Revenue optimization despite COVID-19
“We need to bring documentation and service provision back together”
For 17 years, they have been the scapegoat when hospitals report financial losses: the diagnosis-related case flat rates (DRG).
Since their introduction in January 2004, many hospitals have readily attributed their economic difficulties to them. From the beginning, DRGs were under general suspicion. They were said to create false incentives, strengthen the focus on economic goals, and negatively impact patient care and the daily work of medical staff. There have been repeated loud calls for the abolition of the flat-rate system, and now this perennial issue is current again: At the end of last year, health system researcher Prof. Michael Simon recommended replacing the flat rates with other financing approaches in a study funded by the Hans Böckler Foundation.
Under-documentation instead of underfunding
Prof. Katrin Rothkopf does not join this chorus of complainers: “There are certainly things that could be questioned and improved in the DRG system,” explains the head of the Revenue Management Service Line at WMC Healthcare GmbH consulting firm in Munich. However, one cannot claim that these are generally not cost-covering. At the Institute for the Hospital Remuneration System (InEK) in Siegburg, great effort is made to accurately represent medical service provision. But when you look at how the service events are documented in hospitals, it’s often completely absurd. Of course, she can also substantiate this bold claim: “According to the service documentation, 70 percent of patients over 65 treated in maximum care hospitals have no or minor comorbidities or complications – even at a very advanced age.” Nevertheless, patients with a severity level of 0 and 1 stay in the hospital for an average of more than 7 days. “We don’t have underfunding, we have under-documentation,” the revenue assurance expert sums up. This is known and proven by studies, but is usually accepted as is. “The impact on the financial result is considerable.”
Documentation is separate from service provision in Germany
“When Prof. Rothkopf presents these figures, you can literally watch as hospital managers and chief physicians have an aha moment,” confirms Christian Eckert, one of the managing directors at WMC Healthcare. Because, of course, no one treats perfectly healthy people. The paradox lies solely in the documentation and coding, which often does not take into account the important secondary diagnoses. Especially with regard to length of stay, the pressure that one believes to feel on the wards is therefore often self-imposed. “Older patients in particular often have several comorbidities and therefore need longer to be able to leave the clinic. If this is coded correctly, these costs are also covered in the DRG system.” But that’s apparently not so simple. “Through the use of coding specialists, we have separated documentation from medical service provision in Germany,” explains Rothkopf, who was able to gain a lot of clinical experience as a specialist in anesthesia and intensive care therapy before focusing on the strategic and organizational realignment of hospitals.
Complex cases could not be represented in this way, as no one could document so many details.
Knowledge of case flat rates should be part of medical education. Doctors, coding and nursing staff, and depending on the case, for example, midwives or social service employees must talk to each other again. Emails could not replace such team meetings. Ideally, they should meet twice a week and go through the cases together. “The secret is regularity. This way, the time spent is manageable.” But beforehand, all those involved must also be given the necessary knowledge of case flat rates. Because this has not been part of medical or nursing education so far. “Private practitioners know exactly which code they can bill for which patient, because that’s the only way they can run their practice economically. In hospitals, however, there is still a need to catch up.”
Their approach is simple and enables a relevant improvement in revenue with very manageable effort. For example, in one clinic, they were able to increase the Case Mix Index by 15 percent in just one year using this method. When starting a restructuring project in a hospital, it is often requested to first address the coding. ‘Those who increase revenues need to make fewer cuts,’ says Prof. Rothkopf. ‘This way, you improve the result without hurting anyone.’