Show Me the Money!

Knowing our business means understanding every possible metric, from billing to vehicle maintenance

 

 
 
 

Rob Lawrence, MCMI | From the Data Drives Care Issue


This section of the supplement is about the EMS business and the systems that support it. No, it’s not! Deep down, it’s about the money—making it, and, importantly, using it to achieve great patient outcomes. 
 
In these cash-strapped times, I encourage every EMS leader to adopt the Richmond Ambulance Authority (RAA) fiscal philosophy: At RAA, we say we have a “bucket of money.” If we submit complete, correct and billable call sheets, we fill the bucket. If we use personnel hours wisely and don’t crash the trucks and take care of the equipment, we will use some of the cash in the bucket, but we will also have sufficient reserves for such things as newer, cooler equipment—and even pay raises. Put a hole in the bucket of money, however, through bad or poor practice, and the first things to go are the nice things. 
 
The bottom line: Running your EMS system like a business is an absolute necessity, especially in the current political and fiscal climate.
 
When we think EMS data, we automatically think response and intervention—the machines and monitors that spew out information to improve the next rotation of care. But EMS systems can only be successful if they have the right amount of appropriately qualified providers, in enough correctly maintained vehicles, loaded with sufficient amounts of equipment, with the means of recording the patients’ history and demographics, to generate a fee for service, to fund the next turn of the response cycle. 
 
All of these seemingly mundane functions create the conditions that enable EMS to physically happen and are the power behind the punch of service delivery. All require enormous amounts of attention to detail and most directly affect the bottom line. System efficiency can only occur if prudent leaders develop an understanding of a devil’s amount of detail in these business areas.
 
In fact, the definition of the “quality unit hour” is simply two fully trained medics in a fully equipped vehicle for one hour. The unit hour is in fact a unit of currency because everything costs something. Unless that unit hour is deployed wisely, no income can be obtained.
 
Scheduling: The Most Important Asset
In any organization, EMS or otherwise, staff are the most important and the most expensive asset. Too many staff on duty for the level of call volume means unit hour utilization falls. Although crews may have a more relaxing day in that situation, cash hemorrhages from the organization. 
 
So, scheduling the right amount of staff on duty is a critical financial activity. Before anyone is placed in a shift, a detailed demand analysis must occur to deliver the amount of unit hours needed for each day of the week (see graph below). Once the accurate demand forecast is known, then the placing of staff into shifts, stations or vehicles can begin. 
 
The simplest scheduling systems include the basic sign-up sheet where volunteers identify their availability or the Excel-type spreadsheet systems that calculate hours worked. At the upper end of the spectrum, Web-based, interactive specialist software systems allow management to easily manipulate and extract information in a cost-effective manner. 
 
A useful piece of technology developed in-house at RAA, with the cooperation of our scheduling vendor, is the ability to overlay demand analysis with the actual staffing on any particular day. The combination of these two data streams allows managers to see where “pinch points” or operational pressures will develop and facilitates getting the right amount of people on duty. 
 
Billing: The Birthplace of the Budget
Medical billing is an entire industry in its own right; and it’s critically important to EMS organizations. Many dyed-in-the-wool veteran providers, however, don’t give a second thought to what happens after the call sheet has been completed and “sent to file.”
 
Assuming the department actually bills for service (and most services now do), the bill is the birthplace of the budget. This year’s income determines next year’s spend, just as last year’s activity informs you of this year’s demand. Accurate report completion provides the billing department the best opportunity to correctly categorize the bill into the appropriate fee for service. 
 
In addition, data analysis around the patients served, and bills generated, does more than just indicate potential income. The payer mix, once identified, provides a clinical cross-section of the population served; by understanding the Medicaid, Medicare or private-pay status of those served, managers can better understand the return on billing. 
 
Example: No EMS system achieves a 100% income on the fees charged. The Medicare rate may be less than the bill, or local insurance carriers—particularly in the Affordable Care Act era—may not pay all that is expected. Analysis of both payer and the entity that pays out must be understood to identify the return on bills sent. 
 
A thorough understanding of your billing time is also key. Knowing how quickly bills issued result in money back to your organization also assists in setting the budgetary tempo. Considerable analysis by both billing and finance staff as to the solvency this income brings determines the rate of service delivery. 
 
Paid bills are the cash that fills the mythical bucket, so understanding billing data becomes a critical requirement. Just as response times or ROSC stats are important for the operational team, so is billing data for the admin team.
 
Vehicle Maintenance: Catch It Before It Fails
Preventive maintenance is the only way to ensure the patient never has to wait any longer than necessary for an ambulance, or worse, wait in a 
broken-down ambulance on the side of the road for a replacement vehicle to arrive. 
 
Data is as much a key requirement in caring for vehicles as a toolbox full of wrenches. In many states, comprehensive vehicle records are a permitting requirement, and they’re certainly a “must have” to attract any form of formal accreditation, such as that awarded by the Commission on Accreditation of Ambulance Services. 
Vehicle maintenance records provide evidence of failures and their frequency. They can reveal equipment trends and inform maintenance or replacement decisions. For instance, if you can identify when key components break on a particular type of equipment, you can design a service or replacement plan to take care of the problem before the equipment fails.  
 
The term “unscheduled maintenance” is code for cash hemorrhage. If a truck and its crew have to leave the street with zero notice, unit hours (EMS currency) are wasted. The net effect is one less vehicle available on the street when the carefully constructed, data-driven demand analysis says you need them. 
 
Poor maintenance, then, potentially equates to poor patient service and a reduced revenue stream. Use of a data system and the establishment of a “mean time between failures” (MTBF) chart for key equipment and abiding by it will ensure that unscheduled maintenance remains at a minimum. This alone will pay for your investment in a vehicle maintenance data program. 
 
