STANFORD BUSINESS SCHOOL OF GRADUATE STANFORD JING 1991 CASE: OB-91(A) DATE: 07/15/15 HUNTINGTON HOSPITAL (A): EMPOWERING STAFF That's why I've been in this business for as long as I have, because I love helping people. Medical billing and collecting is with the patients, and they get bills, and EOBs from their insurance that they don't understand. It's nice to have someone on the other end who's patient, and who will walk you through what you're looking at. I think all of us enjoy helping the patients. That's why we're here. ―Terry Craft, Unit Lead, Commercial Billing & Collections Kim Markey began as executive director of revenue cycle at Huntington Hospital (HH) in November 2012. Located in Pasadena, California, HH was a 625-bed non-profit regional medical center that was named among the top-performing hospitals in 2012 by U.S. News & World Report. To further HH's focus on high-quality, patient-centered care, Jim Noble, executive VP-COO/CFO, was looking for a change in direction, particularly in the Business Services Office. Instead of a manager with a day-to-day mindset, he was looking for someone with a strategic approach. Accounts Receivable (AR), a key billing metric, was at 64 days— Markey explained that while that was fine, “for an organization like this, it should really be in the 50's, and because of the payer mix and where we're located, it should really be in the low 50's." Noble hired Markey with the mandate to do whatever was needed to improve performance. Markey's long-term vision involved re-examining the revenue cycle and the hospital's processes to ensure that HH would become a stronger performer. She needed to get her metrics under control as a first step before transforming the departments she oversaw—Admitting, Business Services, Data Services, Medical Records, and Revenue Integrity—into truly patient-focused business centers (see Exhibit 1). Her approach was that revenue cycle was not a science but Davina Drabkin and Professor Sarah Soule prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. Unless otherwise noted, all information and quotes in this case come from the following interviews: Lisa Marshall and Matt Warfield, Groundswell Software, January 6, February 25, and April 22, 2015; Kim Markey, Executive Director, Revenue Cycle; Terri Craft, Commercial Unit Lead; Pilar DeMonica, Medi-Cal Unit Lead; Armine Kalanjian, Medicare biller/collector; David Trepp, Managed Care Senior Analyst; Lillian Taruc, Medicare Unit Lead, March 10-11, 2015. 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Huntington Hospital OB-91A p. 2 rather followed the 80/20 rule-80 percent of the money resided in 20 percent of the patient accounts. Thus, “if I want to drive my AR days down, that's where I need to focus. It's very metric driven." The next step would be removing barriers for patients and evolving the mindset of her departments so that HH would become known as “an organization that is going to work with you to help you understand what's going on [and how to make sense of the bills and EOBS¹ that you get]." BUSINESS SERVICES OFFICE Guided by this mandate for change, Markey was deliberate in how she introduced herself to the Business Services Office staff. At her first staff meeting, she talked about who she was, her experience, and her approach and policies. She emphasized that she was very transparent—she was a horrible poker player—and that she would not make change just because she could. Instead, she was going to observe and be thoughtful so that she could make the right changes. Markey found the staff to be warm and welcoming. She quickly understood, however, that a sense of doubt and anxiety existed in the office and that people were worried about getting in trouble. Line staff in particular seemed to feel that leadership did not pay much attention to them and provided little direction on how to improve the business processes. Markey reflected, “I think they were looking for a change. I think they were looking for something different. And I could feel that walking in." I don't know how to explain how you know it, but you just kind of know it by the way they approach you. When they're sitting down talking to you, they're open.” Staff Perspective Pilar DeMonica was a senior lead biller/collector for the Medi-Cal team and reported to the government manager, one of three managers in the Business Services Office. She felt that the group did not have a cohesive working relationship largely due to the approach of the manager at the time. Staff did not feel that they could raise issues with that manager because “you were questioned as to why you wanted to do this, and how come it had to be done [a certain] way." It had gotten to the point “where [staff] just didn't say anything. They just did what they needed to do in their daily work. They felt like no matter what they went to the manager for, it would not be received well." Armine Kalanjian, who had been at HH for eight years and was a biller/collector for the Medicare group, talked about how morale was low and the atmosphere was tense and stressful. "It was just a lot of nitpicky, tedious, ... and unnecessary things that caused tension or frustration or friction.” One example was the restriction on communication: “We [had to] go through our manager if we wanted to speak to anybody, and only through email. We couldn't just go to someone's desk to speak with them.” Kalanjian also talked about drowning in paperwork— many spreadsheets and processes that were very time consuming. When members of her group explained that the spreadsheets or processes were ineffective, the response made her feel like “it was one of those 'sit down...do what I say and that's it' work places." Kalanjian