The case for quality: effective clinical and financial case management: this project is collaborative effort by Cerner and the Healthcare Financial Management Association

Healthcare Financial Management, June, 2005

Case management is a process that has existed in hospital practice for a long time, but only recently has it been getting the attention it deserves as healthcare executives, health planners, and policymakers struggle to further improve quality while striving to cut costs. An organized, systematic approach to case management can bring benefits for the revenue cycle as well as patient care.

Some of the factors fueling increased interest in case management include a burgeoning population of older Americans, the explosion in numbers of managed care contracts, and, as the U.S. population ages, an increase in the number of patients who are chronically ill and require continuous, costly care.

As defined by the Case Management Society of America, case management is "a collaborative process which assesses, plans, implements, coordinates, monitors, and evaluates the options and services required to meet an individual's health needs, using communication and available resources to promote quality, cost-effective outcomes." a "Collaborative" may be the key word in this definition. The ability to capture and maintain appropriate information to allow high levels of collaboration between care managers, financial managers, and payers is crucial.

Nurses typically function as clinical case managers in many hospitals. Too often, however, departments not linked to case managers--finance, business, planning, and the like---maintain the cost information case managers need to promote cost-effective outcomes. So, although case managers may have complete access to patients' medical records, they may not have equal access to financial information. Combining clinical and financial records, therefore, is a necessary, if challenging, step in developing an effective case management program.

An Essential Process

"It's not only possible to combine clinical and financial case management, it's essential," says Brent James, MD, PhD, vice president for medical research and continuing medical education at Salt Lake City-based Intermountain Health Care, and executive director of the IHC Institute for Healthcare Delivery Research, Salt Lake City.

"The way to think about case management is in terms of a value-added work process," says James. "Quality improvement theory says that you organize everything--your management structure, your data systems, your incentive programs--around value-added work. One of the ways you can define value-added work is in terms of clinical processes."

According to James, every clinical process produces three clinical outcomes: medical, service quality, and cost. "The best way to think about cost is that it's one more outcome of a clinical process," he says. "We in management control the process, and these outcomes are the results of what we do in the process."

Combining clinical and financial case management requires a hospital or healthcare system to have personnel and programs in place to support the process. "Clinical and financial case management can absolutely be combined," says Liz Alhand, former CFO, Presbyterian Healthcare Services, Albuquerque, N.M. "The formula for any change is always the same: people, technology, and process."

The People Factor

Efforts at controlling healthcare costs and quality must start at the top, Alhand believes. "There needs to be an absolute commitment from both governance and senior leadership that a balanced approach to quality and financial outcomes is an organizational imperative," she says. "As important, the medical and clinical staff must be engaged in the process of utilizing the most effective approaches to care."

Case management is part of an overall process of improving the quality of care an organization provides, Alhand explains. "An organization needs the active engagement and passion of senior leaders in improving quality. That's probably the most important ingredient. It's not a once-a-year thing. It can't be done through an annual leadership retreat. Improving quality has to be a part of every conversation within the system and a part of every measure used to evaluate the success of the organization, both clinical and financial."

In many healthcare organizations, however, there may be a separation between business goals and clinical goals, some experts believe. "There needs to be a link between the business enterprise and the clinical core of the organization," says Kenneth R. White, PhD, associate professor and director of the graduate program in health administration at the Medical College of Virginia, Virginia Commonwealth University, Richmond, Va.

"What I hear over and over is that there is a disconnect between the costs and the quality of care," White says. "Clinicians see administrators as focused on the bottom line. Administrators, on the other hand, don't always understand and see the clinical side of the business. The link between the business side and the clinical side needs to come from the top down. Administrators need to learn about the clinical side by interfacing with physicians and nurses, and they need to support programs that promote a more patient-centered culture."