Many types of maintenance tracking systems exist in the marketplace, but consideration should be give to systems that capture:
• Assets: Your vehicles by their VIN and type.
• Retired assets: Keeping data on old vehicles and vehicle types allows for comparative analysis against new or updated units.
• Work orders: Who did the work (one mechanic may fair better at a repair vs. another). Also, a record of parts used on every truck allows for cost-benefit analysis of the relative worth of a vehicle, particularly as they near end of life and determinations need to be made about disposal or continued service.
• Preventive maintenance: Maintenance is the “public health” program for vehicles. A sufficient understanding of other fleet metrics will allow the timing and intensity of servicing to be adjusted to ensure a cost-effective level of treatment. 
• Inventory: Understanding inventory, both what is on the shelves and what has been fitted to the vehicle, informs stock control. 
 
Supply Management: Money Management 
Let’s face it, EMTs and medics are hoarders. In environments where stations have their own running stores or the same crews look after the same vehicles day in, day out, there’s a tendency to “add” equipment to the vehicle because “you never know.” This might seem like a good idea, but there is a high probability that it will lead us to purchase more equipment and supplies than we need, only to watch it expire and be disposed of—the equivalent of throwing cash straight into the dumpster. 
 
The key is to have a system that accounts for stock and identifies both fast-moving items (so you can ensure that sufficient levels are maintained) and slow-moving items (so you can ensure that such items are rotated to vehicles or stations that will use them before they expire). 
 
Your data system should also analyze the frequency of equipment used. Example: The use of an expensive item, such as an IO needle, can be tracked against clinical activity to confirm that the expenditure of such high-dollar disposable equipment is appropriate. The RAA system identifies where and when high-cost items are used to ensure that they’re not being employed where a more cost-effective device could be used.
 
Data and usage assessment also minimize equipment storage. The adoption of a “just in time” system means that only a few days of stock is stored on site and regularly circulated onto the trucks. An item of unused stock on the EMS store shelf is money that could be used for a better patient outcome elsewhere or increase your earned interest on those dollars.  
 
In terms of logistics management, there are now a number of data-related products in the marketplace that will track, monitor and even locate pieces of equipment. Radio frequency identification (RFID) systems communicate with an electronic reader mounted in your ambulances to identify the presence of an item of stock or part. RFID can also be used to identify new stock arriving into your agency’s “store” location and load it into the stock-management system; after the item is loaded onto the truck, RFID records its location, and the inventory status is updated. 
 
Key pieces of equipment, such as expensive monitors, stretchers, stair chairs, suction units and first-in bags, can also be fitted with RFID chips and programmed to alert the crew if the vehicle moves away from the allocated device. If a piece of equipment is inadvertently left on scene, it will send an alarm before the crew get too far away, allowing them to retrieve it—clever stuff!  
 
The same RFID system can also help you clinically monitor when the equipment leaves the vehicle to ensure that monitor and suction units leave the ambulance as the crew arrives at a cardiac or unconscious patient call. This helps ensure that cardiac patients are not walked down two flights of steps and out to the ambulance before being monitored or suctioned. 
 
UPC (universal product code) bar coding is another stock-control system that is seen everywhere from supermarkets to the bottom of the computer this article was typed on. Code readers write to a database, which assembles stock control and is then able to report information trends, usage and expenditure.
 
Education & Credential Management
How quickly would your organization make it to the front page of the local paper if one of your providers made a mistake and then it came to light that they weren’t even certified or up-to-date on the particular skill that caused the issue in the first place? How much more egg on the face would there be if management had no idea that said EMT or medic was not current or actually qualified to do the job? I can hear the litigation cash register “kerchinging” as I type!
 
Information technology systems abound with databases to capture employee credentials and manage them for you. Some products are even capable of generating email reminders to the provider and their supervisor that qualifications and certifications are nearing expiration. 
 
This notification system is especially useful and cost effective in larger departments, where it can be difficult to track requirements for a large number of personnel. Although it should always be the provider’s responsibility to remain current, the system can monitor who and what is expiring or up for renewal. This can save you from a lawsuit and that equates to big dollars. 
 
The RAA system, for example, counts down a provider’s time to certification or credential expiration. In the worst-case scenario where something expires (good management should prevent this, of course), the employee “clock-in” system, which is integrated with the credentialing system, refuses to allow the provider to book on-shift. With the plethora of required courses and state-mandated training providers must maintain today, a system that not only captures data, but also sends alerts, is the only way to go.
 
The Last Word
This section of the supplement appears last for a reason—not because it’s the least sexy of the topics, but because readers must be left with the lasting impression that EMS is a business, and we need to run it as such. 
 
Knowing our business means understanding every possible metric out there, even in the back office. And this applies to every type of EMS agency: Not-for-profit organizations need money to make payroll; volunteer organizations need money to buy equipment; in the public sector, the days of bailouts and bottomless municipal coffers are a thing of the past; and in the private sector, failure can lead to new ownership before you can say “hostile merger and acquisition.”
Put simply: The consequences of not paying attention to the “business side” of the business are dire. 
 
 
Mobile Category: 
Technology



Connect: Have a thought or feedback about this? Add your comment now
Related Topics: Technology, Administration and Leadership, vehicle maintenance, supply management, RFID, equipment storage, EMS scheduling, EMS billing

 

Rob Lawrence, MCMIis chief operating officer at Richmond Ambulance Authority and was named a JEMS EMS 10: Innovator of EMS for his work on the Rider Alert program in 2011. Rob is a graduate of the U.K.’s Royal Military Academy, Sandurst, and spent his first career as an active duty Army Officer in the British Royal Army Medical Corps, after which he held various senior leadership roles in U.K. ambulance services before moving to Richmond, Va. to join RAA.

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