summarized 1 Explanation of Benefits—a detailed form explaining how a patient's insurance was applied to a specific claim. Huntington Hospital OB-91A p. 3 that “communication was broken all throughout [the department] and I think it was because there were so many restrictions on us.” DeMonica described the sense of frustration and tension in the Medi-Cal office. "When [that] manager wasn't there, everyone worked well together. When she was there, the tension was there. It was frustrating because they felt like they were being watched." Her group was always described as being very quiet and DeMonica explained why: “We only asked questions amongst one another when we needed to." Several staff members described the processes in place as ineffective and inefficient. According to Kalanjian, “There were zero policies and procedures for doing anything in the business office. Everything was through e-mail and even that wasn't a guarantee that that's the way you should do something." Procedures and guidelines would change depending on which manager she asked. A typical example was clocking out to go to a non-work hospital event: “One manager would tell their employees, 'You must clock in, clock out, do this a certain way.' Another manager would say, 'No, you must do it like this.' And then another manager would say, 'No, like this.' All the employees were confused. 'So what do we do?"" DeMonica recalled how the Medi-Cal team manager would call quick five-minute meetings to explain how something should be coded: “It was all done verbally. When you see a 179 on a claim, make sure it's a 171 or 172 so it gets billed out correctly." The Medi-Cal staff made a point to ask that all instructions be put in writing or at least in an e-mail “because they were afraid that if they did it [on verbal directions] the manager could come back and say ‘I never said that. Trust was low, a factor that contributed to the overall sense of anxiety within the team. Due to confusion and miscommunications, the manager asked DeMonica to take minutes for every meeting: “I would write up the minutes and give them to her and she'd say, ‘well, that's not what was said.' Or, ‘that's not really what I meant.” """ When asked about the source of the tension, Kalanjian speculated that it trickled down from upper management. “It was probably a lack of trust from management to the employees. Not all employees are perfect so if they do something wrong, [management] put that restriction on all of us." It seemed to her that control was the issue. David Trepp, commercial billing and collections manager, explained that managers also had to follow specific guidelines. Trepp confirmed that the atmosphere was one where “ideas were not given much thought." As a manager, he felt that he was expected to be in control of his team and that much of his time was “spent on 'did they get here on time, did they clock in on time, did they clock in at their desk or in the parking structure.” Commercial Insurance was the largest of the three groups, bringing in approximately 55 percent of the revenues that the billing department collected. Trepp's feeling was that "the goal was to manage productivity and make sure everyone was productive the entire time they were working in order to achieve cash goals." Managing productivity was manifested in many different ways. Trepp described the time and attendance policy: “You could clock in five minutes before you started and [clock out] five minutes after the time you left but you [only] had that five-minute leeway." He explained that the goal of the policy was to ensure that when in the office, employees were supervised by a manager at all times. Lillian Taruc, a biller for the Medicare team, commented: “If you took your break at 9:30 every morning, and you happen to be on the phone and you forgot to take Huntington Hospital OB-91A p. 4 your break because you're calling to get your claim paid, [managers] say 'how come you didn't e-mail me that you're going on break late?”” To Taruc, it felt like management was more worried about managing breaks than helping employees achieve their goals and get the job done. She had initially started on the Medi-Cal team before moving over to Medicare. New to the Medicare group, Taruc needed guidance and was surprised to find out that her manager was not able to offer it: “If you're new to the job you think that your manager knows [how to train you], but you realize after two weeks that ‘oh, she doesn't.' And so you work with your team instead of working with [your] manager. The Medicare [group] has a close bond because we rely on each other so much.” Taruc would bring issues to her manager's attention with the thought that addressing them would help the group increase revenue collection. She felt that the response, instead, was often based on distrust, as if the manager's primary concern was that employees would speak out against her. “They've entrusted us to collect millions of dollars and yet they cannot trust us to talk to somebody regarding our issues. You know, how can I go to a war without weapons? You need to give me tools. You need to give me guidance so I can move these accounts and get [them] paid and move on to the next one." Terry Craft, an insurance collector for the Commercial Billing and Collections group, talked about the frustration that staff felt. “If we needed to change a process or had any questions regarding a process, we'd go to our manager. But, sometimes you just hit a wall...