The world turned upside down - Integrated Health Services at Orange Hills

Nursing Homes, April, 1997 by William Hibbard

Needless to say, all of this change has created major challenges for top management, including yours truly. We have had to develop new financial systems, for example, to track costs on a daily basis. Using a Kronos time system, we download data daily on each unit, tracking census, costs per patient day, and units of therapy per patient day (documented by bar coding) - in general, any information that will show us immediately which, if any, patients are going "off course" on the cost picture and why. Every month each unit receives its own profit-and-loss statement showing their admissions, discharges, nursing costs, ancillary utilization and net revenues. Unit management is brought on to the team, paying the sort of close attention that is absolutely necessary to survive under managed care.

Another administrative challenge has been coping with staff "culture shock." Not all the moves we have made have been universally popular, understood or accepted. It has taken time, particularly for the more tradition-oriented staff, to adjust to this very focused and intense approach to care, and to accept responsibilities never before demanded of them. Some haven't been able to make it, and I freely tell everyone who applies for a position here that this is not for everyone.

Still another major challenge has been negotiating our way through a highly competitive market. Managed care has taken hold in California; facilities try to undercut one another and rates continue to fall; I estimate we're receiving rates at half the levels received in many other areas of the country. I know of facilities in those other areas paying contract therapy rates that would triple our outlays - where their monthly bills for such primitive therapies as nebulizer care run higher than the costs for my entire 37-bed respiratory unit. Bottom line: if we can't be efficient in our market situation, we'll get killed.

That is why I suspect that, when managed care hits in other areas of the country, some facilities will be floored. This, as the commercial says, is not your father's long-term care. It is what today's market demands.

If President Clinton and the Congress want to see how to really cut Medicare costs, I invite them to visit Orange Hills. They will find a facility providing high-quality care to a highly satisfied patient population at a rate very few can touch.

We're surviving, we're still learning - and we're ready for the future.

William Hibbard has been CEO and Administrator of Integrated Health Services at Orange Hills, Orange, CA since 1992. He has held administrative positions in a convalescent hospital, a rehabilitation center, a continuing care retirement community and skilled nursing facility.