PRACTICE: IMPOSSIBLE™

042 - Saving Healthcare Dollars with Shane Donaldson

October 20, 2022 Shane Donaldson Season 1 Episode 42
PRACTICE: IMPOSSIBLE™
042 - Saving Healthcare Dollars with Shane Donaldson
Show Notes Transcript

It’s easy to waste a lot of time, money, and effort  if you don’t know how to effectively use your resources in a managed care practice. In this episode, Coach JPMD interviews the founder and CEO of Pinnacle Home Care, a twelve-agency enterprise providing services all throughout Florida. Shane started Pinnacle in 2003 out of an obsession with the patient experience and a belief that there was a better way to provide home care. His passion lies in the area of corporate culture and staff engagement, grounded by the belief that a corporation can be a force for the greater good of the communities and people it serves. This episode will help you to understand the simple things that you can do that will help you to save money and decrease hospital admissions when using home healthcare services.

Show Notes



Coach JPMD  0:01  
And if you hear that sound, you know what we're going to be talking about, we're gonna be talking about money here on the practice impossible podcast with your host, Coach JPMD. And today we're here with Shane Donaldson who is CEO of Pinnacle Health Care. And he's going to tell us about himself and how home health care agencies dmes and physical therapy and just ancillary services affect the payment tree. If you haven't had a chance to download the money tree payment tree diagram, do so at WWW.Coachjpmd.com/moneytree. And you can slash money tree. So that's WWW.coachjpmd.com/moneytree, and you'll kind of see where we are. So Shane, tell us about yourself and a little bit about your background and how you became to be the CEO at Pinnacle. 

Shane Donaldson  0:51  
Yeah, thank you, Doctor, I appreciate the opportunity to spend some time with you this afternoon. I'm actually I was born in New Zealand, in a town called Christchurch, I lived there for about seven years and then finally found my way to Australia, when my father got relocated there and I used to live in a very remote location, to put it into context 1000 miles from the nearest city. But I eventually made my way to the big city and studied physical therapy and earned my physical therapy degree in the early 90s. And I made my way here in 1995, because there was a huge improvement drive due to the lack of physical therapists in the United States that point in time. And so I landed in sunny Florida, in St. Petersburg, the company that I worked for did some sub contracting work to the HCA hospitals. And so I found my way into the hospital system and that way in the Tampa Bay area, worked in the hospital systems, skilled nursing facilities, etc. And then I actually left for a few years and had the good fortune of working in Australia and New Zealand and England before coming back here, finally landing and stopped being a nomad in about 2001. And what what kind of introduced me to homecare was the fact that in the other countries that I'd worked in, none of them had homecare, England, we're just starting to lift it off the ground in 2001. And I thought this is a great place to work because I can provide one on one care, unlike, for example, in a skilled nursing facility, or outpatients where how many patients can you see at any given hour, so I really liked the quality approach to home care. And so I started up a small independent contracting therapy company in 2002. We subcontracted our services to some national homecare agencies here in the Tampa Bay area. And then subsequent to that, I had this feeling that we could do it a little better. So I boldly kind of stepped out and started the first time to your agency in 2003. In the Tampa Bay area. Since then, we have expanded to 12 agencies that were 16 locations throughout the state of Florida, the only two areas that are able to provide services in his Miami Dade, and then up in the Panhandle and the Tallahassee and the Pensacola market. And that's really kind of that we have to put it into context, we service about 7500 patients on census at any given time, we admit about 200 patients a day. And we're probably discharging a similar amount at the same time. So just to give context of the size of our organization and kind of where we provide services. And as a as a skilled homecare agency, I think it's important to differentiate the services that we provide skilled means that we're providing intermittent care in a person's place of residence, and we provide nursing, PT, occupational therapy, speech therapy, medical, social services, and also home health aide services, but not the kind of home health aide services where, you know, someone would sit with your grandmother for long periods of time. It's really good personal care where someone would come in and provide a shower visit or something like that safely after a person's, you know, coming back from an injury or hospitalization.

Coach JPMD  4:09  
So so you're describing a fairly large reach in Florida. Are you just in Florida? Or do you have a nationwide presence?

Shane Donaldson  4:19  
No, just in Florida, at the moment, certainly anticipate that within the next 18 months, we'll start to migrate out into the adjacent states.

