Board of Directors Workbook
Board of Directors
Workbook
The Business of Hospice for Board Members
WORKBOOK 8:
3rd Edition
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CEO Preparation for the Model – Workbook 1
Vision & Values – Workbook 2
Creating Your Model – Workbook 3
Alignment of Systems – Workbook 4
Model Workshop/BluePrint – Workbook 5
Model Curriculum – All Staff - Workbook 6
Model Curriculum – Leadership - Workbook 7
Model Curriculum – Board of Directors - Workbook 8
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
Page 1 of 80
Board of Directors Workbook
Table of Contents
Welcome to the Hospice Board! .............................................................................................. 4
What is Hospice?..................................................................................................................... 5
How is Hospice Paid? .............................................................................................................. 8
Medicare Hospice Benefit................................................................................................. 8
Physician Services ........................................................................................................ 9
The Reimbursement is Expected to Cover ALL Costs ................................................... 10
Residential Care in Hospice ........................................................................................... 10
What is Palliative Care? ..................................................................................................... 11
CAP – Aggregate and Inpatient ......................................................................................... 12
When does CAP hit? Is it a version of Hospice Hell? .................................................... 12
Dealing with the Medicare Aggregate CAP .................................................................... 13
The Aggregate CAP is Good, but there is a Flaw ........................................................... 14
Monitoring Medicare CAPs ............................................................................................. 14
Vision & Values ..................................................................................................................... 15
Vision ................................................................................................................................. 16
Values ................................................................................................................................ 17
Mission ............................................................................................................................... 18
The Subject of Values .................................................................................................... 20
Making Sure That Our Values Include Financial Balance ...................................................... 21
The Role of Financial Reserves in a Hospice ................................................................. 21
Reasons to be Profitable and Build Reserves ................................................................ 21
The Medicare Threat ...................................................................................................... 23
What Will Happen When Medicare Cuts Occur? ............................................................ 24
The MedPAC Recommendation (the U-Shaped Curve) ................................................. 24
Learning the Business of Hospice ......................................................................................... 26
The Three Primary Categories of Cost ........................................................................... 26
The Use of Net Patient Revenue (NPR) ......................................................................... 27
An Example of How to Compute NPR - Net Patient Revenue ........................................ 27
Classification of Costs ........................................................................................................ 29
Understanding Hospice Measurements, Key Concepts & Definitions ................................ 30
Lower Costs Are Not Always Better ................................................................................... 34
The War of Single Percentage Points ................................................................................ 34
You Can’t Operate Your Hospice Based on Averages ................................................... 35
Understanding Costs ......................................................................................................... 36
Hospice Homecare ......................................................................................................... 36
Indirect Costs ................................................................................................................. 37
Inpatient Units ................................................................................................................ 38
Benefits .......................................................................................................................... 38
Financial Fiduciary Responsibility ...................................................................................... 39
Recommended Financial Reports .................................................................................. 41
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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The Executive Dashboard .............................................................................................. 41
The Financial Aspects of the Model ............................................................................... 43
What is the Model? ................................................................................................................ 44
Why Should a Hospice Create a Model? ............................................................................... 44
The Benefits of Creating and Using Models ................................................................... 46
Breaking Down the Barriers............................................................................................ 46
Financial Disdain for the Numbers, especially Money .................................................... 47
Overcoming the “Great Dilemma” ................................................................................... 47
Avoid being Dependent upon Community Support ......................................................... 47
There is More than Enough to Fund World Class Hospice Care .................................... 48
Financial Reserves ......................................................................................................... 48
Examples of Model Designs .................................................................................................. 50
The Four Areas of Design Work that Impact Everything ........................................................ 51
The Model is NOT Financially Driven! ................................................................................... 52
No Budgets! ........................................................................................................................... 53
The Model Does Not Use Budgets but Rather NPR ....................................................... 53
Gaining Perspective and the Reality Check .......................................................................... 58
How can you get your benchmarking results? ................................................................ 59
The Decision Dashboard ................................................................................................... 61
Your Role as a Board Member .............................................................................................. 64
The Responsibilities of the Board of Directors ................................................................... 65
The Fiduciary Duty of Care............................................................................................. 65
Compliance Function ...................................................................................................... 66
Increased Focus on Quality and Patient Safety .............................................................. 67
Cost Efficiency and Duty of Care.................................................................................... 67
Prior Board and Other Experience ................................................................................. 68
Hospice Cultural Hallmarks ............................................................................................ 68
Examination of Motives .................................................................................................. 69
Asset or Liability? ........................................................................................................... 69
The Cardinal Sin............................................................................................................. 70
Recognizing your Contribution ....................................................................................... 70
No-Nos for Board Members............................................................................................ 71
Relationship Trouble with the CEO ................................................................................ 72
All CEOs Make Mistakes ............................................................................................ 73
Mission Fulfillment .......................................................................................................... 73
Andrew Reed, CPA ........................................................................................................ 74
Hospice Finance 101 ......................................................................................................... 75
Physician Billing ............................................................................................................. 76
CAP ................................................................................................................................ 77
Cost Report .................................................................................................................... 77
Index .................................................................................................................................. 78
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Welcome to the Hospice Board!
Welcome to the Hospice Board of Directors! It should be considered an honor to serve this
organization and ultimately the patients and families that benefit from our specialized way of
caring. A member of the board is an important role and serves a unique and critical function.
This workbook will help you develop into a more effective board member by helping you
understand our Vision & Values, the business of hospice, our approach to hospice
management (the Model) and the role of board members. In addition, we will learn:
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Where our focus should be
What we should be doing
What we shouldn’t be doing as a board member
What specific reports should be used by board members
As well as highlighting some of the danger points that we need to be conscious of as
we move into the future of hospice
A member of the board plays a key role in the hospice, including providing oversight
functions, advice and representing the best interests of the communities served. It is
important that board members recognize that each member must become part of the
organizational culture and have a basic understanding of how the organization operates.
The Model
The Model is a modern approach to hospice management this organization has embraced.
The Model is an approach to operating a hospice as an integrated, coherent and coordinated
system of care based on quantified Best Practices provided by MVI. The goal of the Model is
to create a predictable high-quality experience that is financially balanced. The Model forces
a hospice to define itself, measure performance and challenge itself to be an ever-improving
organization.
MVI provides the conceptual framework and many of the supporting systems needed to
create and sustain the Model at your hospice. This is “the formula or recipe” we recommend
based on years of experience assisting, observing, and measuring hospices. This cumulative
and collective insight has led us to the belief that the culture of a hospice is the heart of the
matter...and it will be the inability of many hospices to change culture that will be their demise
in future years. All other things are subservient to the culture as culture shapes the thinking
and behavior of an organization.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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What is Hospice?
According to the NHPCO (National Hospice and Palliative Care Organization),
Hospice is considered to be the model for quality and compassionate care for people facing a
life-limiting illness or injury. Hospice and palliative care involve a team-oriented approach
(Registered Nurse, Physician, Certified Nursing Assistant, Social Worker, Chaplain) to
provide expert medical care, pain management, and emotional and spiritual support
expressly tailored to the patient's needs and wishes. Support is provided to the patient’s
loved ones as well (such as Bereavement Counseling).
The focus of hospice relies on the belief that each of us has the right to die pain-free and with
dignity, and that our loved ones will receive the necessary support to allow us to do so. The
focus is on caring, not curing and in most cases, care is provided to you in your own home.
Hospice can be provided in freestanding hospice facilities, hospitals, and nursing homes and
other long-term care facilities. Hospice is available to persons of any age, religion or race.
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Hospice focuses on caring, not curing and, in most cases; care is provided in the
patient's home.
Hospice care also is provided in freestanding hospice centers, hospitals, and nursing
homes and other long-term care facilities.
Hospice services are available to patients of any age, religion, race, or illness.
Hospice care is covered under Medicare, Medicaid, many private insurance plans,
HMOs, and other managed care organizations.
How Does Hospice Work?
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Hospice care is for any person who has a life-threatening or terminal illness. Most
reimbursement sources require a prognosis of six months or less if the illness runs its
normal course. Patients with both cancer and non-cancer illnesses are eligible to
receive hospice care. All hospices consider the patient and family together as the unit
of care. (Note: the 2009 rate for Routine Home Care was $135 per day)
The majority of hospice patients are cared for in their own homes or the homes of a
loved one. “Home” may also be broadly construed to include services provided in
nursing homes, hospitals and prisons.
Typically, a family member serves as the primary caregiver and, when appropriate,
helps make decisions for the terminally ill individual. Members of the hospice staff
make regular visits to assess the patient and provide additional care or other services.
Hospice staff is on-call 24 hours a day, seven days a week.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Who is the Hospice Team?
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Hospice care is a family-centered approach that includes, at a minimum, a team of
doctors, nurses, social workers, counselors, and trained volunteers. They work
together focusing on the dying patient’s needs; physical, psychological, or spiritual.
The goal is to help keep the patient as pain-free as possible, with loved ones nearby
until death. The hospice team develops a care plan that meets each patient's
individual needs for pain management and symptom control.
It is important to find out what the role of the patient's primary doctor will be once the
patient begins receiving hospice care. Most often, hospice patients can choose to
have their personal doctor involved in the medical care. Both the patient's physician
and the hospice medical director may work together to coordinate the patient's medical
care, especially when symptoms are difficult to manage. Regardless, a physician's
involvement is important to ensure quality hospice care. The hospice medical director
is also available to answer questions you or the patient may have regarding hospice
medical care.
The team usually consists of:
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The patient' s personal physician
Hospice physician (or medical director)
Nurses
Home health aides
Social workers
Clergy or other counselors
Trained volunteers
Speech, physical, and occupational therapists
What Services Does the Hospice Team Provide?
Among its major responsibilities, the interdisciplinary hospice team:
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Manages the patient’s pain and symptoms
Assists the patient with the emotional and psychosocial and spiritual aspects of dying
Provides needed medications, medical supplies, and equipment
Coaches the family on how to care for the patient
Delivers special services like speech and physical therapy when needed
Makes short-term inpatient care available when pain or symptoms become too difficult
to manage at home, or the caregiver needs respite time
Provides bereavement care and counseling to surviving family and friends.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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In many cases, family members or loved ones are the patient's primary care givers.
Additionally, hospice recognizes that loved ones have their own special needs for support.
As a relationship with the hospice begins, hospice staff wants to know about the primary
caregiver's priorities. They also want to know how best to support the patient and family
during this time. Support can take many different forms. This includes visits with the patient
and family members; telephone calls to loved ones, including family members who live at a
distance, about the patient's condition; and the provision of volunteers to assist with patient
and family needs.
Counseling services for the patient and loved ones are an important part of hospice care.
After the patient's death, bereavement support is offered to families for at least one year.
These services can take a variety of forms, including telephone calls, visits, written materials
about grieving, and support groups. Individual counseling may be offered by the hospice or
the hospice may make a referral to a community resource.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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How is Hospice Paid?
Hospices are not unlike most modern healthcare organizations in that they are paid for their
services by Medicare, Medicaid, and Commercial Insurance as well as from private
individuals. Most hospices receive 75-95% of its patient revenue from Medicare. Since
Medicare is the primary source of revenue, we will focus our attention the Hospice Medicare
Benefit.
Medicare Hospice Benefit
Under the Medicare Hospice Benefit, Medicare pays for hospice care normally on a daily
basis, except for Continuous Care which is reimbursed on an hourly basis. These are
referred to as hospice “levels of care.” There is a set rate for each day of the patient's election
of hospice care. There are four dominant levels of payment that may be made, depending on
the type of care provided on a given day. The daily rates (normally referred to as the Per
Diem) are set on a regional basis and are adjusted for the costs of providing care in that area.
The cost variations generally relate to the cost of labor. Hospice services are covered under
Medicare Part A.
Routine Home Care (RHC) - This daily rate covers care provided to patients who are at
home (defined as the patient's own home or wherever the patient considers home, such as a
nursing home). The Routine Home Care Per Diem is by far the most frequent level of care.
At least 80% of the total (aggregate) days of care provided by a hospice program must be at
home. The average hospice receives $135 per day for RHC.
General Inpatient Care (GIP) - This daily rate pays for inpatient care when necessary for
pain control or acute or chronic symptom management that cannot feasibly be provided in
other settings. Hospice programs are responsible for providing general inpatient care directly
or for making arrangements with an appropriate provider (a hospital, a nursing home with 24
hour RN coverage, or another hospice provider with inpatient capability). The average
hospice receives $518 per day for GIP.
Inpatient Respite Care - This care must be provided by the hospice program in an approved
facility (hospital or nursing home with 24 hour RN coverage) when necessary to provide a
respite to family members or others caring for the hospice patient. Respite cannot be
provided for more than 5 consecutive days. Though this is part of the Medicare Hospice
Benefit, it is by far the least utilized as most hospices only receive approximately $10 extra
per day to cover normal hospice costs AND cover the costs for the facility which the patient
temporarily stays. If there is a flaw in the hospice Medicare Benefit, this is it. It just doesn’t
work or make sense. The average hospice receives $140 per day for Respite Care.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Continuous Home Care - This is an hourly rate rather than a daily rate and covers care at
home during a period of crisis. At least 8 hours of Continuous Care must be provided in a 24
hour period that begins at midnight and ends at midnight. At least 50% of the care must be
provided by nursing (RNs or LPNs) with an RN supervising. The other 49% MAY be provided
by Hospice Aides. If a hospice fails to meet any of these criteria, a Routine Home Care rate is
billed.
These are the 4 fundamental levels of care and ways that hospices get paid. However, there
are other forms of payments from Medicare beyond these. These pertain to payments for
various physician services.
Physician Services
Hospices have always had physician involvement. However, physician services are
becoming more and more common and extensive in hospice. Therefore it is good to have a
basic understanding of hospice physician reimbursement.
Medical Director Services - Physician services related to oversight of the plan of care by the
hospice program's medical director are covered in the daily rates paid to the hospice
program. There is no additional reimbursement for hospice medical directors and this
oversight function.
Attending Physician Services – Attending physician services for clinical care to the patient
and family are not covered under the Hospice Benefit. These services can be billed directly to
Medicare Part B as normal. All other hospice services are paid through Medicare Part A.
Consulting Physician Services – If a physician specializing in an area of medical practice is
needed, these physician services are called consulting physician service. Since the hospice
is being paid to professionally manage the care of the patients, Medicare dictates that the
payment for such services comes through the hospice. In other words, the hospice bills
Medicare and then pays the consulting physician based on its contract with the physician.
There should be a contract between the consulting physician and the hospice regarding the
terms of payment. This “pass-through” from the hospice is a form of control for the hospice to
oversee the care.
Hospice Physician Visits – Visits by a hospice physician are paid in addition to the normal
daily rates. It is common, especially for hospice with Inpatient Units, to bill for physician visits.
However, an increasing number of hospices are billing for physician services provided in the
home setting. Normally, patients at a GIP level of care are visited daily by a physician.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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The Reimbursement is Expected to Cover ALL Costs
It is important to understand that the Medicare Hospice Benefit is expected to cover ALL
costs associated with providing hospice care including nursing, hospice aides, social work,
spiritual care, bereavement services, volunteer services, and all medications, durable medical
equipment, medical supplies, mileage, therapies, as well as other patient-related items in
addition to ALL overhead such as rent, administration, utilities, computer expense, etc. The
hospice is paid these set rates (normally referred to as Per Diems) regardless of the
costs associated with providing hospice care. Even if it costs a hospice $10,000 a day to
provide services for a patient, the hospice will only receive the rate set for the level of care.
Hospice is a true managed care system. Therefore, a hospice must manage its
reimbursement well. This is where MVI plays an important role.
Residential Care in Hospice
Though not part of the Hospice Medicare Benefit, many hospices engage in the practice of
providing “residential care” in hospice facilities. Residential care is where a hospice patient
“resides” or lives in a hospice facility. Hospice is paid the normal daily routine care per diem
and also charges the patient/family or other sources for the room and board (R&B) services.
The amounts hospices charge to “residents” in hospice facilities ranges widely from $100 to
$400 per day. Many hospices have great difficulty collecting R&B charges. Hospices that are
successful in their R&B collection effort are deliberate, explain the charges clearly before a
patient is admitted to the hospice facility and often collect 2-3 months payment in advance.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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What is Palliative Care?
Palliative Care (pronounced PAH-LEE-UH-TIVE). For the last thirty years, palliative care has
been provided by hospice programs for dying Americans. Currently these programs serve
more than 1 million patients and their families each year. Now this very same approach to
care is being used by other health care providers, including teams in hospitals, nursing
facilities and home health agencies, in combination with other medical treatments to help
people who are seriously ill.
To palliate means to make comfortable by treating a person’s symptoms from an illness.
Hospice and palliative care both focus on helping a person be comfortable by addressing
issues causing physical or emotional pain, or suffering. Hospice and other palliative care
providers have teams of people working together to provide care. The goals of palliative care
are to improve the quality of a seriously ill person’s life and to support that person and their
family during and after treatment.
Hospice focuses on relieving symptoms and supporting patients with a life expectancy of
months, not years, and their families. However, palliative care may be given at any time
during a patient’s illness, from diagnosis on.
Palliative Care Programs can take a variety of shapes in hospice including any combination
of those listed below and more! Palliative Care is much less defined than hospice at this time.
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Physician and Advance Practice Nurses/Nurse Practitioner
Hospital-based
Nursing Home-based
Centralized Office – where patients come to a single place for palliative care
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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CAP – Aggregate and Inpatient
Medicare has two forms of capitation for hospices: The Inpatient CAP, which does not allow
total GIP patient-days to exceed 20% of total Medicare days. I have personally never
witnessed a hospice exceed the Inpatient CAP. The highest I have seen a hospice run is
about 19%. The other is the Aggregate CAP, which is the maximum amount of cash a
hospice can receive from Medicare during a period that runs from November 1 st to October
31st. The Aggregate CAP is computed by multiplying the number of Medicare admissions
from September 28th to September 27th by an annual rate set by CMS, currently $23,014. If
a hospice exceeds either of these CAPs, the “excess” monies must be returned to your FI
(Medicare Fiscal Intermediary – the folks that send your Medicare money). Usually, payment
plans can be set up if you don’t have the cash, but it is not pretty in any case. ALL Medicare
payments to the hospice are counted including Routine, General Inpatient, Respite,
Continuous Care, Consulting Physician, Medical Director payments, etc.
Too many hospices take pride in saying “we are far under CAP.” Well, the truth of the matter
is that this is not a good thing. It means that we are providing perhaps “brink of death” care
and that we haven’t gotten the message out that the best hospice care is when we have
patients for longer periods of time. Hospices need to be managing “to CAP” and not away
from it. Who ever thought of the idea of an “Aggregate CAP” should be commended. While
there are certain entities that want to complain about the CAP (usually folks who have gone
over) and call it “unfair,” it is, in the MVI mind, a good thing. However, it should be managed!
Here are some questions to ask yourself:
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Is our hospice uneasy about keeping long living patients?
Do we understand that to make the fiscal model work, we must have long living patients to
offset short living patients?
Could our documentation education process be improved so that the documentation
would support keeping more patients on service? (Think of clinical educators as revenue
makers!)
Are we training the medical community to refer late by the types of patients we admit or
don’t admit?
When does CAP hit? Is it a version of Hospice Hell?
Hospices exceed the aggregate CAP when times are GOOD. The financial statements
couldn’t be better. Census is at an all-time high. Everybody is feeling great! Then the
LETTER arrives stating that your hospice has exceeded the aggregate CAP and that you
need to return $XXXXX to the FI. Not only do you owe for the last CAP year, you are already
into the NEXT CAP year…and unless you take some immediate action, you will owe even
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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more! Then, if the FI is in the mood and feels that their CAP calculation methodology was
incorrect in prior years, they might even dig back into past years to see if you exceeded the
aggregate CAP according to the new calculations. I would say that this definitely lends itself
to a flavor of Hospice Hell.
Perhaps we should look at what leads to CAP issues, not as an admissions problem, but a
discharge problem. Hospices need to admit patients that meet criteria, but determining “when
their time will come” is far from an exact science. Therefore, it is better to err on the side of
admitting the “grays”, gaining a firsthand experience and history with the patient, and then
discharging if necessary according to the facts that you know. If the discharge process or
utilization review is flawed, then you could face a CAP problem.
Dealing with the Medicare Aggregate CAP
If you’ve hit the Aggregate CAP, here are some suggestions:
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Pump up Admissions. The closer you get to September 27th the MORE valuable each
admission becomes. Get an admission on September 27th and you redeem $23,014 in
CAP money. Hire more marketers. If they get two admissions, they’ve almost paid for
themselves. Goal: MAXIMIZE admissions!
Chances are you have a disproportionate percentage of patients who are not
declining and may need to be discharged. The closer you get to September 27th the
LESS valuable it is to discharge patients. Earlier discharges are better. You must always
do the right thing. Palliative Care is a good backdoor.
Open an IP Unit! It would have to be a quick deal, but theoretically it would work. IP
units draw short-living patients. Optionally, run more IP in qualified facilities. This would
be your best bet in an excess CAP situation.
It is important that we recognize that CAP is calculated on “cash” payments from the
Medicare System. It is NOT based on the accrual basis or on your Accounts Receivable.
“As far as CAP is concerned, all Medicare admissions are good. It doesn’t matter if we
are only able to serve the patient for 1 day, 1 hour or 1 minute! Each admission frees
up about $23,014 of CAP headroom, plus it should be part of our mission.” AR
Here is an illustration of the Medicare CAP calculations.
• Aggregate
– MCR Admissions X CAP Rate
– Example: 200 X 23,014 = $4,602,800
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Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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• Inpatient
– Less than 20% of MCR Patient-Days can be at the GIP Level of Care
– Example: If MCR Patient-Days total 20,000 in a year, then only 4,000 days can
be at the GIP Level of Care
The Aggregate CAP is Good, but there is a Flaw
I think that the hospice CAPs are good. They help to protect the industry from abuse. To
remove the CAP would be a mistake. If there is a flaw in the Aggregate CAP, it is that the
CAP amount is not indexed by service area. A hospice in California being paid a routine rate
of $240 a day will use up its CAP more quickly than someone in Corn County, Iowa, who is
getting $112 per day. This could easily be fixed by indexing the Aggregate CAP amount in
the same way that CMS sets the other level of care rates.
Monitoring Medicare CAPs
I rarely see a hospice with an Inpatient CAP problem. But I have seen many hospices have
problems with the Aggregate CAP. The Aggregate CAP can creep up on an unsuspecting
hospice and turn “what appeared to be a great year” into a “nightmare year.” A healthy
hospice has a “residual” of long-living patients. They are needed to offset short-living
patients. However, this residual “build-up” of patients is what catches hospices off guard.
And then one day, you exceed the CAP. The key is to deal with it early or even better,
remedy the situation BEFORE you have an Aggregate CAP problem. Here is how to monitor
the CAP:
 An indication that you may be close to the Aggregate CAP is to calculate the Median LOS
on LIVING patients…NOT terminated patients. If your hospice is close to 170 days,
you’re very close to trouble. ALOS based on terminated patients is of no value here
because the patients driving the CAP are not included in the calculation! Think about it.
 Calculate and forecast your CAP amount. Multiply the number of Medicare admissions by
the rate. You can also prorate the rate when doing an interim calculation. This is the “earn
as you go” method. It works. It is simple and effective. NOTE: To be conservative in
your estimate, EXCLUDE all patients that have previously elected the hospice Medicare
benefit. Even if you are going to receive a pro rata share of the CAP amount for a
patient, it is better to err on the side of conservatism.
 In your patient management system, look for a CAP report. Allscripts used to have one
as well as other major systems.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Vision & Values
As a board member, it is important that you understand and buy-in to the Vision and Values
of the hospice. These are more than just words and platitudes in a binder or on the wall. They
are living tools that are used to shape culture at our hospice.
Vision and Values are essential in the creation of culture… Without such a foundation, our
work would lack consistency, cohesion and direction. Such lack of coordination will confuse
public and internal perception and render a sub-standard overall hospice.
So the first order of board member business is an examination of Vision and Values. Do you
believe in them? This is the prerequisite. All other things are secondary to the answer of this
question. The problem with many hospice board members is that they are not really part of
the organization. This is evidenced when troubles come and they leave the organization.
Board members can often be the least vested with little sense of ownership, leaving
management with the long-term problems to solve. Please keep this in mind as you serve on
this board. You may be on the board for a term of 3 to 6 years maybe longer. But there are
people at the hospice that have invested perhaps their entire working career. Think of them
as you make decisions.
As you are a part of this hospice, you must have a genuine concern for people with a limited
life expectancy and believe in the mission. Hospice is a cutting edge philosophy of care
where the entire family unit is cared for…unlike most traditional forms of healthcare. It is a
remarkable thing…a true team approach, incorporating various professional disciplines
working in harmony with the community in a spirit of volunteerism within a managed care
payment system that saves the entire Medicare system billions of dollars annually. Hospice is
a model of healthcare that needs to be emulated by other flavors of healthcare. It is a perfect
example of social entrepreneurism.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Vision
Write the Vision of our hospice below. What are your thoughts?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
□ Is the Vision compelling?
_________________________________________________________________________
□ Does it use sensory images?
□ Does it excite you?
_________________________________________________________________________
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Values
Write the Values of our hospice below. What are your thoughts?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
□ Are the Values easy to understand?
_________________________________________________________________________
□ Do they make you feel good?
□ Is a clear financial element present?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Mission
If your hospice has a Mission Statement, write it below. What are your thoughts?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
Page 18 of 80
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Definitions:



Vision: Defines where the organization wants to be in the future. It reflects the
optimistic view of the organization's future.
Mission: Defines where the organization is going now, describing why this organization
exists.
Values: Beliefs that are shared among the stakeholders of an organization. Values
drive an organization's culture and priorities.
There are many ideas and opinions regarding the ideas of Vision and Mission Statements.
Most hospices summarize goals and objectives in a Mission and/or Vision Statement.
MVI tends to see the Vision Statement as the overall direction of your hospice. It is a point of
FOCUS. We prefer a short, “memorable” phrase that creates a statement of current and
future positions. We do know that in order to become a World Class hospice, a compelling
Vision needs to be cast. In our world view, simple is not only best…it is genius! However, be
aware that Vision Statements can be short or long; it is a matter of effectiveness and
preference.
A Vision Statement is a vivid idealized description of your hospice that inspires,
energizes and helps you create a mental picture of your future. It can include an element
of NOW that is part of traditional Mission Statements. It’s OK to break the rules to fit your
Vision.
While the existence of a shared mission is extremely useful, many strategy specialists
question the requirement of a Mission Statement. Vision Statements are often confused with
Mission Statements; however, they can serve complementary purposes. There are many
models of strategic planning that start with Mission Statements. Therefore, it is useful to
examine textbook explanations here:

