This article is sponsored by Axis Healthcare. In this Voices interview, Skilled Nursing News sits down with founder and president Tom MacDonald to learn why he founded Axis Healthcare, how the Patient-Driven Payment Model (PDPM) is impacting therapy utilization and the top three questions a SNF operator should ask to determine whether to bring therapy in-house.
Skilled Nursing News: You’ve had an interesting career with multiple stops. What are the most informative elements in your career journey that you draw from now?
Tom MacDonald: My first 25 years were spent in the banking and investment industry, working for large national firms as well as small private ones. Regardless of the size of the firm, there were two lessons that were critical to success. The first was the importance of keeping a close eye on the bottom line and evaluating the financial impact of all business decisions. The second was the importance of stepping back from the daily operations to take a strategic look at the business and for members of management to evaluate long-held assumptions and ask challenging questions about the future of the business.
I saw first-hand the impact of focusing on these areas, as well as what happens when there is a lack of focus on the financial drivers of a business, and no focus on strategic planning. At Axis Healthcare, we hope to bring support to post-acute providers by bringing strategies to improve their bottom line and a strategic focus to their business.
Tell us about Axis Healthcare. Why did you launch it, and what does it mean for therapy offerings in SNFs?
MacDonald: As the operator of a contract therapy company, we had the opportunity to help skilled nursing operators, but we only offered one solution. I wanted to bring a variety of solutions to skilled nursing operators that could help them meet the financial challenges they are facing. Axis Healthcare is focused on helping skilled nursing organizations increase revenue, reduce expenses and improve profitability through a variety of ways. We know that we can offer solutions that allow you to do this while continuing to provide excellent clinical care to the residents of their facilities.
The introduction of PDPM prompted many organizations to reevaluate their therapy program, and for those using a contract therapy provider to ask whether now was the time to take the program in house. There has been a growth in consulting firms that are touting the benefits of going in house by using their ongoing management services. This message is countered by contract therapy providers warning of the pitfalls of taking therapy in house.
Both sides raise valid arguments, but again they are promoting a single solution. At Axis Healthcare we are more interested in promoting the solution that is the best fit for the organization. We can provide a therapy model assessment, evaluating the financial impact of each model coupled with the operational challenges, and ultimately select the model that offers the greatest alignment with an organization’s goals and operational strengths. If in-house is the best fit, we can help them transition from contract to in-house and, if necessary, offer management services. If contract therapy is the best fit we can help them select the right firm and negotiate the best contract terms and pricing.
How does Axis help SNFs grow their revenue and/or reduce their expenses?
MacDonald: We begin by focusing on ensuring that a facility is properly reimbursed for the services they deliver, as oftentimes a facility leaves money on the table by not properly capturing all of their services. We evaluate their nursing and therapy documentation practices to identify opportunities to strengthen and improve. We also evaluate their end-of-month process to identify any problems with claims submission that could be negatively impacting reimbursement. Our goal is to identify and recommend process improvements that will lead to sustainable change to ensure a facility receives reimbursement that matches the care being delivered.
We also work with organizations to address the age-old challenge of building census. This challenge has been magnified due to the coronavirus. We begin by evaluating the data of referral flows from area hospitals to our client and the other facilities in the local marketplace. We then look at those facilities that are receiving more of the market share and identify ways to differentiate our client from the competition.
This involves the messages being delivered to the various constituents — including the hospitals, doctors and the local community. We want a message that resonates with what is important for each group. Finally we evaluate any processes, such as admissions, to see if there are improvements that will help us build census.
On the expense side of the equation, we focus on opportunities to reduce expenses related to therapy delivery. For an in-house program, this may involve evaluating processes that could negatively impact therapist productivity, which in turn drives costs higher. For organizations using contract therapy we conduct a therapy audit to review the delivery of services and compare to contract pricing to look for opportunities to reduce therapy costs. We can also help organizations negotiate more favorable contract therapy terms.
What are the top three questions a SNF operator should ask her or himself to determine whether the SNF should bring therapy in-house?
MacDonald: The first question an operator should ask is what the financial impact of such a move is, and how we can accurately assess that impact. Cost savings is generally the primary reason a company makes this type of move. It is important that an operator complete an accurate assessment of the potential cost savings before making a significant operational change. This requires the ability to understand how therapy drives reimbursement, coupled with the staffing and operational costs of managing an in-house program.
The second question is, how will we replicate the clinical, regulatory and financial expertise that our contract therapy company provides? The organization should be clear on who will lead this effort, their level of competency and how they will replace what the therapy provider brings to the table.