Coach JPMD  4:26  
Wow, that's impressive. I'm kind of embarrassed I guess, because we've been on we've been sitting on the board for our condominium association for a couple of years now. We both own I guess the buildings that we practice out of. And so you're running this statewide agency out of that location in Spring Hill?

Shane Donaldson  4:45  
No, our home office, our corporate office is actually located in Oldsmar, Florida, which is midway between Clearwater and Tampa. 

Coach JPMD  4:53  
Okay

Shane Donaldson  4:53  
So that's where we have all of our centralized teams and then the 12 locations one of which is is in your building complex that that Spring Hill location? Interestingly enough, it is our largest volume location across Florida. Little old Spring Hill. 

Coach JPMD  5:11  
Yeah

Shane Donaldson  5:11  
Yeah, very interesting.

Coach JPMD  5:12  
Yeah. So I think that speaks to, to the managed care population. And we're going to talk about that a little bit. Because, you know, in the monetary series, we're trying to help physicians understand the business of medicine, and how to increase their revenues decrease stress. And I think one of the things that helps obviously decrease or increase revenue is by keeping patients out of the hospital. So can you explain your, your goal of therapy, your goal of skilled nursing, not skilled nursing, but home therapy, that can help physicians decrease their expenses and subsequently increase their revenue?

Shane Donaldson  5:48  
Yeah, great question. And there are so many nuances to that. I think that, you know, just like everybody else that is paid directly or indirectly with Medicare funding, you know, it's the the triple aim, isn't it, which is, you know, to provide great quality outcomes, you know, to make sure that we're doing it in a cost effective way. And that, you know, patients ultimately are satisfied with the services that they provide. The, you know, interestingly, every homecare agency that is managed on the Medicare quote unquote, Medicare has an obligation from the moment they receive a referral to admit that patient in 48 hours. One of the key things that homecare agency can do for any physician, to help them save money is to make sure that patients aren't rehospitalized. We know that this statistic that if we don't get out there really quickly, patients go back into hospitals or ER for two primary reasons. Number one is medication mismanagement or reconciliation. The second one is just the anxiety from coming out of hospital and really not knowing what to do. And so our organization prides itself that 90% of all of our patients are admitted to our services within 24 hours. So we hold ourselves to a higher standard. And then you know, beyond that, it's making sure that we do a comprehensive assessment to ensure that all of the necessary disciplines are provided, but those that aren't necessary. And that we do our very, very best to keep patients out of hospital. And we use various mechanisms, including some technologies to augment our services so that we're not always going in and a health insurance or a physician is incurring the expense of a visit. We use telehealth platforms and other platforms to send and communicate with, with patients in order to engage them to ensure that look, if they are starting to have a decline, or they have any concerns that rather than pick up the phone and call for an ambulance service that they're calling us first. And so that we can then intervene and either go out and see the patient or communicate with a physician to come up with other solutions to prevent those hospitalizations.

Coach JPMD  7:51  
Yeah, so you're describing a pretty complex operation to be able to do all of that. And I'll be honest, I'm not. You know, one of the reasons why I wanted to have you on the podcast is because there's some things I don't understand about home health care and home health care payments. So we know that, you know, there's a fee for service component of it. But how does Pinnacle make money? If you're adding all of these additional services, you're using resources for phone calls, making sure patients call you first. I know that there was a push for prospective payments and capitated payments, how is Pinnacle making money to be able to do all these things?