A Mission statement tells you what the hospice is now. It concentrates on present; it
defines the customer(s), critical processes and it informs you about the desired level of
performance.

A Vision statement outlines what a hospice wants to be. It concentrates on future; it
is a source of inspiration; it provides clear decision-making criteria.
The Vision describes a future identity and the Mission describes why it will be achieved. A
Mission Statement defines the purpose or broader goal for being in existence or in the
business. It serves as an ongoing guide without time frame. The mission can remain the
same for decades if crafted well. Vision is more specific in terms of objective and future state.
Vision is related to some form of achievement if successful.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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If your hospice chooses to have a Mission Statement, it should not resemble the Vision
Statement as this would confuse people. The Vision Statement can galvanize the people to
achieve defined objectives, even if they are stretch objectives. A Mission Statement provides
a path to realize the Vision in line with its Values. These statements have a direct bearing on
the Model.
To become effective, the hospice’s Vision Statement must (as theory states) become
assimilated into the hospice’s culture. Leaders have the responsibility of communicating the
Vision regularly, creating narratives that illustrate the Vision, and acting as role models by
embodying the Vision, creating short-term objectives compatible with the Vision, and
encouraging others to craft their own personal Vision that positively impacts the hospice.
The Subject of Values
The subject of values doesn’t receive enough attention in most organizations. Values are
normally not on people’s minds. How many people who apply for positions at your hospice
ask, “What are the values of your organization?” It is a rare bird indeed! At this hospice,
Values are taken very seriously.
Values are essentially the core beliefs of the organization. Values impact behavior including
interactions and decision-making processes. They are what people believe in your
organization. Values are demonstrated in staff behavior. Our hospice has deliberately crafted
the Values we foster and they are recognized as acceptable behavior. Values are a tool used
to shape the culture of our hospice.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Making Sure That Our Values Include
Financial Balance
One of the main points of revisiting a hospice’s Vision & Values is to make sure that the
financial or business aspects are included. In many hospice mission and value statements,
virtually nothing is mentioned about this. Yet, without proper attention, a hospice may find
itself merging with another entity or closing its doors if the financial and business aspects are
not satisfied. The following is an effort to help us understand the “why” so we can incorporate
these often excluded components into our culture.
The Role of Financial Reserves in a Hospice
Reserves play an important role in a hospice. Reserves are a symbol of strength and
capability. They decrease stress and anxiety. They provide a physiological as well as a very
real material advantage. Hospice leaders need to have a clear idea of the value of having
financial reserves. They are part of the Vision of a World Class organization.
How much does a hospice need? These are important questions. A hospice needs enough
money to fund its Vision. This may sound like an easy, pat answer, but it is the truth. Some
hospices need $100,000,000 in the bank. Some need $10,000,000. Many need less. A
hospice that has cash in the bank can rapidly move on projects such as inpatient units, new
programs, drive competition out, etc. Not having cash reserves may eventually mean the end
for many hospices.
Reasons to be Profitable and Build Reserves
This section is repeated in many of the MVI materials because it is so important. The reason
a hospice needs to be profitable and thus build reserves is simply the fact that an
organization cannot survive in the long-term without reserves. An event or combination of
events WILL occur in the future of every organization that will test its capabilities. No hospice
is immune to these challenges. Money makes things easier.
We also need to have top-of-mind awareness of the reasons why we need reserves so that
we respond to daily decisions with balance. This is part of the culture shift. Every staff
member should be aware of WHY being profitable and building reserves is critical. Here is
our stock list of reasons:
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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














