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5 ways to modernize the business side of your business

April 29, 2016
by Brian Albright
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Nearly three years ago, New York City-based Institute for Community Living (ICL) went through an extensive rebranding and restructuring process. This was not just a marketing exercise; the company put a new focus on metrics to improve its clinical operations and to support its long-term financial future.

“We looked at how we can support our business in an empirical way,” says president and CEO David Woodlock. “That’s inextricably linked to our mission. We instituted improvements and strategies to better focus the business side of our operation, but all of that is built on how to deliver on our mission.”

Mental health and substance abuse treatment service providers are under new competitive pressures that are forcing them to address business and operational challenges in ways that they hadn’t before.

In states where Medicaid has been expanded, the mix of clients has shifted dramatically in a short time. The Centers for Medicare and Medicaid Services (CMS) and private payers are shifting reimbursement models, which will require new levels of data collection and documentation. Providers might need to prove their worth to earn status in more restrictive payer networks. And finally, some providers might be eyeing a merger or partnership, or might want to attract venture capital in order to expand.

In all these cases, providers will need to have the tools, technology and staff required to adapt to this more market-based landscape where they might be competing for the attention of clients, payers and investors—some for the first time.

“Payers are more value- and outcome-focused, and there’s a new consumerism among clients,” says Tom Schramski, president of Tucson-based healthcare M&A advisory firm Vertess. “Executives have to understand that and be able to convey the value of their treatment programs to the marketplace.”

For ICL the organization not only ramped up its data collection and analytics efforts, the company also invested in making its facilities more welcoming, implemented new staff training initiatives and added primary care services at some sites via a partnership with a federally qualified health center (FQHC).

“That’s very deliberate,” says COO Chris Copeland. “It changes the very nature of the way our services are seen, so they are more relevant and accessible to a broader range of people. That’s how manage care organizations are going to want services delivered.”

And the payer mix seems to have some crossover when it comes to being a provider of choice.

“Depending on the government to roll clients to you because you have services is not part of the equation anymore,” Woodlock says. “You have to maintain your focus on recovery, but also operate in a more retail-like environment where payers either purchase your services or they don’t.”

There are a number of critical operational areas in which behavioral health services providers might need to modernize their operations.

 

1. Go big or go niche

There has been a wave of mergers in the industry, most driven by the realization that in order to thrive in this new economic environment, providers will need to provide greater scale or distinct, high-quality, niche services.

“You have to have the money to expand and keep the facilities where they need to be in the market in order to retain staff and grow programs,” says David Chernof, vice president of quality assurance and standards at Bridgeway Behavioral Health in St. Louis, and Behavioral Healthcare editorial advisor. “Or you have to be the provider in the market for a particular service or demographic.”

Bridgeway recently merged with Preferred Family Healthcare a move that expanded the care portfolio for both companies. Bridgeway offered a wide scope of services, while merging with Preferred Family gave them the scale to succeed.

“Look at things through the eyes of the clients,” Schramski says. “What can you do to make sure they get the services they need? That’s where the focus should be.”

Providers will need to offer a continuum of services as close as possible to the client, either through expansion or partnerships.

“Managed care organizations are looking for that continuum of service,” Schramski says. “You’re in a much better position if you can put together all of those services or affiliate with other providers who can help you do that.”

2. Remember that data is critical

Both ICL and Bridgeway have emphasized collecting quality and outcomes data, which will be critical for improving care and for new reimbursement models in today’s era of healthcare reform.

“You have to be able to gather and pull that data out in a useable format, and understand what the data is telling you,” Chernof says. “That’s what most agencies are struggling with. For so long, treatment agencies didn’t really deal with data. Everything was anecdotal.”

At Advanced Recovery Systems in Ford Lauderdale, Fla., metrics have been part of the mix since the company was founded. CEO Mitchell Eisenberg, MD, says his team set out to standardize policies and procedures across facilities, establish a compliance and audit program, and measure outcomes. As part of that effort, the company established an aftercare program that provides longer term monitoring, which can be used for better outcome analysis.

“A fair amount of our clients are staying with us because they know recovery is difficult,” Eisenberg says. “We are getting very good data that way. You can differentiate yourself that way, by having that record. It’s not easy, but you have to be diligent and look at the technologies that allow you to get that level of sophistication and monitoring.”

Evidence-based performance and data analytics that demonstrate such quality will be paramount.

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