Shane Donaldson  8:30  
Yes, sure. So to give context, about 60% of all of the revenue that pinnacle receives is by virtue of treating traditional Medicare Fee for Service patients. And then the second bundle is Medicare Advantage. I know that that's kind of the area that we want to spend our time on. For, for the traditional patients, then we get paid episodically, which is every 30 days of providing care, we obviously the patient will have maybe a case mix or a diagnosis that they are primarily being treated for and Medicare says this is the bundle of money that you're going to be paid, irrespective of how many resources I have any patient visits, and calls the place to the patient. Now, if you contrast that with the managed care environment, and this is an interesting conversation, because if you were to ask a homecare agency, what are the two primary? We'll call them challenges, if not threats to homecare, they would they would say there are two things one is capacity, because there are too many patients and not enough homecare agencies to meet that need by and large and the second one actually is a misalignment of payments with managed care organizations. So it's a great conversation for us to be having and what I mean by that is the misalignment is that point the vast majority of Medicare Advantage insurances pay us per visit. Okay, and so the homecare agency is paid on a volume and not on a value. And we are currently moving into an environment where the value base for homecare agencies is starting to gain traction, but it's not, we're not there yet. So every time a homecare agency goes out, the insurance is obviously billed for that visit. And then that gets kind of passed on. And, and impacts physicians that are set up in a Medicare Advantage environment, we have just negotiated our first contract with welfare. And in fact, it goes into effect tomorrow. Coincidentally, where it is, it is bundled. But there is also an upside opportunity based on reducing hospitalizations. So wealthier has seen it their wisdom, they understand that the the area that a homecare agency could help with is preventing rehospitalization and the subsequent expense. So if we drive down those three hospitalizations, and we have an upside opportunity to share in some of the the control of expenses for that particular patient, and I do believe that Dr Pierre, you know, we're in the formative stages of kind of taking that process and putting into the hands of other insurance, Medicare Advantage programs, because once we align on cost containment, and it's not a volume based method of payment, then we I think we're working in far better alignment. Because ultimately, it's all about how can we do this in a cost effective way? And unfortunately, not all of the drivers are aligned between all of the people in the system.

Yeah, and I think it's because this system has been driving it to be a more of a fee for service system where providers, specialists, even PCPs, who are not in managed care or fee for value, or value based care is just that they don't they don't see it. But sounds like you see it, obviously you see it because you're contracting with Wellcare to do that. And that will help us on our Wellcare contract side. But how do you get to the point like what is the number what what do you look for in that metrics that allows you to get that upside? Because there's also a downside, if you're if you're going to contract with Wellcare? Is that going to be an exclusive contract? Are you going to not be able to take any other insurances? Or? And if you do, how do you manage all of those contracts?

Yes, so there is no, there is a group of providers that are going to be providing this, they're going to be lifting this concept off the ground now in the in the initial phase, and we will probably get to an equal upside and downside opportunity. But there is only upside. And it's based on the data set that has been collected on rehospitalizations for all Wellcare patients, historically, over the last 12 months in the state of Florida, by the current providers. And let's just say that there's half a dozen providers. And then so now we've been set metrics to drive down those rehospitalizations. And when we do, then there is an upside of up to 6% of an increase in the payment that we would normally receive by, you know, in a regular fee for service kind of scenario.

Coach JPMD  13:21  
So there are multiple, multiple players in this in this contract in this metrics there. So you may not be you're not gonna be the only home health care company, but you will be one of them one of the six or eight that they have in the state to look at that incentive or get that incentive?

Shane Donaldson  13:38  
Yes, that is true. But there is an additional algorithm in this scenario, and that is that the list of providers and let's just call it half a dozen, for for argument's sake is stratified based on their historical performance. And that historical performance is based on number one, do you accept patients and start them quickly because they know that that is a really good way to drive down rehospitalizations and the overall expense. In addition to that, what is your rehospitalization rates have? You know, and all of these things go into stratifying the providers such that when a patient has a referral for homecare, those that have been performing at the highest level will have the first opportunity to accept that patient. If that provider cannot, then it will go to the next layer of performance in terms of the providers and they will have an opportunity. So it's almost like if as long as we keep our metrics that are important to in this case, welfare is the insurance company at the top, then we get the first opportunity to accept those patients throughout the state and then it goes further on down to some of the other providers.

Coach JPMD  14:54  
It's interesting. So you know, I have to say that this conversation so far has been such a an enlightening conversation. And I think it's even more even at a higher level conversation than most of our younger physicians might be aware of. But I think what I take away from this is that if you are a provider that is providing good care, let's say your primary care provider that does their he does scores are up their mammograms. So they're encouraging their patients to get mammograms, stool tests, you know, and all their preventative care, then that will in turn, have the insurance companies want to partner with that PCP to send them more patients. So it's very similar to what I'm hearing you describe, because you've been doing well, because the metrics have been good. They're incentivizing you to continue to make more money. Is that is that?

