Name: Mary Linn Hamilton
Age: 50
Position: President and CEO, VNA of Rhode Island
Background: Formerly corporate director of Strategic Health Services, Inc., a company that supplies durable medical equipment, home care, therapy and private duty services in West Virginia.
Education: Bachelor’s degree in nursing, Simmons College; Master’s in public health, University of North Carolina at Chapel Hill; named a fellow of the University of Chicago Center for Health Administration Studies, 1975; completed doctoral course work at Columbia University School of Public Health, 1991
Family: Married, four children
Residence: East Greenwich
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PBN: It’s been 100 years this month since VNA of Rhode Island was formed to bring professional health care to patients at home. With patients spending less and less time in the hospital do you think the VNA has come full circle?
HAMILTON: When the VNA was founded the primary concern was infectious disease control. That has been a continuing goal. However, with people living longer we are seeing a lot of people with chronic illnesses, diabetes, congestive heart failure, things of that nature, where they are living longer but less well. Those are the people I think we make the most difference to [as well as] patients who are in the community and whose needs never even come to light at physicians’ offices or within emergency rooms. This is another reason for us focusing on teaching self-care, teaching how to take care of an illness so that it doesn’t become an acute episode that puts a person into the hospital.
How cost-effective is home care compared to hospital stays?
Home health has been proven to be the lowest cost provider when you look at the spectrum of hospital to outpatient facilities to home care. Estimates have run that when we substitute for a hospitalization it costs perhaps 15 percent of what an overall hospital stay would be.
Are there other benefits, such as maintaining dignity and independence?
People prefer to be taken care of in the privacy of their own homes. And when we go into their homes we go in with the idea that we are a guest and we respect that privacy, although we’re there to deliver a nursing and a delegated medical service. For the most part families feel better having their loved ones at home. We also substitute for stays in nursing homes.
Health care in Rhode Island is in trouble. How are your finances?
The Balanced Budget Act [of 1997] hit hospitals and home health agencies very hard over the course of the last few years. Forty-five percent of the reimbursement for home health through Medicare has gone away. We are operating with the need to follow expensive regulations that are important for us to assure quality of care, but the reimbursement is 55 percent of what it was before.
Any relief in sight?
In October we will be going on a Prospective Payment System for Medicare. The BBA introduced an Interim Payment System, which was much more restrictive and had a certain dollar amount in the aggregate that you could be reimbursed for. It took home health agencies back to the reimbursement they had received in 1993 and ’94. The Prospective Payment System is based on 80 home health resource groupings. Each carries a different dollar amount with it. The groupings are based on clinical severity of the client, functional capabilities and the diagnosis [and these] will drive what classification the patient has and therefore what reimbursement will be. It’s all founded on a clinical assessment tool called an OASIS form that the nurses use when they go to make their initial patient visit.
Financially how will the PPS system help?
It will pay more. Between the 80 home health resource groups the reimbursement can be as low as $500 or as high as up to $5,000. Every 60 days a home health agency is able to receive a partial, advance payment, I think it’s 60 percent of what you’re requesting at the beginning of care. At the end of care a settlement will be made for the remaining 40 percent. We’ll have more cash on hand; we won’t be waiting as long to get partial payment. We’ll be able to bill within a few days of receiving the OASIS assessment. It’s a national set of standards for the Medicare program. Some other payers have elected to use the OASIS assessment but Medicare is the driver behind the payment system.
How much of your client base is Medicare?
Currently it runs about 50 percent. Some agencies are as high as 85 to 90 percent. [The rest are covered] through all different insurance companies, commercial carriers, managed care contracts, Medicaid, private pay. Some payers are more restrictive than others. Each one has a certain set of rules that needs to be followed in order to ensure timely payment. A lot of the emphasis is on clinical documentation. Some are better at paying timely than others.
How are Blue Cross and UnitedHealthcare of New England?
I wouldn’t want to say anything about that. I really, politically, can’t.
What was the thinking that inspired the BBA?
The reason home health was part of the Balanced Budget Act was that home health in general had grown tremendously. The idea of discharging patients quicker and sicker fueled that growth. The industry itself however was also scrutinized for high utilization. The questions were asked were we providing too many visits to patients as an industry in general. That gave rise to the idea of curtailing the amount of money that Medicare would then pay in order to decrease utilization rates on the home health benefit. The interesting part is that there is statewide variation so that a state in the south of the United States with a high proportion of elderly might be providing three times the number of visits per Medicare population that a state up in the New England area (was). We were right about at the national norm. But the formulas were all applied regardless. They expected if they reduced the amount that would be reimbursed, providers would change their behavior as far as offering the services. The behavioral change they wanted was a reduction in cost; they did not want to see a lessening of the care that was given. But that in some instances had to happen.
Nationally since 1997 the number of Medicare-certified home health agencies has declined 26 percent. Total spending for home care has declined from $41 billion in 1997 to $36 billion in 1999. How have you trimmed costs?We did have layoffs and [made] changes in our program level. We didn’t eliminate services, we restricted them, the admission criteria became a little bit more strict than it had been before. We curtailed the numbers of people we could see but we didn’t drop any services or programs. Our visit volumes are probably down by around 33 percent from 1998, so we’ve had to determine how to produce the same type of outcome for less visits per client.
Are you succeeding?
Well, our patient satisfaction measures have been consistently high. There was a time when we were feeling a lot of pressure and could tell that satisfaction among our patients was not as high as we wanted it to be. But we’ve been consistently hitting pretty high targets over the past several quarters which tells us that they are happy with the services we’re providing.
Then it would seem the BBA worked, if you’re able to keep patients happy with fewer visits.
Yes, it has achieved some of the goals, [but] when you talk about 26 percent of the agencies going out of business, you wonder if that hasn’t created an access problem. Agencies can only see so many patients, so there are patients out there who were receiving care from an agency who no longer receive it from anyone.
How has the aging of America changed your home-care strategy?
We now see what we would have called elderly people taking care of even more elderly people. Women and men in their 60s taking care of parents in their 80s and their 90s, all of whom have health problems. So we are taking care of families of people that are over 65 at this point. Then you’ve got those of us in an age range where we have kids that we’re taking care of and parents at home that we’re taking care of while we’re trying to continue to work full-time positions. So we’re all in this together to a very great extent.
Has being a Lifespan partner helped as much as you thought it would?
Yes, it has. We moved some of our functions that were central to the VNA into Lifespan corporate, such as billing and collections, receivables management, public relations, marketing, things of that nature. We also are able to draw heavily from corporate support in terms of finance, cost reporting, human resources, quality improvement, corporate compliance. All of these things would be activities that we might need to purchase from the outside were we still stand-alone.
Do Lifespan hospitals always refer to you, since you’re a Lifespan affiliate?
A patient always has the choice of agency. They (the patients) are asked during the discharge planning process if they have a home health provider. If they do not have one then there are alternatives given to them. We don’t have contracts with certain hospitals, because there are patients who have been with the VNA for years, and they may be with Kent or Woonsocket or Newport. There are VNAs other than just us. And so there you want to preserve the continuity of their care. It’s not a question of competing with other VNAs. The only thing necessary to place a referral is to just pick up the phone and give us a call.
How would a merger of Lifespan and Care New England benefit your agency?
I would not foresee much change based on a merger of the two.