Can your hospice outlast changes in Medicare? Changes in Medicare can last a long
time, even decades before relief comes after over-reactions by those in control. A
hospice needs to have reserves to outlast these seasons.
Can your hospice outlast ADRs (Additional Data Requests) and focus edits? Severe FI
(Fiscal Intermediaries) focus edits and other revenue withholding mechanisms can
severely disrupt Medicare payments for the better part of a year when combined with
sequential billing.
CMS is actively seeking to reduce Medicare payments. Reviews of cost reports,
ADRs, CR5567, phase-out of the budget neutrality act all point to an effort to reduce
reimbursement. If history means anything, in the future, our rates will be decreased.
There are ever-increasing competitive pressures in hospice. At present, there are
more hospices or “hospice-like” services.
Costs are increasing. Consider DME. It is an area that is increasing rapidly due to a
limited number of vendors and higher operating costs like the cost of gas. Nursing
costs will continue to increase due to the nursing shortage.
A hospice needs funds to weather PR (Public Relations) disasters. If your hospice is
accused of killing a person, I guarantee that you will have a few “dry” years in the
community support department. We have seen large hospices cease to exist in a
matter of months after major PR disasters.
A hospice needs funds to take advantage of opportunities that arise. This could be the
purchase of a nursing home that could be converted into an Inpatient Unit or to acquire
a hospice in a contiguous service area. Money in your pocket is a great thing.
A hospice needs reserves for “management surprises.” What if accounting has done a
poor job of reporting Pass-Through expenses? Pass-Throughs can be substantial
amounts…even millions. We have witnessed cash-short hospices merge or cease
business over Pass-Though surprises.
Lawsuits are becoming more of a problem in hospice. They can be VERY expensive
and also lead to a PR disaster if mishandled.
Occasionally, a hospice can have a “super duper” high cost patient. If you have
money salted away, you can weather the situation. If not, you may be looking for a
partner to merge with.
Hospices need money to possibly undercut competitor margins by introduction of
additional products and services.
Hospices need funds to take care of indigent patients. This has been the classic
response…and it is as true today as ever.
Some hospices are one patient away from bankruptcy.
It is just good common sense to build reserves.
It is a “nice feeling” to be able to afford to care for high cost and indigent
patients or to build an Inpatient Unit and say, “No problem!” It just feels GOOD!
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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The Medicare Threat
CMS and Medicare Fiscal Intermediaries can place incredible burdens on a hospice. They
can shut down a hospice overnight or choke it to death by truncating cash flow. Here are
examples of how CMS and Medicare FIs can put a hurt on a hospice:




Medicare ADRs (Additional Data Requests) – Tons of time and effort go into sending
documentation to the FI to review. A hospice will not get paid for these claims until the
FI has made a determination in favor of the hospice. If a negative determination is
made, the hospice must appeal the case to an Administrative Law Judge (ALJ). In my
experience, most ALJs rule in favor of the hospice. So, it is worth fighting declined
billing.
Getting a Medicare FI Ticked Off – If you get on the bad side of a Medicare FI, watch
out! I don’t care how big your hospice is or how long you have been in business don’t do it. They can crush you. If you are having problems with an FI, the best thing
you can do is hop on a plane and see them. Tell them how great they are and how
stupid you are. “Teach me how to do it right,” you should say. It is all about the
relationship.
GIP and Continuous Care are being scrutinized for abuse.
Post Payment Edits – These are requests for immediate recoupment of funds. This is
where an FI demands immediate payment of long-living patients. They are usually
large, from $100,000 to $300,000. This can hurt the hospice that is short on cash. You
have 10 days to remit payment.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Medicare is reducing rates. It is inevitable considering the nature of government to
overspend and sometimes make poor decisions with unintended consequences. Here are
some ideas to consider:
1. It has happened historically (look at the other modes of healthcare).
2. The government will not allow any mode of healthcare to make too much
money.
3. The tendency of government is to introduce more regulation for control
purposes. There is an inherent loss of innovation (freedom) of “how” hospice
care is delivered with more regulation.
What Will Happen When Medicare Cuts Occur?
When Medicare decreases hospice reimbursement and rates, at least 3 things will happen:



There will be a decrease in the number of new hospices
Financially weak hospices will fold or seek merger partners
Financially competent hospices will adjust models, keep on trucking and see it as a
huge opportunity
The MedPAC Recommendation (the U-Shaped Curve)
Discussion of the MedPAC recommendation for hospice payment system reform is beyond
the scope of this manual. However, because this is an important topic, we will lend our
opinion, trying to offer a balanced view that is not politically compromised or burdened by
deep ideological investment that can be difficult to set aside once created. Best ideas should
always win…patient first and financially balanced.
We applaud MedPAC for introducing new thinking about this subject matter. It has stimulated
thought and has forced hospice to carefully consider what we do and how we are paid. We
must not be afraid of new thinking. Let us consider the financial and patient/family aspects.
The Financial Aspect


The most elegant way to reform and improve the hospice payment system is to
simply lower the Aggregate CAP, index it by area, calculate it quarterly and
immediately withhold payments from providers that exceed it.
In addition, we suggest the addition of a few simple modifiers:
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Multi-View Incorporated Systems
PO Box 2327
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o Increase the volunteer percentage from 5% to 8% to foster more community
involvement. This gets hospice into communities and links our industry back to
its roots. We are a movement that came from the front porches and church
basements of this country. Too many hospices have forgotten our roots.
o Set a maximum discharge percentage that is quite low so that hospices must
keep the patients it admits, especially high-cost patients. We are managed
care. We must be able to take high-cost patients (from traditional healthcare
modes) and provide quality care for less. Example: We must care for a patient
that would cost the Medicare system $250,000 in a traditional healthcare
setting and do it for less…$100,000, $70,000, $40,000, a lower amount. Too
many hospices have run from high-cost patients. We are supposed to be
managed care organizations, experts at cost management within a system that
limits or capitates payments.
o Hospice must admit all patients that meet criteria. This would help to eliminate
“cherry picking” patients. If an organization wants to be in the hospice
business, it must serve all patients that meet criteria and cannot run from highcost or complex cases.
The Patient/Family Aspect
The MedPAC recommendation is primarily a financial-based model. It does not adequately
consider what happens or will happen to patients and families. There will be unintended
consequences. Here is the greatest unintended consequence from our experience with over
700 hospices.
Patients that receive great hospice care live longer.
To be fair, anyone studying the data would never be able to pick up on this point. If the
payment system incentivizes short-length of stays and patients receiving great hospice care
inherently live longer, we have two conflicting goals. If a hospice provides great care, it will be
penalized financially. At least within the present system, patients and families have enough
time to have a great hospice experience. The MedPAC recommendation will relegate hospice
to a shorter length of stay, “brink of death” service which is far from the original goal of the
Hospice Medicare Benefit.
When we look at what happens to patients that are discharged from hospices with CAP
problems, what happens? Typically, 50% of these patients die in a very short period of time.
The “rug of comfort and safety” is pulled from beneath them and they decline. We have seen
this phenomenon many times in the course of our work. Sadly, it has never been studied and
quantified (which we suggest is possible). Hope, comfort and overall great care cause people
to live longer. This is the human condition.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Learning the Business of Hospice
The Three Primary Categories of Cost
There are three major categories of cost in hospice. We might think of these as the “overall”
or comprehensive view. They are:



Direct Labor
Patient-Related
Indirect Costs
Here are some definitions for each:

Direct Labor - Labor expense that is directly involved with the provision of care such
as RNs, LPNs, Hospice Aides, SWs, Chaplains and visiting physicians. It does NOT
include supervisors or managers even if they perform occasional visits. Bereavement,
Volunteer, Triage, Admissions and On-Call areas are also considered Direct Labor.
The staff of these areas provides direct care. All other labor costs are considered
Indirect Labor.

Patient-Related Costs – Costs such as Medications, Medical Supplies, Therapies,
DME, etc. These are sometimes referred to as Ancillary Costs. Other Patient-Related
costs are: Ambulance, Bio-Hazardous Waste, Clinical Mobile Phones, Clinical Pagers,
Lab, Outpatient, Mileage, etc.

Indirect Costs – Costs other than Direct Labor and Patient-Related costs. They can
be categorized into three sub-categories:
o Indirect Labor – All labor that is NOT Direct Labor: CEO, CFO, Clinical
Managers, Medical Director, QI, Education, Medical Records, HR, Finance, IT,
Housekeeping, Maintenance, etc.
o Facility-Related – Costs related to your building or structure from which your
organization coordinates or provides services. Included are: Rent, Utilities,
Building Maintenance, Building Depreciation, Property Taxes, Building Loan
Interest, etc.
o Operating Expense – This category of Indirect Costs include all costs that are
not Facility-Related or Indirect Labor. These costs include: Answering Service,
Bank Service Charges, Audit Costs, Office Supplies, Printing, Postage,
Telephone, Marketing Supplies, Continuing Education, Dues and Subscriptions,
Computer Support, Computer Expense, etc.
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Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Each of these areas can be denominated by a number. For Model purposes, we use a
percentage of Net Patient Revenue (NPR). These percentage amounts should be clearly
established and compared to actual performance, at least on a monthly basis. They might be
as follows:
Cost Category
Direct Labor
Patient-Related
Indirect Costs
Example of
Your Model
40%
16%
28%
MVI Suggested
Model
38%
18%
30%
Average
Hospice
42%
19%
35%
The Use of Net Patient Revenue (NPR)
MVI encourages the use of percentages of Net Patient Revenue (NPR) rather than PatientDay costs for hospice financial measurement. This deviates from traditional hospice practice
and the explanation will follow. However, first we must define Net Patient Revenue.

Net Patient Revenue – Revenue earned for the provision of services to patients from
sources such as Medicare, Medicaid, Commercial Insurance and Private Pay. It is less
contractual allowances and bad debt. It does NOT include pass-through income such
as: Nursing Home Room and Board, Contracted IP, Contracted Respite or Consulting
Physician Services. It also DOES NOT include Community Support or Fundraising. It
is very important that you have a clear understanding of this term because most
comparison data is based on a percentage of Net Patient Revenue (NPR).
An Example of How to Compute NPR - Net Patient Revenue
Medication costs are $25,000 for the month. Net Patient Revenue is $300,000.
To compute Medication costs as a Percentage of Net Patient Revenue, you would divide
$25,000 by $300,000.
$25,000 divided by $300,000 = .083 (rounded)
Convert .083 to a percentage (multiply by 100) and you get 8.3%.
Medication costs in this example are 8.3% of Net Patient Revenue.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Why should have hospice use Percentages of Net Patient Revenue rather than Patient-Day
costs for hospice financial measurement?
• Comparability – Percentages are comparable with other hospice programs to help us
gain perspective (The difference between Professional versus Amateur hospice
leader). Patient-Day amounts are OK for a few areas, like Patient-Related. They fall
apart when comparing differing areas of the country, especially anything that relates to
salaries and wages. Salaries and wages can vary widely throughout the country.
These differences; however, are often off-set by reimbursement that takes these labor
factors into account such as CBSA codes for Medicare. Thus, the Percentages of Net
Patient Revenue would be more similar while Patient-Day amounts would vary greatly.
• Creation of a Model – Percentages are better suited for the creation of a Model.
Percentages are “scalable,” meaning they can be used by any size of hospice. In
addition, when rate changes occur, percentages easily translate to operational
measures.
• People Understand Percentages – Most people can conceptualize percentages
pretty well. If everyone knows that the pie is 90% (10% set aside for profit), they can
understand that if something is increased something else has to decrease.
We are not saying that Patient-Day measurement is wrong or that it should not be used. It
works very well with Patient-Related costs. However, recognize its short-comings whenever
there is a labor component.
MVI INSIGHT:
The superior hospice would not simply emulate a model based on the
“averages” of other hospices. It is much better to create your own based on what
would truly benefit patients and families in your respective service area.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Classification of Costs
Classification
Item
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
Example:
Medicaid Routine
Revenue
RN Salaries
CNA Salaries
Medications
DME
Therapies
Medicare Routine
Revenue
Medicaid Room &
Board Revenue
Contracted
Medicare IP
Revenue
CEO
Finance Salaries
Rent
Development
Salaries
Pediatrics Salaries
Admissions
Director of Nursing
Medical Director
(oversight function)
Physician
(performs visits)
Office Supplies
HR
Clinical Team
Leader
Computer Expense
Telephone
Continuing
Education
Education Salaries
QI/PI/Compliance
Utilities
Nursing Home
Room & Board
Expense
Community
Bereavement
Patient
Revenue
Direct
Labor
PatientRelated
PassThrough
Revenue
PassThrough
Expense
Indirect
Labor
Operational
Expense
FacilityRelated
Other
Program
Dev
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Understanding Hospice Measurements, Key
Concepts & Definitions