Shane Donaldson  15:42  
I think that that I think that's an ideal correlation. I would the only thing that I would say is that in homecare, I think that we've been late to get to the situation that you just described, and we're only just getting there now.

Coach JPMD  15:56  
Yeah. So I think that's that's an opportunity as obviously an opportunity for, for our audience to understand where, where the industry is going, because we're moving towards a value based care model. And we just have to understand the business so that we don't get stressed out. And we can maintain the revenues, especially in an environment where you know, revenues are coming down, inflation is going up. How are you getting the labour force to be able to do the things that you you're describing here? Are you mostly 1099 nurses? Are you do you have employed staff? Does that work for you?

Shane Donaldson  16:32  
Yes. So the regulations for a homecare agency is such that a homecare agency must provide one of its disciplines purely as w2 employees, and the vast majority of home care agencies clinical included, choose nursing. So to put into context, we have about 1300 staff that are W2 employees, about 850 to 900 of those are clinicians. And then we have and so all of our nurses are W2, most of our therapists are W2. And now medical social services and home health aides are all w2employees as well, we augment on the therapy side. Just because it's an interesting nuance to home care, it's just the way that it's evolved over decades, that therapists have a tendency to do a fair amount of contracting work. But still well north of 50% of our therapy side is also done by W2 is we just augment it in areas by 1099. Contract therapists. So the vast majority of our staff are all W2. Not all of them, of course, a full time. So we have a PRN population that we call upon as our capacity and needs increase. In terms of staffing, we're fortunate to have pretty significant team on the talent acquisition side. So we have 15 full time, individuals because you're touching on all the key items. The biggest challenge that we have is capacity. And so there are 850, skilled intermittent homecare agencies in the state of Florida, we have 12 of them. The way that we look at it is this. It's not that there aren't clinicians out there, it's just that they're working for another employer, we need to make sure that we become the employer of choice by creating the right circumstances in which an individual number one would want to join us and then not want to leave.

Coach JPMD  18:26  
Yeah. And that's whatever, any business I mean, we struggled for a year, right after or during the pandemic to hire even just a front office person. And we're still looking for potentially an operator, which we can't find. So So that's interesting.

Shane Donaldson  18:42  
It's an incredibly difficult market. 

Coach JPMD  18:43  
Yeah. So So let's shift shift from the labor force to now equipment because that's something I didn't understand. And I hope you can enlighten me durable medical equipment, we did have a series or a money tree series on durable medical equipment and how payments are affected by that. Do you provide the actual supplies to the members? Or do they go to their insurance companies and go to the DME company? How does that work on your side?

Shane Donaldson  19:12  
Yes, by and large, well, we are, we are intricately connected, but we do not provide the durable medical equipment such as walkers and bedside commode and things of that nature. So what we will do is, normally what will happen is that let's just say we have a typical patient is being discharged from hospital. It is technically the responsibility of of the discharge planning system inside that hospital to make arrangements for any DME and home health. Oftentimes, they lean on the home health agency who has the relationships with DME providers to make sure that the patient receives the DME in a timely manner. And so the homecare agency will often facilitate that by having relationships with many DME companies and as we will know at the end companies sometimes take certain insurances and don't take others. And so the homecare agency usually knows all of the nuances and who to reach out to for the appropriate DME.

Coach JPMD  20:08  
Okay. So it doesn't come out of your your payments, it's just as a separate line item for the insurance payments.

Shane Donaldson  20:15  
Correct. The only thing that is really bundled in home care outside of the direct services that are provided to the patient is what we call routine medical supplies. And so routine medical supplies would be your tip, it's usually the typical wound care supplies. Okay. Now, a managed care, insurance, we'll bundle that into the visit, right? But if there are any specialised dressings, let's say an alginate dressing or some of the complex dressings, that we will directly bill, the insurance company and have it drop shipped to the patient. And that's the way they had done. But the vast majority of the normal nursing supplies are included in the payments of the homecare agency.

Coach JPMD  21:02  
It's almost like a like a DRG for home health care. 

Shane Donaldson  21:05  
Yeah. Yes. 

Coach JPMD  21:06  
Which I'm not sure. Is there a certain term for that? Or is it just a bundled payment?

