These are interesting times for health care. One organization is experimenting with sending primary-care doctors into homes of seniors while asking visiting nurses to make fewer house calls.
And the moves appear to make financial sense over the long haul. Seriously.
Mark Oshnock, CEO of Visiting Nurse Health System of Atlanta, is no stranger to numbers-crunching. The former head of Arthur Andersen’s health care consulting business took over the non-profit organization six years ago, when it was deep in debt. A month ago, the final installment of the $20 million credit line was paid, freeing it to spend more of its resources on patients.
Oshnock, 55, has been able to grow the non-profit to a projected $55 million in revenue this year, from $32 million in 2004, by employing strategies used by for-profits. For example, he retreated from non-core operations, such as renting medical equipment. Instead, he focused on two key businesses — providing nurses and physical therapists to seniors leaving the hospital and providing hospice care for those with less than six months to live.
About two-thirds of the 660 employees are nurses or therapists. They treat about 20,000 metro area patients — and they have been immune to layoffs.
“Since I’m here, we’ve not cut anyone on the clinical delivery team,” Oshnock said. That’s because demand keeps rising, while the cost of hiring and training a new employee is expensive — as much as $30,000.
As the biggest non-profit for home health in the area, Visiting Nurse competes against two major for-profits. That’s where the experiments come in.
Oshnock said health care reform is putting pressure on Medicare, the biggest source of revenue, to cut costs. Nationally, Medicare is planning to cut its reimbursements for home care by 5 percent in 2011, followed by a 4 percent decline in 2012 and a 3 percent drop in 2013, he said.
To deal with the cuts, Oshnock is starting a call center, staffed primarily by nurses, to see if the average of 15 home visits following a hospital stay by a senior can be cut to 13. Service would be supplemented by phone calls and telemedicine, which tracks patients through monitors in their home.
At the same time, Oshnock is beginning to tackle another problem — seniors with several chronic issues who do not have a primary-care physician. When things go from bad to worse, they end up in the emergency room, driving up costs to an average of $40,000 annually for this group, Oshnock said.
“We believe we can drive down those costs significantly,” he said.
Visiting Nurse just started to send a primary-care doctor to visit such patients. The goal is for the doctor to assess the patient and set up a treatment plan. A nurse practitioner also is involved.
At first, the idea will lose money, with donors to Visiting Nurse picking up the $250,000 annual tab, Oshnock said. But he hopes that will change, as Visiting Nurse uses more doctors in homes and Medicare embraces the idea.
“In order to reduce overall health care costs, Medicare will need to get smarter,” Oshnock said. “We’ll need to use more doctors and nurses in the right settings to deliver the highest quality and most cost-effective care.”
- Henry Unger, The Biz Beat
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