Patient Days = ADC multiplied by the number of days in the period. OR the
aggregate number of days patients were on hospice services for a period of time.
Patient-Days are the most common hospice financial measurements. They are relatively
easy to compute and are accepted in other forms of healthcare such as hospitals and
nursing homes. Patient-Day measurements are inferior to Percentage of Net Patient
Revenue.

ADC or Average Daily Census = Total patient days in a period/number of period
days. This is the standard measurement of hospice size.

FTE or Full-Time Equivalent = Working hours in a period/the number of FTE hours.
Normally, the number of annual hours used to compute an FTE is 2080. On a monthly
basis, the average is 173 hours. On a weekly basis, it is normally 40 hours. If an
employee worked 1040 hours, they would be considered half an FTE or 0.5. An FTE of
1.0 means that the person is equivalent to a full-time worker; while an FTE of 0.5 signals
that the worker is only half-time.

Average Length of Stay (Terminated Patients) = Total patient-days for terminated
patients/The number of terminated patients. Average Length of Stay (ALOS), like
most measurements, has its flaws. ALOS should be looked at suspiciously. First, does
the measurement number include the Inpatient Unit? This will skew overall hospice
numbers downward. Also, low ALOS in the Inpatient Unit isn’t a bad thing. You want
EVERY patient - whether they live one minute or one hour for CAP purposes. However,
you want Hospice Homecare ALOS as high as possible without exceeding CAP. Second,
ALOS, as most hospices compute it, only counts terminated patients via death or
discharge. Therefore, some patients will NEVER be included in the calculation! It can be
a dangerous measurement to rely on and it has misguided many hospices into millions of
dollars in CAP paybacks.

Median Length of Stay (Living Patients) - This measurement has importance when
CAP is a factor. It provides a truer picture of the overall mix of patients. It is NOT in the
standard reporting of most patient management systems. The best way to obtain this
measurement is via an export of a list of your current patients on census with each
patient’s respective SOC (Start-of-Care) date into Excel. Subtract the current date (today)
from the SOC date in a separate column. Then use Excel’s =Median (cell range) formula
to calculate your Median LOS.
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
Number of Visits Per Week – This is the count of the number of visits per clinician per
week (see the chart for goals). This practice provides a sense of respect for the
professionalism for each discipline and allows clinicians to “take as long as needed to do
a World Class visit.” However, it also should be stressed that the minimum expectation is
the minimum. If the minimum is 20 visits a week for an RN, then 19 is not acceptable on a
routine basis.

Number of Admissions Per Week – This is the count of the number of admissions per
Marketing FTE per week. Weekly measurement has become the Best Practice for
monitoring effectiveness. All admissions (not referrals) from the assigned “paper routes,”
accounts, or territories are credited to the Marketing person. A top hospice marketer will
produce 8-12 admissions per week from their assigned territories or accounts. Five would
be a minimum.

Number of Visits by Discipline per 8-Hour Day = Total number of visits/(Total time
worked/8). This is the best way to judge clinical productivity on a daily basis, in our
opinion, as it converts all time worked into an 8-hour day. The focus should be on
WEEKLY visits. However, to determine what is needed on a weekly basis, a daily amount
is often needed. Avoid communicating productivity in daily terms.

Visit-Hours by Discipline per 8-Hour Day = Total number of visit-hours/(Total time
worked/8). This measurement provides the best measurement of visit-hours of clinical
staff. This measurement helps productivity and is critical if a hospice wants to understand
costs by patient, diagnosis, payer, referral source, physician, clinician, etc.

Computed Caseloads = ADC/(Salaries/Average Hourly Rate/FTE Hours) NOTE: Normally an
FTE is 2080 hours annually or approximately 173 per month. Salaries would be for a specific discipline such as RNs, CNAs, SW, etc.
This measurement cuts through “perceived” or reported caseloads which tend to be
exaggerated by 2 to 3 on average. It provides a “real” caseload per FTE.

Days in Accounts Receivable = Accounts Receivable/Annual Revenue X 365 or
Period Days/AR Turnover Rate which is Net Patient Revenue divided by Patient
Accounts Receivable. This is a measure that most managers and leaders should be at
least familiar with. It provides the average number of days it takes to collect a bill.

Facility Mix = Total number of patients in nursing homes and assisted living
communities/Total number of hospice patients. This is a key measurement that can
have a huge bearing on a hospice’s profitability. It measures the percentage of patients
residing in nursing homes and assisted living communities.

Patient Mix over 365 Days = Number of patients that have been on hospice service
for more than a year/Total number of patients. An often overlooked measure that is
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vital to financial success. An adequate number of patients must live for extended periods
of time to offset short-living patients.

Revenue Per Payroll Dollar = Net Patient Revenue/Total Payroll Dollars. Since
payroll is the primary key to mastery of hospice finance, then the relationship between
revenue and payroll costs is significant.

Death Service Percentage = Total Program Deaths/Total Deaths in Service Area.
This is the true indicator of hospice penetration.

Admission/Inquiry Percentage = Total Number of Admissions/Total Number of
Inquiries. Notice this is NOT Referral/Admissions. Many hospices live in the world of
excuse and “sanitize” their conversion numbers. All inquiries should be counted.

Same Day Visit Percentage = Total number of admission or informational visits in a
day/Total number of Inquiries in that same day. This is an important measurement
that provides some indication of the ability to “sell” services. The goal of Intake is to get
same day visits.

Pass-Through - A Pass-Through is where the hospice bills on behalf of another entity
that cannot bill for itself, due to government regulations. The hospice then reimburses the
contracted entity (hospital, nursing home, consulting physician) based on the contract
between them. There are 4 major types of Pass-Throughs. They are:
o
o
o
o
Nursing Home Room & Board
General Inpatient in Contracted Hospitals
Consulting Physician Services
Respite Care in Contracted Facilities
What is the best practice discovered for treating Pass-Throughs and why?
Pass-Throughs are controlled by grouping them in the Patient-Related section of the Chart of
Accounts. An account is created for each Pass-Through revenue and expense so they can
be analyzed for specific problems. The “net” amount is displayed on the Statement of Income
and should be mathematically explainable. If Pass-Through revenue is used in calculation of
Net Patient Revenue, it has historically caused hospices to falsely believe their financial
performance is better than it actually is, as the offsetting expenses have not been properly
accrued.
It can also materially diminish comparability with other hospices based on Net PatientRevenue, as the inclusion of Pass-Throughs inflates revenue. Grouping the revenue and
expenses provides an easy and practical “control” for users of financial statements. The
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wording also creates questions from Board Members and others that allow an educational
opportunity. Not using this type of control has resulted in numerous hospices closing their
doors as they operate with artificially inflated bottom-lines.

Development Return Ratio = Total revenue from community support and
fundraising/Total expense for the Development Function. This measurement is
basically a ROI (Return on Investment) calculation. It measures the number of dollars
returned from each dollar invested in the attempt to garner community funds.

