CorrectCare

Examining Cost: How Improving Operations
Can Boost Your Bottom Line (part 2)

by Rick Morse, MBA, CCHP

This two-part article discusses how to analyze a correctional health services program in order to improve quality and reduce costs. Part I focused on the financial component and the three primary cost drivers of the health unit: labor, off-site care and pharmaceuticals. Part II will look at the other two major components of the health program: operations and results. In addition, a case study will illustrate how to apply some of the basics.

Focus on Operations
There are three primary areas to look at when assessing your operational processes: (1) what’s coming in the back door, (2) access to care and (3) follow-up and monitoring. From the big-picture perspective, these are the most important factors in ensuring a safe and cost-effective operation. I have proven time and again that doing what it takes to succeed in these areas justifies the expense and ultimately reduces overall costs.

• The back door (mostly for jails): Knowing what is coming in the back door refers to your intake/admission process. If you do too much screening and complete the physical exam too early, you may be inefficient with costly resources by focusing on admissions that may be gone in a matter of hours. Not enough screening and you may end up having to send an inmate to the hospital along with a security detail at the overtime rate. In NCCHC’s 2008 Standards for Health Services for jails and prisons, standard E-04 Initial Health Assessment offers two options to allow for safe and cost-effective screening for your facility.

• Access to care: The ability for an inmate to access care is paramount. This happens primarily (although not exclusively) through the sick-call process. Significant attention should be paid to timely triage, scheduling and no-shows. Problems in any area will cue you to barriers to care. Litigation expense can be magnified if unresolved barriers to care exist and played a role in a negative outcome.

• Follow-up and monitoring: When a provider orders care, whether it’s a lab, medication, x-ray or referral, there must be a system in place to ensure it happens. Letting ordered care fall through the cracks is unsafe, results in negative outcomes and increases grievances and risk for litigation. Also, when a lab or x-ray report is negative, make sure you have a process to notify the inmate. You’ll be amazed at the overall improvement in inmate perception. If your staff can’t stay on top of things, then take appropriate measures to address those problems.

Focus on Results and Satisfaction
This component also has three primary focus areas: a quality program, controlled grievances and litigation, and content staff.

A quality program has many components. Accreditation and a good CQI program are two you can put your arms around. High management interest in both of these areas will ensure a proactive approach to health care delivery and will identify costly concerns before they bleed your budget.

Grievances typically align with operational disparities whether or not they are recognized as significant by management. Even though grievances may be exaggerated, poorly described or inflammatory, cumulatively they provide a clear view of inmate perception of the overall health care program. There are exceptions, but litigation typically reflects the problems repeatedly reported by multiple inmates. Paying attention to inmate grievances is one of the best cost-saving measures you can take. You’re less likely to get sued and you won’t have to spend hours of your time responding to grievances.

Staff turnover is another expensive problem. Always know the condition of the troops. Manage by walking around, see firsthand what’s going on. Take care of your people and your people will take care of the mission. Disinterested and problematic personnel not only drain your energy, they hurt your whole team. Think of the anti-tree hugger’s slogan: “50 years to grow, 50 seconds to slash down.”

Examining the Data
We’ve only highlighted the major points and barely scratched the surface, but it’s time to move on. Let’s look at a case study. (This is a high-level overview not intended to address every potential variable. It is not to imply that any particular employee classification is solely responsible or problematic.)

This scenario involves an 850-bed jail. The medical budget for the eight months ended August 31 is $3,731,900, but the actual year-to-date expenditure is $3,829,533—this is $97,633, or 2.62%, over budget (i.e., a negative variance). Let’s examine the individual indicators (see table) to see if we can identify one of the major culprits.

Looking first at labor, the budget is on the high end of the benchmark average for a jail, and there is a significant negative variance between the budget and actuals. This reflects a 40% turnover of nursing staff, mostly LPNs, and the costs of using RNs and agency nurses to do LPN work, as well as overtime and the cost of orienting new hires.

Turning to off-site care, the financials are nearly on target, but are at a slight negative variance (1.87%). Actual emergency department trips and hospital days also exceed the budget. On-site care is budgeted adequately, but YTD costs are actually under budget. Some specialty clinics have been scheduled inconsistently. The orthopedic specialist now visits only about 50% of the time and doesn’t want inmates coming to his office any longer. This is resulting in more ED trips. There is a direct correlation between the decreased on-site specialty care and the need for more off-site care visits. This also has led to increased officer overtime associated with transportation and security details.

In pharmacy, the use of a capitated contract means there are no additional charges for medications ordered as long as they are on the formulary. There is an extra cost for nonformulary medications, but these are reasonably well-controlled. YTD pharmacy expenditures are just slightly over budget.

