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Whether you’re a new grad or a seasoned rehab clinician, you’ve run into the productivity paradigm. Healthcare organizations, hospitals, and clinics push productivity. They focus on productivity. They require productivity.

But in case you haven’t heard, productivity —according to businessdictionary.com— refers to “a measure of the efficiency of a person, machine, factory, system, etc., in converting inputs into useful outputs.” So how does this apply to healthcare? Well, it seems that according to healthcare administrators, third-party payers, and other C-level executives, clinicians convert inputs (time) into useful outputs (patient outcomes). As we’ll discuss in a bit, this view of healthcare leaves clinicians feeling the squeeze. Clinics and clinicians feel they have to pump large volumes of patients through their doors and treatment programs to be “productive”. This is largely due to the fact that reimbursement for many healthcare services is based on the clinician’s time —usually measured in treatment units. We’ll discuss that a bit farther down, but first we’ll go over the idea of productivity in healthcare.

Productivity vs. Production

To understand how healthcare has arrived at its current position, we need to understand the whole idea of productivity vs. production. As mentioned above, productivity refers to the efficiency of converting “inputs” to “outputs”. Well how do you measure that in healthcare? Healthcare —for the most part— is not based on products, but rather services. The inputs are somewhat intangible. Clinical skill, knowledge and expertise are combined to deliver a service —or treatment— to a customer (or patient).

On top of that, the “output” that we’re talking about refers to a treatment outcome, not a product. If a clinician applies years of clinical experience and expertise into a treatment plan for a patient experiencing chronic pain, what is there to measure? Well, this conundrum has led many administrators, payers, and policy-makers to measure the clinician’s time (input) and the “objective” (measurable) outcomes like range of motion (ROM), strength, and the like.

What that means is, when trying to measure “productivity”, many healthcare administrators, third-party payers, and policy-makers revert to measuring time. The problem is by measuring time, we fail to measure what truly matters. What do we really care about in healthcare? Do we care about how much time a clinician spends with a patient (productivity)? Or do we care about the actual result of that treatment (production)? The answer is most definitely the latter.

Quantity vs. Quality

By focusing on time-based productivity measures, we miss what we truly want to be assessing. We miss the quality of the healthcare or service being provided. The reason that the healthcare industry began focusing on time-based productivity was because payers began using time spent with a patient as a measure of the quality or necessity of care. For example, a patient who received 90 minutes of therapy in a day clearly required a higher level of care than a patient who only received 30. What payers decided was that they would pay clinicians based on the time they spent with a patient. I guess they thought that by structuring reimbursement this way, would incentivize clinicians and organizations to see more patients more efficiently. It actually created an incentive to see patients for a longer period of time than was necessary.

Time and ProductivityIt became a game of quantity vs quality. If a clinician gets reimbursed for the time he or she spends with patients what is more likely: 1) he or she will spend an appropriate amount of time with each patient and see as many patients as possible in a day or 2) he or she will try to get “the most” out of every patient interaction to cut down the number of notes and administrative time needed? The answer is clearly number 2. If given the choice, it’s easier to see less patients for longer periods of time, regardless of need, because it means less administrative time.

Tying Reimbursement to Productivity

This is precisely where it all went astray: when reimbursement became directly tied to the number of treatment units —or time— a clinician spends with a patient. This fundamentally changed the dynamic of healthcare. Instead of incentivizing clinicians to be efficient and treat as many patients as possible by seeing each for only the amount of time necessary, the opposite became the norm. Incentivized by this method of reimbursement, it is more advantageous to see less patients for a longer  period of time. You end up with the same amount of revenue, with less administrative burden.

This also created an environment where healthcare organizations, clinics, and hospitals began seeing clinicians as revenue producers that needed to be squeezed for every available drop of revenue. This is typically done by increasing productivity requirements for individual clinicians and departments.

Why Do We Get Paid?