Shane Donaldson  21:12  
I would say it's a bundled payment. And I think it's more so a bundled payment, when you're getting paid an episode of care like a 30 day payment, as traditional Medicare does further say, really, it's in managed care, it's really pay per visit. And each of those visits included the cost of sending the clinician out as well as the nursing squad.

Coach JPMD  21:34  
So I've got some provider centric questions that I wanted to ask you, as a service provider that that needs or that works with the physicians directly. What are some examples of really good offices? So if a physician is listening to this episode, and they want to partner with you to help decrease their stress and increase their revenue? What would you say is a good office to work with?

Shane Donaldson  21:59  
Yeah. So it's a a couple of things, I think, are incredibly important. And not just to the homecare agency, but it really benefits the physician's office. Number one is responsiveness. If we are out, you know, the typical patient goes into distress too many times after hours, it would be nice if they would, you know, if they had all of their challenges between the hours of nine to five or a physician is readily available. But typically, it's you know, it's after hours into the evening, they've come home from hospital or they're having a problem. And we might need to deploy a staff member and having the what we don't want to do is send a patient to the emergency room, or, and ultimately ending up as a rehospitalization. But we need the guidance and assistance of the position to help us avoid that. So that responsiveness is really important. And it might not be the fifth that particular physician, but maybe they've got somebody that's hovering for them. And we just need to know who that is. Because a nurse who's out seeing a patient in distress is going to be is going to take the conservative option whenever they can't get someone to make a definitive decision in a relatively short period of time, because they don't want to take on the responsibility of the patient having an adverse outcome. And they should have solved that problem in the patient's home. Another thing would be authorization. So typically, we will get authorization for a certain number of visits. And oftentimes, the authorization is not driven by the insurance company, we don't get it through the insurance company, we get it from the primary care physician. If let's say we had authorization just for an evaluation, and then we're needing some additional visits, maybe it was wound care or IV, something that in the absence of the patient would have a detrimental outcome. And if we can't get authorization, then we have a quandary IV, we don't want to abandon the patient. But we can't always assume that the visits are going to be authorised. So it's really important that we have clarity. Now, usually, when we have a relationship with a physician, we know that they are going to give us authorization for the visit. Because we've established a good relationship and we work within the confines of you know, an understanding, knowing full well that the physician will generally say look showing, have your clinician see the patient, we want that to happen. And then we'll worry about the authorization after but at the same time, we have to be responsible with that authorization because we want everyone needs to contain costs. And and it's important that we play our role in that. So that responsiveness to making sure that if we need authorization to go out and see it that comes back quickly so that we can go in and make sure that patient doesn't have an adverse response and end up in the hospital is just a critically important one for us.

Coach JPMD  24:47  
That's great. That's great points. And I think it speaks to just communication. So patients want to communicate with their providers and specialists also want to communicate. I think that's one of the things that I've been preaching in many episodes. Isn't that is to just to have?

Shane Donaldson  25:03  
Yes, I don't know if you have any familiar work familiarity with it. It's an organization that is actually based out of Colorado and they're now in 36 states, including Florida. And it is an basically, it's, it's like going to an urgent care centre, but they aren't mobile. And so I know they've just entered Pasco having come up from the Tampa Bay area. And they what's pretty interesting, and I think that they have a place in the continuum is that for a patient that's perhaps on the verge of going into hospital, they have a turnaround time, and they have nurse practitioners that do this. And they have a two hour turnaround time to get out to a patient's house that doesn't have the capacity to, to kind of, you know, travel in and maybe be seen by an urgent care facility. So we are looking to partner up. And obviously, we're not going to do anything that would incur a physician, unnecessary expenses. And we would make sure that we're having conversations with those physicians to say, these are some of the additional things that are available out there in the community, that might be might cause a small expense, but save a large expense. So it's, it's aligning with those kinds of resources that cost efficient, yet provide an adjunct to care that solves for a particular need in healthcare. It's those kinds of organisations, I think, that really are going to play a role in the future and ensuring that we're able to provide that cost effective care and keep patients out of hospitals.

Coach JPMD  26:34  
So you must be reading my notes, because that was my next question. What do you think is the future of home health care? And you're describing dispatch health, I guess, is that would you say? 

Shane Donaldson  26:43  
Yes, they call dispatch health.