[and issues]...did not get resolved. We kept reviewing and revisiting the same issues over and over and over, and things would... continue to pile up. You...felt like your hands were tied." Kalanjian summed up the feeling on the Medicare team: “Why bother?” Sometimes Craft was able to find a way to get beyond the barriers. “They were using a general letter for correspondence with patients and insurance [companies] and it had too much information on it. It was not what was needed specifically for the patient or the insurance [company] so I just drafted up my own. I didn't know if I was going to get in trouble or what.” When her colleagues complained about problems with the correspondence letter, Craft shared her letter, explaining that she was getting immediate responses from insurance companies and avoiding mix-ups that were common in the past. Her teammates adopted the letter as well and when her manager eventually came across it, “he never said anything. He just let them use it.” Craft noted that there were many times when she felt that her manager was also hampered by the lack of flexibility. When faced with being written up for taking her lunch one minute late, she assured her manager that she would still be taking the full 30 minutes. According to Craft, the response was, “I know. But this is coming down from my manager." She also talked about restrictions that her manager faced in adjusting larger accounts since he needed to wait for approval from upper management. “He couldn't do anything…..until they allowed him to adjust [those] claims." The rigid culture and focus on managing productivity did little to inspire maximum effort from employees. Taruc explained, “When your hands are tied there's not much you can do. And yet they expect the maximum productivity. It's just not going to happen.” This played out in meeting each employee's weekly quota of closing out 150 accounts. “You want [to close] 150 account, oh, start with the low dollar amount. If productivity is [measured] by the number, then Huntington Hospital OB-91A p. 5 it's not about quality. So, you could have 150 accounts with $0.02 and $0.05 and you just say ‘small balance adjustment.' You're done for the day. It's not quality." Small Changes Employees were optimistic about Kim Markey and what she could do for the Business Services Office. Taruc's first impression was that help had arrived―Markey was innovative and “a fresh breath of air.” When Markey said that she had an open door policy, Kalanjian was impressed to see that her office door really was open: “She is caring and open and approachable.” DeMonica was struck by the impact that Markey had just by saying hello to employees in the hallway. Markey would “have a conversation with everybody and even chitchat about her chickens. It made staff feel very comfortable." According to Taruc, “Those first two months [Markey] said hello to us more than the previous director in my ten years here." DeMonica thought it was a good thing that Markey wanted to observe before making any changes because “she was able to base her own perceptions and her own judgment on what she saw versus what the managers would tell her." What Markey immediately noticed was “a sense of fear of doing things and getting in trouble.” She likened the atmosphere to being in grade school where students could only color on a certain page and only within the lines. Staff members were professionals and Markey quickly began to make small changes to treat them as such. One of the first was changing the five-minute clock- in-early rule. Staff would stand outside in hallway holding their bags or sitting on the floor, waiting for the office doors to open at 7:55 am, and, as Markey explained, “that is just not the way that I want to come into the business office. There's no reason why they can't come in, put their stuff down, and go to the cafeteria. I don't want people to feel they have to ask permission to come to work." Markey pushed to have the doors opened at 7:30 am and “that change alone skyrocketed [the employees'] approach. It was incredible. It made them so happy." Trepp, a manager, was aware that one of Markey's goals was to improve morale. Early on, she implemented a suggestion box and Trepp recalled, “as a management team, we all went ‘oh, here it comes. Be careful what you wish for."" Markey encouraged suggestions around how things could be done better and received many notes that focused on improving morale. Craft commented, “I could tell that she was listening to the people. She was observing what was going on in the office as she's walking through. She can see what the morale is, how people are feeling, how they're working, so I could tell that she was focused on improving the morale as a whole." The suggestion box showed Craft that Markey “wanted to hear from us and see what the needs were." Markey would share suggestions at the department meeting and give her responses. Changing the five-minute clock-in-early rule came out of the suggestion box as well as a move to flexible start and end times. Craft added, "At some point, people started indiscreetly complaining about management styles.... [Markey eventually] had the managers get up and read what was in the suggestion box and address it if it pertained to something they should be handling."/n INSTRUCTIONS Using the template (Week 6_Discussion_Culture.pptx Download Week 6_Discussion_Culture.pptx Open this document with dissect the components of Huntington Hospital's Business Services Office's culture - in terms of behaviours, values, and mechanisms displayed (based on the case: Huntington Hospital Empowering Staff (A).PDF Download Huntington Hospital Empowering Staff (A). Upload your response and briefly explain its contents in the text box. How does it differ from a Process Improvement Culture (PIC) as described in the lecture? Respond to the discussion prompt in approximately 300 APA Style and fill the given template