)

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practice patterns. Because the data are risk-adjusted, the comparisons are This frustration arises at least in some part because of the professional
universally accepted as fair. The reports were first introduced to the Internal power dynamics that are institutionalized in our healthcare system. Those
Medicine section. Within six months, a reduction in ALOS of 4% encouraged dynamics are no secret to any nurse, social worker, physician or other
the expansion of this initiative to the Pulmonology, Cardiology, Oncology and healthcare professional. Physicians can use their influence in the system
General Surgery sections, where a similar response is taking place. to become allies of the case-management professionals who seek to
improve patient care while preserving hospital resources. It is a most
SUCCESS IS A COLLABORATIVE EFFORT obvious role for a physician advisor already working within the case
Excellent case managers are frustrated every day, at every hospital in management function. However, it should not be viewed as a sole
the country, in their efforts to improve the quality of care for their patients. proprietorship. I have never met a case manager who doesn’t welcome
physician collaboration,
Physician APRDRG Charge and ALOS Comparison vs. Dept wherever it is found.
High Charge and Low ALOS High Charge and High ALOS Obs ALOS = Observed ALOS
2.0 Obs Chgs=Expected Charges Dr. Richard Doering is
Exp ALOS=Expected ALOS a vascular surgeon at
1.8
Exp Chgs=Expected Charges Hoag Hospital in
1.6 O/E ALOS=Observed/Expected ALOS
O/E for Chgs=Observed/Expected Newport Beach, CA
ALOS Index (O/E)

1.4 Charges where he also serves as

1.2
Expected based on severity weighted Physician Advisor to the
averages
1.0 Comparisons made against internal
Case Management
0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 medicine Drs. department. From 2000
0.8
Sources: to 2002 he was the Chief
3M Analytical Workstation
0.6
Sunrise Decision Support Manager of Staff and Chair of the
0.4 Size of Bubbles in Comparison Chart are Collaborative Practice
proporational to volume Committee. Dr. Doering
0.2
Outliers that had higher than national will be a co-presenter on
0.0 norms for length of stay for
Low Charge and Low ALOS Low Charge and High ALOS APRDRG/severity subclass were excluded the topic of Early
Morning Discharge:
ALOS Index (O/E) How to Maximize Bed
APR-DRG #
•463 •775 •383 •812 •720 •249 Capacity by Creating a
Less Stressful, More
YOUR TOP VOLUME APR DRGS (IN WHICH YOU HAD AT LEAST 3 CASES)
Efficient Early Morning
ALOS CHANGES Discharge Process at the
¶APR DRG DESCRIPTION CASES OBS. EXP. O/E SAVED DAYS OBS. EXP. O/E SAVED CHGS
463 KIDNEY AND UT INFECTIONS 14 7.14 4.62 1.55 (35.4) $14,638 $11,211 1.31 ($47,979) 11th Annual Clinical
775 ETOH ABUSE & DEPENDENCE 13 3.24 2.36 1.37 (11.5) $6,037 $5,026 1.20 ($13,136) Case Management
383 CELLULITIS 13 5.00 3.20 1.56 (23.3) $11,305 $6,865 1.65 ($57,710)
812 POISONING & TOXIC EFFECTS OF DRUGS 12 2.04 1.59 1.28 (5.4) $5,099 $4,447 1.15 ($7,825) Conference in Orlando,
720 SEPTICEMIA 11 6.86 7.14 0.96 3.1 $20,234 $23,499 0.86 $35,920 FL held April 28th
249 NONBACTERIAL GASTROENTERITIS
ABDOMINAL PAIN 11 2.94 2.21 1.33 (8.0) $7,645 $6,774 1.13 ($9,578) through May 1, 2004.

Improving Hospital Quality Data: A Case Management and Medical Records Partnership (continued from page 4)
demonstrating the impact of accurate documentation on individual cases
through one-to-one meetings on the units or even in the medical office. In
California, almost all health plans do quality profiles of individual physicians as
well as hospitals. It is not unusual for a physician with a low overall severity of
patients but a high LOS or utilization of resources to be removed from a health
plan’s panel of preferred providers. Physicians are beginning to understand that
an accurate portrayal of the acuity level of the patient data used in his or her
individual quality profile is as important to them as it is to hospitals.
Secondly, the hospital CEO must be engaged as a champion as well. DRG
assurance must be on monthly management and administrative team
agendas. Departments throughout the hospital need to know and participate
in their respective roles to help the program succeed.
As important as the first two lessons, it is imperative for program
sustainability to keep documentation improvement as an organizational
priority. At Sutter, the accountability for coders and case managers has been
formalized in their annual goals and evaluations. New staff members are
trained and annual updates are provided for all staff. An annual audit is
conducted, providing an external review of processes and opportunities for
continuous improvement.
The benefits for both case management process improvement and the
quality profiling are well worth the effort. From a case management perspective,
the primary benefit was that the program helped our case managers focus on
their core functions and bring skill sets to a new level. This program has
improved our ability to justify length of stay and utilization of resources. As we
begin year three, we plan to expand the program to commercial patients.
From the perspective of the medical staff and hospital administration,
the primary benefit has been to improve our quality profile and enhance
coding compliance. Now, we only hear “our patients are sicker” when the
data demonstrate it.
Linda Van Allen is the Utilization Management Executive for Sutter Health
Sacramento Sierra Region in Sacramento, CA. She has 25 years of
progressively more responsible leadership positions, which include nursing,
case management, community health, managed care and administration.
Her responsibilities include case management and social work services
supporting four hospitals with an average daily census of over 800. In 2003,
the hospitals were awarded the inaugural Franklin Award of Distinction by
ACMA and JCAHO.