Here’s the problem with that system: BUSINESSES DON’T GET PAID FOR TIME! They get paid for the value we create, or the results we deliver. Time may be an “input” in that price equation, but businesses (and people) don’t get paid for that. Jim Rohn used to say, “You don’t get paid for your time. You get paid for the value you put into the time.” [1]

Think about it: you pay a plumber to fix a leak, whether it takes him an hour or 10 minutes. You pay an HVAC company to make your AC blow cold. What you pay for is the value that professional provided you. How valuable is cold AC? Well, here in the south, it’s pretty dang valuable. So I’ll pay an HVAC company $100 to come fix my system. If it takes 1 hour, I’m happy. If it only takes 10 minutes, I’m ecstatic! And this leads us to some of the negative side-affects of using time-based payment structures in healthcare.

Negative Side-Affects of Focusing on Time-Based Productivity

Productivity MetricsWe already touched on one of the major downsides of focusing on time-based productivity and reimbursement. Hourly pay incentivizes the lowest and slowest level of work for only minimally satisfactory quality. The reason is that time is the primary factor in this payment model. Time plays an overly-sized role, while completion or quality takes a back seat. As we discussed above, we don’t —or shouldn’t— be paid for our time. We get paid for the value we put into the time, or the outcome we produce. That’s why there has been increasing focus on outcome measures in healthcare —to make sure the time being spent is making a real difference. It’s also why Medicare is shifting to Merit-based Incentive Payment System (MIPS). By focusing on time instead of outcome, we confuse activity with accomplishment.

Where’s the Value?

Given the face of a changing healthcare landscape coupled with uncertainties about the future, many administrators, consultants and organizations have pushed metrics to measure clinician performance, or value creation. While these productivity measures are well-intentioned, they often fail to represent the true value of a clinician’s performance [2]. As mentioned above, many of these productivity measures calculate productivity —or value creation— as a function of time. But physiotherapists (PTs & OTs for those of us in the US) do much more than punch a time card for each patient they see.

The value we create through our clinical expertise and treatment impacts the daily lives of the patients we treat. Take someone who gets treated by a therapist for chronic low back pain (LBP) as an example. The patient comes in for treatment and is seen by a therapist for 54 minutes (4 billable units). Can we really reduce the value of treatment to the number of billable units —or time— that the therapist spends with that patient? Would that patient still be willing to pay the same price if the therapist was able to effectively reduce his/her pain in half the time (say, 30 minutes)?  The answer is, in most cases, “yes”. Just like with the AC example above, patients come to therapy wanting and expecting an outcome. They’ve carved time out their day to come into the clinic. In many cases, they want one thing: relief. And that is the value that clinicians bring to the table. We are able to leverage our knowledge, clinical expertise, and skills to bring relief to patients that come to see us.

How Much Can You Get?

In addition to the reasons above, time-based reimbursement also places increasing pressure on clinicians to “be productive”. Over the last 20 or so years, productivity requirements for staff clinicians continue to increase. At one point, clinicians were expected to be 80-85% productive. That means that they spent about 80-85% of their time in direct patient care. The remaining 15-20% of their time included administrative work, scheduling, and documentation. Now that number has increased to at least 90% in most settings. My first job as an Occupational Therapist required 92% productivity from its therapists. This leaves clinicians with less time to do other important work like preparation and records reviews, documentation, scheduling, and even research/professional development.

It also demonstrates an important concept: there is always an upper limit to the productive capacity of clinicians. Clinicians can only treat for a certain amount of time in a day. In an 8-hour day, that usually means roughly 432 minutes (90% of an 8 hours, or 480 minutes). Regardless of how many patients a clinician sees in a given day, time always constrains how much long a clinician can spend with patients. As we’ll discuss below, this fact alone is reason enough to consider changing the way we measure productivity and structure reimbursement in healthcare.

Benefits of Forgetting Time-Based Productivity

What could happen if we forget time-based productivity in healthcare? What if we measured more than the time a clinician spent with a patient? As I’ll try and argue below, the changes to the overall effectiveness of healthcare services could improve. Untying reimbursement or payment from time changes the incentives that drive clinicians and organizations. Changing the focus from time and units returns the focus of healthcare to the patient and his/her unique situation and needs. Truly pricing healthcare services for the value they create improves revenue, efficiency, and impact of healthcare clinics and organizations. Let’s start with the incentive change created by paying clinicians for the job/service rather than time spent with a patient.