The last question may be the most challenging to answer. Do we have the corporate culture and operational strengths to manage a therapy program? Bringing therapy in house brings new recruiting, compliance and staff management challenges. If an organization is facing above-average turnover, or constant regulatory challenges, or lacks a strong level of corporate accountability, then bringing therapy in house, even with considerable cost savings, may not be the right move.
You’ve talked a little bit about PDPM. How do you see it impacting therapy in 2021?
MacDonald: The year 2020 was supposed to be the year of assessing the impact of PDPM, including how it impacted the delivery of therapy. We were barely five months into PDPM when the Coronavirus hit and shifted the industry’s focus to survival mode.
One of the questions going into PDPM was how therapy would change given that it was no longer a driver of reimbursement. Would therapy minutes be reduced from the days of RUGS? How much group and concurrent therapy would be delivered under PDPM? Would there be less of a demand for therapists, and if so how would that impact salaries? How would therapy support the efforts of MDS in capturing the services being delivered?
As the vaccine helps skilled nursing return to normal, and therapy returns to the therapy gym, I think SNF operators will have to begin to revisit the evaluation process to measure the impact PDPM has had on the delivery of therapy services. Operators should evaluate minutes delivered, patient outcomes and the use of group and concurrent therapy to ensure that it is aligned with the best interest of patients and the organization.
The other area that will need to be addressed is contract pricing of therapy vendors. PDPM required new pricing models, and there were many questions about the best pricing model, along with the terms within each model. I would imagine many operators put the evaluation of contract terms and pricing on the backburner this past year. Operators should dust off their contracts and compare the terms with the delivery of service they have received to see if they have the right pricing models and terms for their organization.
The skilled nursing industry battled census challenges last year. When you look at the state of those challenges, what are the best ways, in your view, that operators can rebuild census this year?
MacDonald: There will be a natural rebound to census after the vaccine is received by most Americans and life begins to return to normal. However, it is important to evaluate the factors that were driving census prior to the pandemic. Organizations should review the data to evaluate the referral flow of hospital discharges to area SNF’s. If they were not in the top five or ten, why not? How does their facility compare to their closest competition?
Organizations should evaluate what they need to do to differentiate themselves from the competition in the eyes of hospitals, doctors and the general public. What are the strengths of the facility that would appeal to each of these groups? Do they have all private rooms, which would appeal to families evaluating facilities for a loved one? Are their rehospitalization rates, or lengths of stay, lower than the competition, which should appeal to hospitals? What clinical programs do they have that might appeal to area doctors?
Once they have identified these strengths, they need to develop a plan to communicate it to the various constituents. There should be a specific communication plan for doctors, hospitals and the general public.
Finally, if they are not already doing so they should bring in leaders from every business area to discuss census development efforts and results. Declining census is not simply the problem for marketing and admissions — it impacts each and every employee in an organization. Beyond business leaders, every employee should be engaged in “selling” their facility to family, friends and members of their community.
There are three areas of focus that Axis helps SNF, one of which is management development and training. What are the pillars of Axis’s work in this area?
MacDonald: We believe that frontline managers are the most important managers in an organization as they drive employee engagement for the majority of a company’s staff. Ineffective managers can lead to lower employee satisfaction, which leads to higher turnover and less productive employees. Many frontline managers are selected due to a technical competency or tenure and become thrust into a role with little management training.
Axis Healthcare uses a behavioral assessment tool called DiSC® that provides insights into different traits that impact a person’s management style and competence. We use the results to help managers understand why some management tasks come easy while others don’t. Once they understand what drives their ability to perform various management responsibilities, we provide them with tools and strategies to maximize their strengths while overcoming those areas which are more challenging.
We also help managers understand the style of peers and their staff and how to adjust their approach when communicating based on the styles of others. This leads to better communication and improved team dynamics.
2020 was a year of unprecedented challenges. What are you most hopeful about for the SNF industry in 2021?
MacDonald: The coronavirus pandemic shined a light on the caring, courageous people who work in the skilled nursing industry. It also highlighted the financial challenges facing the industry and the need for better funding. While I am not sure there will be a solution to these funding challenges in 2021, I believe it will be a problem that continues to receive the attention of those in government at both the state and federal level.
I believe the pandemic will spur greater innovation within the industry. We saw some of this with the greater adoption of telehealth. There will be greater focus on the delivery of care for the elderly including the design of facilities and the use of technology in addition to long-term changes that will enhance the delivery of care.
Editor’s note: This interview has been edited for length and clarity.
Axis Healthcare was formed by a group of experienced healthcare professionals to provide post acute operators with a resource dedicated to helping improve clinical, financial and operational outcomes. To learn more about how Axis can help you, visit AxisHealthConsult.com.
The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more shaping their industry in a question-and-answer format. For more information on Voices, please contact email@example.com.