All other line items have produced an overall eight-month positive variance of $4,574.

Operationally, the medical intake process is very thorough and the jail tries to complete the entire screening and physical within 24 hours. But medical record filing is consistently four to seven days behind, and the clerks (3.0 FTEs) have a two-month backlog of medication administration records (MARs) waiting to be filed.

There are about 45 inmate grievances per month. About 75% of them concern medication issues, waiting for sick call or follow-up appointments, and missed treatments.

Applying the Principles
The jail administrator is not happy with this health services budget YTD or the department in general. No one can seem to get a handle on what’s wrong. Why are they having problems?

If you focused on the medication numbers, you’re on target. At a jail of this size you would expect to see 775 to 975 medications ordered each month (0.95 to 1.15 per inmate per month). But the actual number exceeds 2,400 medications per month (2.85 per inmate). This volume of work is overwhelming the medical staff and has the residual effect of things falling through the cracks. This, in turn, leads to high LPN turnover and the labor costs discussed above.

How time consuming is medication administration? Time studies I’ve performed have found that one unnecessary med order three times a day for 30 days requires 104 minutes of nursing time to complete: 8 minutes to note the order and create or annotate the MAR, order the meds, receive the meds and place on carts; 90 minutes to pass the med 90 times; 3 minutes to transcribe the new MAR at the end of the month and pull the old MAR for filing; and add another 3 minutes per month to figure out one housing change per inmate. This is an eye opener for most people so time it yourself if you find it hard to believe!

For inmates admitted to the jail and then released in two to three days, it takes about 15 minutes of nursing time to note the order, make a couple of passes, return the meds to the pharmacy and pull the MAR. This is why I say that 23 unnecessary med orders tie up 40 hours of nursing time.

Clearly, overutilization of medication can become a big problem fast. The effects move down the line as the medical record clerks become inundated with documentation to file. Nurses are so busy passing meds and taking off orders that on some days there isn’t enough time for blood pressure checks, treatments, seeing all sick-call requests or following up on no-shows. Housing changes also wreak havoc with inmates not receiving meds. Ultimately, the flurry of grievances reflects these problems.

There are many reasons for overutilization of meds, including practitioner preference. In this scenario, though, let’s look at the intake process. At intake, the jail immediately performs receiving screening, health history, oral screening, mental health screening and evaluation, intake labs, and medical classification and disposition. This is a good thing. But doing the physical examinations within 24 hours presents some complications to other routine medical operations at the jail.

These providers spent a great deal of time doing physicals on inmates who were out of the system within 72 hours. This is not the most efficient use of provider time. Providers also performed sick call during this exam, bypassing the normal triage process. This led to an overall slowdown during the physical exam that kept the providers from effectively handling the more pressing needs of the general population.

As a result of doing sick call at intake, many medications were ordered for inmates who, again, were released quickly. Too much nursing time was spent managing these meds and, consequently, other critical nursing needs were sometimes overlooked.

Because of the capitated pharmacy contract there is no financial downside to prescribing these meds, so looking at pharmacy cost data would have thrown you off the trail. However, heavy utilization might result in a price increase when the contract is up for renewal.

Commonsense Solutions
The jail took several measures to address these problems. They reevaluated the need to do all physicals within 24 hours and now do so only if the screening process indicates a clinical need for an urgent evaluation. I recommend timing routine physicals for 48 to 72 hours postadmission. (This also allows for the PPD test results to be read at that time.) The providers were coached to focus on the “mission” of the physical and to have the inmate submit a request for sick call. Now, with more people leaving the system before the physical must be performed and by eliminating sick call at intake, providers have more time to focus on inmate needs. This also has reduced the initial number of medication orders.

Pharmacy reports are now generated monthly to enable providers and management to review and analyze utilization. Providers strive to reduce prescribing of unnecessary medications and to order meds for once-a-day dosing (or twice a day when appropriate). A keep-on-person program was initiated to permit inmates to maintain limited amounts of certain medications, thus lessening the time spent in passing meds. In addition, temporary help was used to assist nurses with med pass and other activities until utilization was brought under control, as well as to get medical records caught up.

Finally, efforts were undertaken to stabilize on-site specialty care, which also reduced correctional officer overtime. for off-site care.

— About the author: Rick Morse, MBA, CCHP, is the founder and senior consultant with Morse Correctional Healthcare and Consulting in Sparks, MD, and Richmond, British Columbia, Canada. He has spoken on this topic atNCCHC educational conferences. To reach him, e-mail rick.morse@verizon.net.

[This article first appeared in the Winter 2009 issue of CorrectCare.]