Coach JPMD  26:45  
Yeah. So I'm going to think I'm going to link that in the show notes, because I'm gonna do some research and, and take a look at that as well. So you feel like they're gone to be ancillary services that can help decrease the urgency or the need for emergency room visits through different service providers. That's one, that's very interesting.

Shane Donaldson  27:04  
Definitely. Because it's, it's a similar cost to going to an urgent care center as opposed to an ER visit. And so I think the future of home care, in addition to that is, and consistent with that is homecare agencies are going to be required to treat patients that are more acute. So what we've seen in the last, I would say five years, and it was certainly enhanced by COVID was a desire to bypass in many cases, skilled nursing facility and rehab facilities, often driven initially with COVID, for the fear that, you know, we go into one of those facilities and ended up with COVID. And you said there was certainly evidence of that. But as we as we move on, and realize that there isn't enough capacity in the in the healthcare system, then more and more patients are moving into homecare with higher levels of acuity. And we need to be prepared for those things. And so things like diversion programs away from skilled nursing facilities, or patients came out of a skilled nursing facility, and they have the capacity when a patient has a further complication to bypass the hospital and go back into the skilled nursing facility at a lower cost. The and one of the other things that is going to be very important is to be able to do more with less visits. Again, it's a capacity issue. So how can we how can we create a great experience with lower costs and make sure that the the all of the patient's needs are met? Things like you know the telehealth platforms, we have one called Cindy, where we can programme information to be sent to the patient in between our homecare visits to reinforce let's say a physician's protocol or diagnosis specific information to make sure that the patient is doing what they need to. So as so over time, we will see less visits given in the home. Certainly necessary visits will continue to occur. But they will be augmented through the likes of telehealth. Now what's really interesting is that payers in home care are not paying for telehealth visits. They allow us to do it but they're not reimbursing for it. But it's a matter of time. I think before that occurs.

Coach JPMD  29:24  
Yeah, yeah. What was the name of that telehealth service that you use?

Shane Donaldson  29:28  
It's call Synzy. It's actually an organization based out of St. Petersburg, interestingly, and they have a phenomenal platform that can be used both by physicians and home care agencies, where we can have up to six people on a call on a video call a let's say a physician, the homecare nurse, a family member in New York and the patient and the patient can be observed through the use of an iPad or an iPhone device and everyone can collaborate and work much do case conferencing on complex patients. It's very, very helpful. 

Coach JPMD  30:04  
That's cool. I'll definitely leave those our links to the to that in the show notes. So if you're not running a large statewide home health care agency, and you're having fun, what are you doing these days?

Shane Donaldson  30:18  
Interesting. A lot of my fun now revolves around my 12 year old son. And, and through him, I think I'm living my childhood or the childhood that I was really wanted to have, which was, you know, he's into things like, you know, riding quad bikes, and jet skis, kind of those outdoorsy activities. So that's really where I derive my fun. 

Coach JPMD  30:44  
That's cool. I thought you were gonna say sports. I thought you're gonna say rugby or something. I think they played rugby out there in Australia.

Shane Donaldson  30:52  
Yes, I played a little bit way back in the day, and also Australian rules football, but there's not really many opportunities for that in the United States.

Coach JPMD  31:00  
I think it's a good thing. 

Shane Donaldson  31:03  
Probably so.

Coach JPMD  31:07  
So where can we find you? How can we get more information on Pinnacle and, and maybe even shoot some healthcare workers to you? Because it sounds like you're going to be expanding and other states as well soon?

Shane Donaldson  31:21  
Yes, absolutely. I believe you have our website at www.pinnaclehomecare.net certainly feel free to to pop my email address in Dr. Pierre Donaldson@Pinnaclehomecare.net Just keeping in mind that it's a.net rather than a.com. And if there are any questions or any follow up, so I'd be glad to connect with people and answer any of those questions.

Coach JPMD  31:45  
Well, it's been an honor to have you on the podcast and I know that your must be super busy, if not with the pinnacle homecare, but also with your 12 year old. So thank you so much for coming on the podcast and sorry for the technical difficulties initially, but we got through it. And we again, thank you.

Shane Donaldson  32:05  
Thank you, doctor. I really do appreciate the opportunity to speak with you today. Thank you so much.

Coach JPMD  32:09  
Alright, have a good weekend. You too.