Incentives

As mentioned previously healthcare is a service. Like any service, it takes time to complete, but the outcome is what matters most. By reducing the payment structure to billable units of time, clinicians and organizations adjust their treatment model to maximize the revenue and reduce unpaid activities (this is what led to time-based productivity measures in the first place). Most clinics and organizations operate under this model now because that’s how they get paid.

Many of us who have worked as staff clinicians understand that the current time-based reimbursement structure does not fully capture or define the value that our services provide to patients, their significant others, the healthcare system, and society at large [3]. What time-based reimbursement actually does —as mentioned above— is incentivizes clinicians to spend more time delivering mediocre or unnecessary treatment.

However, when paid by the job —call it service-based payment or reimbursement— clinicians become incentivized to be efficient & effective. This may mean that a clinician actually spends less time with a patient while delivering equal or greater results. After all, if he/she get’s paid the same amount for the treatment, regardless of time, wouldn’t they want to provide the most efficient (quickest) treatment option available? Here’s a hypothetical example below:

Time vs Task

Time and ProductivityLet’s take frozen wrist as an example of what could happen if we paid clinicians for a treatment or task rather than the time they spent completing that treatment. Typically, when someone is referred to outpatient therapy to “improve ROM” to a “stiff wrist” following injury or surgery, that person is seen multiple times a week for 60 minute treatment sessions. But the decision to set treatment times at 60 minutes has more to do with reimbursement than clinical necessity. Other treatment options exist that require significantly less time and provide arguably better clinical outcomes.

For example, Draper showed in a 2010 article that 6 minutes of ultrasound followed by 10 minutes of wrist mobilizations and 20 minutes of ice could result in a return to normal AROM in just 6 treatment [4]. Now I don’t know about you, but 6 treatments that only last around 36 minutes sounds a lot better than 4-6 weeks of 2 treatments a week for 60 minutes each.

Just as a side note, under current reimbursement structures, a clinician can’t bill for 6 minutes of ultrasound, because it is less than 8 minutes —the threshold for a 15 minute charge. By changing the payment structure to a values-based, service-based, or treatment-based system, we free up clinicians to provide treatments like the one above. That could result in more patients receiving treatment and potentially experiencing higher quality clinical outcomes.

Focus

Now let’s take a look at what happens to the focus of healthcare and treatment delivery when we forget about time-based productivity measurements. We’ve all been there: a patient walks into the clinics and we think, “how am I going to get four units out of them?” It happens to every clinician at some point. Blame it on administration, management, or policies. The reality is that, when time-based productivity measures are the main KPI monitored by an organization, clinicians begin to see patients as walking treatment units. They forget about taking the time to dive into their unique circumstance and recovery journey. They simply want to make sure that they hit their 29 units for the day (90% productivity for an 8-hour day).

What happens when that incentive is removed? What happens when clinicians are measured not by how many treatment units they complete in a day, but how much service they provide in a day? That might sound like the same thing, but as we’ll discuss in a little bit, they’re vastly different. When clinicians no longer have to worry about counting minutes with patients, they can actually deliver the most valuable treatment option for that unique patient.

Take the example of frozen wrist above. A therapist that does’t have to worry about hitting 8 minutes for ultrasound, combined with 45 minutes of other treatment techniques (to hit the magical 53 minutes) can focus on delivering what that patient actually needs. Nothing more. Nothing less. We change the focus of healthcare from time and numbers to the people in our clinics and what they need to recover, not what we need to make productivity.

Revenue & the Bottom Line

What happens to revenue if we forget about time-based productivity measures? Well I think the case can be made that you may actually see an increase in revenue. In a world where time does not dictate reimbursement, clinics may actually be be able to earn more money and spend more time providing meaningful treatment. As an example, let’s look at a value-based reimbursement model. This type of model typically involves the clinic charging a fee for a treatment session, not charging per service. Many out of network or cash-based clinics operate under this type of payment model.

Revenue and ProductivityUsing the frozen wrist example from above, let’s say a patient comes to the clinic for a treatment session. The clinic charges $100 per treatment. The clinician completes therapeutic ultrasound (6 minutes), manual wrist mobilizations (10 minutes) and applies ice (20 minutes). Total treatment time: 36 minutes, less if the patient opted to ice at home or on the way back to work. For a 36 minute treatment, the clinic earns $100 (the rate for treatment).

It also means that the clinic is able to see more patients, since they can cut out the fluff and provide patients the most effective portions of treatment. Less time per patient means more patients per day, which can mean more revenue in an 8-hour day.

Value vs. Time-Based Reimbursement

Now let’s say that patient had Medicare. The reimbursement would break down like this:

  • Ultrasound (97035): $14.06 (but really $0, since 6 minutes is less that the minimum of 8)
  • Manual Therapy (97140): $31.10 (1 unit, since it was only 10 minutes)
  • Ice (97010): $0 (not reimbursed)

These rates were taken from the 2019 physician fee schedule calculator available at the CMS website here. So for the exact same treatment, the clinic only receives $45.16 —actually, only $31.10 since the US doesn’t qualify under the 8-minute rule— for that treatment from Medicare. For this reason, clinics routinely provide services above and beyond what a patient truly needs. Because if they only provide what is necessary, they go broke.

Summary

We all need to remember that healthcare is about one thing: the patient. The reason we have jobs is because patients need our help and treatment. The reason most of us chose healthcare as a career was to help people get better. Focusing our metrics and KPIs on time-based productivity reduces patients to numbers. It incentivizes slower work of lower quality. Clinicians burn out trying to hit productivity numbers and running patients through cookie-cutter treatment protocols. We lose the human —or person-to-person— experience and service that healthcare should be.

Perhaps we need to take another look at how we measure productivity, reimbursement, and service delivery and return the focus back to the patient and their needs.

This article has already gone on long enough. In a future article, I’ll discuss how we can make changes to move our clinics and organizations away from time-based productivity measures and reimbursement and towards a more value-based model.

 

Are you tired of the focus on productivity? What other measuring stick should we use for healthcare delivery? Share any additional resources that you found helpful in the comments below!

For more informational reads, check out our Blog to see all the articles we’ve published to date. Click here to head over to our resources section and check out our variety of clinical and professional resources aimed at increasing your knowledge and skills. If you’d like to make some changes in your clinic or health center, and would like some help, check out our consulting and advisement services or contact us to see how we can help you break out of the norm and provide a truly impactful patient experience.

Rafael E. Salazar II, MHS, OTR/L is the president and CEO of Rehab U Practice Solutions. He has experience in a variety of rehab settings, working with patients recovering from a variety of injuries and surgeries. He worked as the lead clinician in an outpatient specialty clinic at his local VA Medical center. He also has experience as an adjunct faculty instructor at Augusta University’s Occupational Therapy Program, as a Licensed Board Member on the GA State OT Board, has served on several committees for the national OT Board (NBCOT), and as a consultant for the State of Georgia. He is also on the Board of Directors for NBCOT.

Read his full bio Here. Read about Rehab U Here.

 

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References

[1] Rohn, J. (Writer). (n.d.). The Ultimate Jim Rohn Library.

[2] From the House of Delegates: Help in Responding to ‘Productivity’ Issues on Its Way. PT in Motion News. July 14, 2014. http://www.apta.org/PTinMotion/NewsNow/2014/7/9/HoDProductivity/.

[3] Position Statement on Value vs. Productivity Measurement in Acute Care Physical Therapy. Acute Care. http://c.ymcdn.com/sites/acutept.site-ym.com/resource/resmgr/Files/2014-11_Productivity_Value_B.pdf.

[4] Draper D. O. (2010). Ultrasound and joint mobilizations for achieving normal wrist range of motion after injury or surgery: a case series. Journal of athletic training, 45(5), 486-91. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2938322/