Contribution Margin - Contribution Margin is computed by subtracting Direct
Expenses from Direct Revenue. It is used to measure the performance of revenue
producing hospice segments like homecare teams and inpatient units. The “contribution”
is the amount of excess from direct operational costs left to pay for Indirect Costs and
provide for some level of profit. 36-40% is solid Contribution Margin for a hospice team.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
Measurement
Average Length of Stay (Terminated)
Median Length of Stay (Living)
Days in Accounts Receivable
Revenue Per Payroll Dollar
Facility Mix
Patient Mix over 365 Days
Death Service Percentage
Admission/Inquiry Percentage
Same Day Visit Percentage
Development Ratio
Average
60
52
1.60
23%
36%
65%
3:1
Acceptable Excellent
90
??
120
160
48
42
2.00
2.50
35%
50%
10%
15%
40%
50%
75%
85%
100%
4:1
6:1
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Lower Costs Are Not Always Better
When reviewing the Percentage of Net Patient Revenue financial measurements in the
following sections, please understand that we tend to look at lower costs as better. However,
this is not always the case. In fact, many times it is better for some costs to INCREASE. The
point is that there is a need to lower costs in some areas and increase costs in others to
create a World Class hospice. If you could lower ALL costs and still provide World Class
care, it would be great. However, that is usually not the case.
Example: If you believe that increased CNA services are World Class, then this cost would
increase. If you believe that Open Access involves increased Therapies expense, then you
would plan on this element of cost increasing. However, at the end of the day, the bottom-line
needs to be producing at least 10%.
The War of Single Percentage Points
You may not think a single percentage point variance is a big deal. But each percentage
point is a big deal. As we look at profitability in the hospice world, it often boils down to single
percentage points. So many times, a hospice is doing well financially, but the operational
profit is not due to one area of excellence. Rather, it is a percentage here and a percentage
there and the CUMULATIVE effect is surprising. Now, this may be fine and all…but if a single
area or category of cost goes out of control, the entire positive residual may be in jeopardy. If
your profit is due to a percentage point here and a percentage point there…and you know it,
then you know just what a balancing act you are performing!
“Building reserves is a war of single percentage points.” AR
Many people think that profitability is about having great cost controls in one or multiple areas
of a hospice. That is not usually the case. It is more about having good costs in MOST
areas…and it comes down to single percentage improvements. It is easy to self-justify if we
are over industry averages in a cost category and rationalize that it is not a big deal. But it is!
It is this attitude that robs us from performing to our full capabilities.
One thing that you should realize is “what” is possible. A hospice can achieve a 20%
Operational Net Income WITHOUT compromising quality.
“We must realize that most hospices waste tremendous amounts of money.”
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You Can’t Operate Your Hospice Based on Averages
In the following charts of hospice costs on a Percentage of Net Patient Revenue, you will
notice that the total of averages does not match the totals for categories such as Direct
Labor, Patient-Related or Indirect Costs. All data points in our benchmarking systems are
independent calculations, including totals for categories. In our validation processes, we
EXCLUDE elements that we believe are suspect. However, just because a data point is
excluded does not mean that the TOTAL is invalid. It may mean that data points may not be
segregated and therefore are lumped together so that individual data points are not accurate,
but the total is. Most hospices have a combination of areas that are higher or lower than the
averages. It is the mix that is important. Realize that you must have some areas that are
below the reported averages to be financially successful.
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Understanding Costs
Hospice Homecare
In the table below are costs expressed as percentages of Net Patient Revenue (NPR).
Average, acceptable and excellent amounts are displayed for each measure.
Cost Category
Total Direct Labor
Total Patient-Related
Contribution Margin
Total Indirect Costs
Indirect: Salary Costs
Indirect: Operational Costs
Indirect: Facility-Related
Net Operational Income
Direct Labor (Benefits included, 22%)
i. Nursing
j. CNA
k. SW
l. PC
m. Physician
n. On-Call
o. Admissions
p. Bereavement
q. Volunteer
r. Other
a.
b.
c.
d.
e.
f.
g.
h.
Direct Labor Subtotal
Primary Patient-Related Items
s. Medical Supplies
t. Therapies & Outpatient
u. DME
v. Imaging & Diagnostics
w. Ambulance
x. Pharmacy
y. Lab
z. Mileage
Pass-Throughs & Other
Average
42%
19%
39%
35%
23%
8%
4%
4%
Acceptable Excellent
38%
33%
18%
16%
44%
51%
30%
26%
19%
17%
7%
6%
4%
3%
14%
25%
17.90%
6.29%
4.76%
2.06%
1.28%
3.86%
3.09%
1.54%
1.21%
16%
6%
4%
2%
2%
3%
3%
1%
1%
13%
6%
3%
1%
2%
3%
3%
1%
1%
NA*
38.00%
33.00%
1.49%
.77%
4.55%
.07%
.35%
6.90%
.15%
2.99%
1.5%
3%
4%
.06%
.35%
7%
.15%
3%
1%
1.25%
2%
3.5%
.15%
.4%
6%
.12%
2.5%
.5%
* Each benchmark average is an independent calculation including totals; their sum rarely equals the sum of the data points in a category.
Some numbers may be rounded up for ease of memorization.
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Indirect Costs
In the table below are costs expressed as percentages of Net Patient Revenue (NPR).
Average, acceptable and excellent amounts are displayed for each measure. Salaries
INCLUDE benefits.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
Indirect Salaries (Total Organization)
Administrative Salaries **
Clinical Management Salaries **
Compliance/QAPI
Education
Finance Salaries
HR
Marketing Salaries
Medical Director
Medical Records Salaries
MIS Salaries
Other
Indirect Salaries Subtotal
Indirect Operational (Total Organization)
l. Computer Expenses
m. Continuing Education+
n. Dues, Licenses & Subscriptions
o. Insurance
p. Office Supplies
q. Postage/Mailings/Printing
r. Telephone
s. Marketing
Average
6.16%
5.73%
1.17%
.82%
2.77%
1.14%
2.29%
1.47%
1.26%
1.20%
.61%
NA*
.76%
.74%
.34%
.68%
.43%
.41%
.58%
.65%
Acceptable Excellent
3.5%
2.5%
5.5%
5%
1%
1%
1%
1%
2.25%
2%
.75%
.5%
2%
2%
1%
1%
1%
1%
1%
.5%
0%
.25%
19.00%
.7%
1.3%
.3%
.65%
.35%
.38%
.5%
1.5%
.5%
2%
.3%
.6%
.3%
.35%
.5%
1%
* Each benchmark average is an independent calculation including totals; their sum rarely equals the sum of the data points in a category.
Some numbers may be rounded up for ease of memorization.
** These areas are the most “messy” regarding benchmarking because accounting can lack sufficient breakout.
Administrative can also be impacted substantially by economies of scale. A hospice’s Administrative Salaries
DECREASE with size. Clinical Management Salaries can also decrease with increased census, although
sometimes it is less impacted than Administrative Salaries.
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Inpatient Units
In the table below are costs expressed as percentages of Net Patient Revenue (NPR) for a
typical Hospice Inpatient Unit. Average, acceptable and excellent amounts are displayed for
each measure.
Cost Category
a. Total Direct Labor (includes all unit staff)
b. Total Patient-Related
c. Indirect Costs
d. Contribution Margin
Direct Labor (Benefits included, 22%)
e. Nursing
f. CNAs
g. SW
h. Physician
i. Admissions
j. BC, VC, PC Other
Indirect Labor (Benefits included, 22%)
k. Administrative Labor (manager, ward clerk, etc.)
Primary Patient-Related Items
l. Medical Supplies
m. Therapies & Outpatient
n. DME
o. Oxygen
p. Ambulance
q. Pharmacy
r. Linen
s. Food
Average
64.93%
12.72%
29.39%
-7.04%
Acceptable
60%
12%
24%
4%
40.54%
13.25%
2.42%
3.86%
2.05%
2.5%
33%
15%
2.5%
4%
2%
3.5%
14%
12.5%
1.87%
4.19%
.43%
.46%
1.04%
4.04%
.96%
1.75%
2%
4.15%
.4%
.4%
1%
4%
1%
1.5%
* Each benchmark average is an independent calculation including totals; their sum rarely equals the sum of the data points in a category.
Some numbers may be rounded up for ease of memorization.
Benefits
Benefits are usually 22% of Salaries and Wages.
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Financial Fiduciary Responsibility
The financial duty of care or fiduciary responsibility looms large with any organization and
hospice is no exception. A hospice will cease to exist when it runs out of cash. Period. And
I’ve seen it happen many times from hospices with thousands of patients per day to hospices
that serve only a handful of patients each day. For-profit, not-for-profit, it makes no difference,
the financial aspect, if not managed well, will sink any hospice program. Therefore, it merits
considerable attention.
The Board is charged with the responsibly of making sure the organization is financially
sound. However, most board members do not understand enough about the business of
hospice to interpret the financial statements well and really understand what is happening
within the organization. Generally, most board members go immediately to the bottom-line or
look at the budget comparison with very little knowledge of the line items or categories of
operations. If the bottom-line is positive, then “Hurray” or if it is negative, let’s cut
administration or nursing without understanding specifically where the problem is.
How do you know that the budget you’re comparing performance to is valid? How do you
know if it’s based on sound practice? Most don’t. We understand that the bottom-line needs
to be positive, but how much should it be? Is any positive amount good enough? What is
included in Net Income? Does it include community support? These are the questions that
need to be answered?
Most hospice board members receive little training regarding the financial aspects of hospice.
If you’re reading this manual, obviously your hospice has made the decision to provide this
training because it wants the people that are ultimately making the strategic decisions
for the organization, to know what they are doing. Board members should not be nit
picking, or focusing on unimportant things such as bottled water expense or suggesting
shortsighted remedies to common hospice problems. Rather board members should be
concentrating on the important things.
The problem here is that most hospice board members have a hyper-sensitivity to financial
matters because they are somewhat familiar territory with most members. Combine this with
the fact that most hospices unknowingly provide poor financial statements and the result is
that a hospice can go off course without knowing it and waste tremendous resources. Now I
know that I am stepping on a few toes here, but this IS our area of expertise at MVI. We know
this area perhaps better than anyone in the business. The reality is, is that nobody, even
myself, could interpret what is happening at a hospice, especially from a board level, with the
financial statements that are provided to 85% of the board’s of hospices in this country.
Now this is not entirely the hospice management’s fault, though they should understand their
educational role, but often a matter of the hospice staff responding to financial presentation
formats requested by the board, who has limited knowledge regarding hospice operations.
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And of course, the hospice staff scramble to accommodate the Board’s request, even it is
excessive and kooky. I remember preparing for days for board meetings with 50 page
packets of financials and schedules and other information, which frankly, I doubt many
people actually read. Recognize that Hospice staff “jump” at Board requests and will spend
countless hours trying to accommodate the requests. There are only so many hours in a day
and realize that other things are going to be dropped or put aside to satisfy your request.
Therefore, don’t burden them with whims. Make thoughtful recommendations and simplify
whenever possible.
As an MVI client, we have provided your hospice with our suggested financial statement
formats based on the Quantified Best Practices in our industry; which is hundreds and
hundreds of hospices. As a board member, you might want to make sure that you are using
these financial statement formats. Our contact information is in this manual or can just
Google Multi-View Incorporated/hospice. The financial statements need:


to be concise, only a few pages in length
offer perspective, not only of your hospice’s performance, but how its performance
compares with hundreds of other hospices
In addition, the financial statements should use our standardized classification system so that
they are comparable to other hospices. They should also infuse of various quality measures.
Just because a hospice is hitting its financial numbers does not necessarily translate into
quality services to patients and families.
And now the BIG concept! Your financial statements should tell you how your hospice is
doing compared to its own proprietary Model. That is, a comparison of your hospice’s
performance with your own intentional and deliberate performance standards that create a
predictable high-quality experience for everyone using your services. This is what MVI calls
the Model.
MVI INSIGHT:
The Model is a big concept for a board member to understand and it is
covered in many of our other workbooks, audio messages, and films. You will also
want to listen to the audio message, The Model, which is only 14 minutes long. This
message will get you up to speed regarding this modern approach to managing a
hospice.
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Recommended Financial Reports
The worst statements are “lumped” financials where business units are not broken out in
sufficient detail to make informed decisions. If your hospice has an IP unit, Community
Bereavement, Palliative Care, Home Health or other strategic business units, they need to be
segregated from hospice homecare operations. Hospice homecare is the Mother Ship. It is
the basis for all other hospice business segments and always needs to be segregated from
all other business segments. It needs to be separate from IP units, palliative care programs,
and other programs.
Our recommended financial statements for general board use are:



a Balance Sheet
an Income Statement in an MVI format based on standardized classifications for
comparably and avoidance of confusion
and two reports that come directly from our systems
o the Executive Dashboard from the MVI Benchmarking Application (BA)
o the Executive Facts report from the MVI Management Application (MA)
These reports automatically segregate and classify all of the major components of the
hospice in the SAME logical formats. These reports, in conjunction with the Model, create the
organizational transparency that so many entities desire.
For the finance committee, we would additionally recommend:


a Statement of Cash Flows
a periodic review of Aged Accounts Receivable (AR) and Accounts Payables (AP)
Accounts Receivable should always be a great concern for a hospice board member as
delays in payment due to documentation issues as well as delays from Medicare payers will
drive a hospice out of business quickly unless it has adequate cash reserves.
The Executive Dashboard
The Executive Dashboard from the Benchmarking Application is particularly powerful for
board members because it contains most all of the economic indicators as well as many key
quality indicators regarding insight as to what patients and families are receiving. Above all,
the Executive Dashboard provides perspective. This perspective is what separates an
amateur hospice board from a truly professional and competent board. Without this
information, your hospice is flying blind. Without this benchmarking information with a side________________________________________________________________
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by-side comparison of your hospice’s performance, you are operating on a “Trust me baby”
level, which is NOT in line with the duty of care requirement.
Executive Dashboard Excerpt
Sample of Search Criteria Input Screen available for all MVI clients.
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The Financial Aspects of the Model
Now, let’s talk about the Model, at least the financial aspects of the Model. Again, we have
published a lot on the subject matter, but as a board member it is important that you become
very comfortable with the Model concept.
The Model is a modern approach to hospice management. It is used by the most progressive
and advanced hospices in our country, both in terms of quality and profitability. The basic
idea behind the Model is that of intentional design of hospice services. That is, rather than
rely upon a somewhat organic operational approach, which most hospice have, the hospice
would create a high-quality predictable experience.
There are two huge problems in hospice today.


We have a quality problem and
a financial or business problem
The quality problem stems from the fact that there are huge variability issues in
hospice…among hospice providers as well as among individual clinicians in each hospice. A
patient/family can have a great hospice experience with Nurse A and a mediocre experience
with Nurse B. A patient/family can have a good experience with Hospice Aid A and a crappy
experience with Hospice Aid B. The Model systemizes the experience into teachable and
predicable stages that increases the overall average of care.
Simultaneously, it addresses the financial or business problem. The problem is that our
hospices cultures have tended to recoil from anything that associates or links hospice to the
idea that it is a business. Starting with patient and family in mind, the Model works itself
backwards and translates the care experience into quantifiable measurements along with all
of the supporting administrative functions. The Board of Directors is part of this equation.
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What is the Model?
The Model is the intentional design of a hospice
culture that simultaneously balances purpose and
financial realities to create a sustainable World
Class experience.
The Model is an approach to operating a hospice as an integrated, coherent and coordinated
system where all entities and persons involved experience something special and World
Class. The Model approach is needed by hospices for many reasons ranging from quality
issues to changes in the hospice economic environment. The Model forces a hospice to
define itself, measure performance and challenge itself to be an ever-improving organization.
MVI provides the conceptual framework and many of the supporting systems needed to
create and sustain the Model at your hospice. This is “the formula or recipe” we recommend
based on years of experience assisting, observing, and measuring hospices. This cumulative
and collective insight has led us to the belief that the culture of a hospice is the heart of the
matter...and it will be the inability of many hospices to change culture that will be their demise
in future years. All other things are subservient to the culture as culture shapes the thinking
and behavior of an organization. The definition of the Model displayed above conveys the key
concepts.
Why Should a Hospice Create a Model?
There are two primary reasons for a hospice to create a Model:


To Provide a Predictable High-Quality Experience.
To Operate a Financially Viable Hospice Now and in the Future.
The hospice industry faces two huge problems. We have a Quality Problem and a Financial
or Business Problem. The Quality Problem stems from the tremendous variability of care
within our industry. This variability exists among different hospices as well as among the
clinical staff within each hospice. Patient and families can have a great experience with one
clinician and a horrible experience with another. The Financial or Business Problem is that
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Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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too many hospices are not building sufficient financial reserves by operating sound business
models. In fact, most hospices have a severe cultural problem in that many detest the idea of
being real business with the same financial realities as other enterprises such as payrolls
needing to be met, supporting functions needing to be performed, infrastructures maintained,
and money set aside for the financial “surprises” that loom in the Medicare reimbursement
system.
The hospice world is constantly changing. It seems that change is the nature of the universe.
Rather than viewing change as negative, see it as the natural order of things and that change
is really the only hope we have for a better tomorrow.
There are many changes and issues in the hospice environment that make the adoption of a
sound and intentional Model important.





Proposed Medicare rate cuts
Proposed changes to our payment system (MedPAC recommendations)
Increasing governmental scrutiny
Ever-increasing competition
CAP
All of these major factors point to a need to increase quality and decrease overall costs. It is
important to understand that, for most hospices, there must be an “overall” decrease in costs.
It is important; however, to understand that many areas of cost will need to be increased to
provide a World Class experience. Others will need to be decreased. The key word is always
BALANCE.
MVI INSIGHT:
We must leave behind the idea that there is a direct correlation between
spending and quality. Spending more money in areas does NOT mean that higher
quality will result. Giving areas attention WILL increase quality.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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The Benefits of Creating and Using Models
There are many reasons for a hospice to adopt a Model. A good Model should include
financial and operational measures. What will it do for your hospice? It will dramatically
improve everything…internally and externally. Here is a partial list of benefits:


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




It causes a hospice to think about what it specifically provides or aspires to provide
ideally.
It defines the work of the hospice.
It can be used to get everyone on the same page.
It provides “optimal” measures to compare against actual performance. Either you are
“in” or “out” of the Model.
They are flexible and change with fluctuations in patient volume.
With a Model, “budgeting” takes hours and not months.
It helps a hospice build reserves.
It will improve your value proposition to referral sources and consumers.
A hospice can grow larger by operating with precise information rather than on gutfeelings or opinions.
Breaking Down the Barriers
There are “barriers,” silos and invisible divisions in hospice. Aren’t we supposed to be the
interdisciplinary, role respective and caring compassionate people that make the world a
better place? Hospice needs to be a united team, where everyone is on the same page and
is moving in the same direction. This is not what happens in many hospices. There are “us
versus them,” “clinical versus administration,” “care versus the dollar” mentalities that
separate people. These separatist ideas and attitudes are stupid and childish. They have no
place in the modern hospice. It is about all of us - each performing his or her duties with
professionalism and grace.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Financial Disdain for the Numbers, especially Money
Without air, humans do not survive. Money is the equivalent in the hospice world. It is
important that we value and embrace the idea that it is OK to think about care AND financial
balance. On a personal level, if the hospice stopped paying you for your efforts, your life
might become a little more uncomfortable. For most people, this would be more than an
inconvenience; it would threaten our ability to continue. The same logic applies to our
hospice. Here are some great reasons to be profitable and build reserves:

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

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Medicare Reimbursement Cuts
Ever-Increasing Competition
Public Relations (PR) Disasters
Increasing Costs
Management Surprises
Ability to Take Advantage of Business Opportunities
To Care for Indigent and High Cost Patients
Overcoming the “Great Dilemma”
Many hospice people have trouble with the idea that hospice is a “business.” There is an
“internal conflict” that some find disturbing as there is a perception that the linkage to money
somehow lessens the commitment to the mission. We call this the “Great Dilemma.” This
internal conflict must be resolved within our hospice cultures.
Many people in hospice think that profitability is wrong. They think that it is “evil” to do this
work and make money. This mindset must go. It is not only right for our hospices to be
profitable; it is the only way to survive! This anti-profit mindset is not compatible with reality. If
you are unable to become comfortable with operating within a sound business model, you
should “self-select” yourself from the hospice to make space for someone else.
Avoid being Dependent upon Community Support
Hospices that have not built adequate reserves and are reliant upon community support are
ONE public relations disaster away from being bankrupt. If a very negative accusation,
whether true or untrue, is disseminated in a community, community support will drastically
diminish and even “dry-up.” In these cases, it is almost impossible for a hospice to change its
mode of operations and culture fast enough to outlast the situation. This is one of the primary
reasons why it is so critical for a hospice to learn to operate with only Medicare, Medicaid,
Commercial Insurance, and Self-Pay revenues.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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There is More than Enough to Fund World Class Hospice Care
Let’s just say this…there is more than enough money in hospice to fund a world class
experience right now. But it has to be intelligently directed, which brings us back to the
Model.
With every area of the hospice denominated by these NPR amounts, two wonderful things
happen. (1) The organization is unified (people see that their actions impact each other and
that no one lives in a silo) AND (2) a powerful organizational transparency is created almost
immediately. Remember, the SAME financial formats and reports are used throughout the
entire organization with NPR amounts clearly associated with each area.
If a hospice has the foresight to teach these amounts to all staff…from front-line staff, to
volunteers, to the board of directors, suddenly anyone in the organization can evaluate at
least the financial performance of the organization. No longer are board members dependent
upon “trust me baby” financials. It’s right there…and if the Executive Dashboard Report is
used, you see your hospice’s performance compared to the rest of the hospice world, as well
as with the MVI Model. Now the MVI Model amounts are our suggestions for the everyday
hospice in America. And in the absence of your own proprietary Model, they should be used.
The MVI Model amounts are the default. However, if your hospice has developed its own
proprietary Model, then your custom amounts take precedence. After all, the Model is not
about making all hospices look the same. It should be about creating a great experience
customized to the communities the hospice serves. Your hospice might provide a slightly
different scope of services or more Hospice Aid or therapies. In hospice, we have the ability
to shape the experience unlike other flavors of healthcare in that the patient and family can
say “hold the pickles and mayo for me, but I would like that secret sauce!”
Financial Reserves
In the future, hospices are going to need cash and in many cases, a lot of it. My advice is that
a hospice builds its reserves to 7-9 months of current operations. This may sound like a lot,
but as healthcare reform looms and Medicare payers tighten their payment processes and
challenge payments, the payment process is only going to slow down. Yes, your hospice may
ultimately collect what it is owed, but can you afford to operate until you get paid? This form
of financial constipation will come in waves over the next decade, and only the hospices with
cash that have operated efficiently will be left standing. All others will be assimilated into
larger hospice corporations. NOW is the time to fill your storehouse…and it will be done with
the Model.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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You can be certain about this…the Model will never go out of style or not be en vogue. The
Model is built for change. It is build for Medicare rate cuts. It is built to withstand competitive
pressures and quality challenges…and your hospice is doing it or you wouldn’t be using this
workbook!
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Examples of Model Designs
There are many examples of hospice overall Models. For convenience, when discussing
Models, we often use three consecutive numbers which represent the various major
categories of cost. For example, 38/18/30 would mean:
38/18/30
Direct Labor
Patient-Related
Indirect Costs
The MVI Model – 38/18/30
This used to be 38/22/30. However, so many hospices can achieve the 22% Patient-Related
goal that it needed to be lowered. This produces a profit of 14%.
Typical Hospice Model – 42/19/35
A typical hospice will have a Model of 42/20/35. This is often an “organic” model of business
that has evolved over time. This produces a profit of 3%.
Andrew’s Model – 38/17/27
Many people think that the MVI Model is Andrew’s Model. However, it is not. The MVI Model
is a model that is “achievable” for a typical hospice. Andrew’s Model would be 38/17/27 which
would render an 18% profit. Key deviations would be:
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Increasing RN/Nursing/SW/PC Caseloads
Doubling Hospice Aid Services
Doubling Volunteer Services
Adding Homemakers as a service component
Patient-Related costs would be reduced to the 80% percentile by using select vendors
Most all Indirect Costs would be slightly less than the MVI Model producing a
CUMULATIVE 3% savings.
Maximum Efficiency Hospice Model – 32/12/23
How efficient can a hospice become? We don’t know. However, a hospice can provide a high
quality service for far less cost than most hospices can imagine.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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The Four Areas of Design Work that Impact
Everything
At the heart of the Model are four areas of design work that are essential to truly successful
Model implementation. They are:

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
Team Design
o What disciplines, caseloads, costs?
Visit Design
o What are the visit structure/teachable stages of the visit? How many, how long?
What are the key messages and communication? What does the
documentation need to look like and when is it done?
Product Design
o What are the physical products such as teaching/communication tools used to
enhance the experience?
Supporting Services Design
o What are the supporting services/functions, costs, specific practices?
The first three of these areas (Team, Visit and Product Design) focus on patients and families
since this is the heart of what we do. The design of Supporting Services is important as these
functional areas are necessary to serve the people on the front-lines of care, providing help
and assistance to make the provision of care possible. When a Model is properly
implemented, it results in superior hospice care which is balanced. As we dream about “what”
and “how” hospice care can be provided, the Model tools give us a great indication of the
financial implications of our design choices.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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The Model is NOT Financially Driven!
Many people may view the Model as simply a financial tool to monitor and control costs.
Although this is true and many hospices will use it expressly for such purposes, the true goal
of Model implementation is to create a high-quality predictable experience. Having quality
and financial balance are not mutually exclusive goals.
MVI INSIGHT:
The Model begins at the frontlines of care and all other functions are
viewed in relation of how they support that care. The Model should not be
communicated as financial tool or your hospice will only derive a small portion of the
Model’s value. The Model is not just about NPR amounts. It is about the intentional
design of care to create a high-quality experience that is financially balanced.
It is important that our consciousness regarding hospice finances is heightened and is
proportionally balanced with the purpose of hospice. Purpose is still the primary reason we
are in hospice. Financial aspects are secondary, albeit essential.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
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828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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No Budgets!
The Model Does Not Use Budgets but Rather NPR
As a board member, the Model will represent a departure from traditional management
approaches. Two areas of special note are:


The Non-use of traditional Budgets
And the use of NPR or Net Patient Revenue as the primary financial measurement
Don’t be alarmed at the thought of not using a budget. These ideas are tried and true and
have an almost magical impact on a hospice. Let’s discuss both of these points.
When you think about traditional budgets, they do not make much sense. The process is
started about mid-year, they take months to complete, they require huge portions of time and
even emotional energy, people submit greatly exaggerated amounts because they know their
submissions are going to be wacked by the CFO, and then the organization gets 3 months
into the budget year and patient volume is materially different than projected. Then come the
calls for a re-stated budget as the volume variance masks the efficiency variance, so that
board members can’t tell whether the variances are volume-based or efficiency-based.
Ultimately, the budget and budget process end up being one of the most non-value adding
activities for most organizations. When, by contrast, a hospice could create a Model that
would be used perpetually and simply adapted when necessary or advantageous.
With a Model approach, the best attributes of the traditional budget process are kept such as
census goals. However, the period to period financials are flexed according to patientvolume. This totally eliminates the volume variance problem. All that is left is the efficiency
variance which is compared to actual hospice performance. If a budget is needed for external
use such as governmental reporting or for foundations or other entities, a budget can be
produced by projecting the current Model 12 months into the future. Once established, the
Model is used perpetually and is modified as needed. Thus, all of the time and effort is saved.
But this is not the big win. The greater benefits come from:

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the clear establishment of operational standards for all areas;
simplicity of the business model, in that the same measurements can be used for long
periods of time, thus saving communication and educational problems;
unification of the hospice;
and organizational transparency.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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When operational standards are clear, then accountability becomes a matter of monitoring
and addressing performance with rewards and consequences. Most hospices have an
accountability problem. The Model goes a long way towards solving this problem.
The Model simplifies the hospice business, segregating the various components into logical
groupings and classifications so that informed decisions can be made based on precise
information. We have found that hospices that do “less well” have higher satisfaction scores
than hospices that try to do a lot sloppily.
The Model uses NPR or Net Patient Revenue as the primary unit of financial measurement at
the hospice. There are many other measures of course, but NPR is what you will use as a
board member to judge financial performance as part of your fiduciary duty of care.
Your hospice should have or be developing its NPR amounts. As a board member, you need
to become familiar with these amounts. Become familiar with the Model NPR amounts
and use them to evaluate your hospice’s performance.
The mathematical equation to calculate NPR is quite simple. We can take any financial
revenue or cost amount and divide it by Net Patient Revenue. This amount is only Medicare,
Medicaid, Commercial Insurance and Private Pay. It is less Bad Debt and Contractual
Allowances. It does not include Pass-Throughs or ANY community support. That is, it does
NOT include any donations, memorials, fundraising or any gifts. It is strictly earned revenue.
It helps us answer the question, “Could our hospice make it without community support?”
Because community support can go south. Experience one really bad PR disaster, whether
substantiated or not, and see what happens to community support. And it will happen. There
are community hospices that were dependent upon community support with hundreds of
patients a day that have been wiped out in a matter of months due to inadequate cash
reserves and dependency upon community dollars.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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One of the most noticeable “shifts” a hospice will experience when implementing the Model is
an absence of traditional budgets. Within a true Model system, the hospice does not use a
budget for management. Rather, the hospice operates based on a dynamic and flexible
system that allows a hospice to critically evaluate past performance as well as forecast the
future.
The absence of traditional budgets is a big mindset change for many hospices, CEOs,
Boards of Directors and especially CFOs. Many hospices will not be able to completely move
to an operational world without budgets for several years. This is the direction that we
encourage. Also, we realize that the “outside world” and many traditional Board members will
still want “budgets.” The Model system can produce a traditional static budget as needed to
appease adamant individuals. The Model can also satisfy other entities such as banks,
governmental & regulatory organizations, related organizations, etc. The budget will be
based on the current Model projected into the future.
There are many reasons why the modern and progressive hospice will not use the traditional
static budget.
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Almost Instantly Outdated – Static Budgets often lose their comparative value with
fluctuations in patient volume. Any increase or decrease in census will cause material
overage or underage in census-sensitive areas. Often the budget will have to be
“revised.” Also, static budgets are normally all but ignored by the end of the year! All
focus is on “next year’s budget.”
A Waste of Time – Most hospices spend tremendous time (months) creating the
budget. It is truly one of the most wasteful uses of resources and energy in most
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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

hospices. A budget is usually outdated within the first months unless census
approximates the budget (as mentioned above).
The Idea of Budgets is Negative – Budgets do not excite people. They are not
motivating. They are the opposite. Budgets are limiting, truncating, and stiff. The term
budget doesn’t stir the imagination and garner much enthusiasm or cheers. A “Model,”
or whatever term you want to substitute, is alive and flexible. A new name also
accommodates the best ideas.
Budgets Offer Little Comparability or Perspective – Traditional budgets are difficult
to compare to other similar organizations. Few aspects of budgets lend themselves to
comparison to gain the much needed perspective that separates true hospice
professionals from amateur hospice leaders.
When we contrast the Model with traditional budgets, the choice is obvious:

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The Model is always based on Current Census – The Model automatically adjusts
every category based on Net Patient Revenue (NPR) which is derived from census.
You are always comparing “apples to apples” with the Model approach. In accounting,
you have two types of variances, volume variances and efficiency variances. The
Model eliminates the volume (census) variance and all that remains is the efficiency
variance. With a traditional budget, these two variances are “combined” making
decisions drastically more difficult.
The Model Established Standards - The Model forces a hospice to establish
financial and operational standards. Areas include: caseloads, weekly visits, visit
durations, costs parameters, etc. These standards apply regardless of fluctuations of
patient volume!
Transparency – The Model based on NPR creates the immediate transparency that
so many organizations seek. Percentages are widely understood by most people.
Because the Model uses percentages as the common unit of financial measurement
for all areas, anyone that is familiar with the Model amounts could easily evaluate the
performance of any department or area. This would mean that if the Model were
taught throughout a hospice, ANYONE, from staff member to Board of Director to
volunteer, could judge financial performance.
Comparability – Because the Model is constructed on a Percentage of Net Patient
Revenue basis, a common unit of measurement, results are easily comparable to
other hospices. In fact, each line item is comparable so, a hospice is not even limited
to comparing grand totals or broad categories. Again, perspective and insight into the
overall hospice world separates the hospice professional from the amateur hospice
leader.
Once Established, the Model takes Little Time to Maintain – The Model is a
perpetual system. It continues to be used indefinitely until the decision to change it is
made. There is no need for months of effort to create something new. A Model can be
changed in minutes, if needed.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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




The Model is Flexible – If the Model needs to be changed it can be altered in
minutes to accommodate the new direction. It is not the alteration of the Model,
mechanically, that is what is time consuming. It is the “what” and “how much”
questions that require much mental work. However, this is exactly where we should
be spending our time, thinking of improvements rather than thinking about the
mechanics of measurement.
The Model is More Easily Understood – People “get’ the Model concept. It is that
simple! They understand easily that the “pieces must work together” by the mere
mention of the word Model.
The Model Still has Static Goals – A well developed Model will have static or
established goals. These are similar to the goals in the traditional budget in that
normally annual goals are created. The Model establishes goals as well. However, the
goals or targets pertain to things like ADC, Model percentages, productivity
measurement, etc. It does not pertain to static dollar amounts for each area of the
hospice. Also, we recommend the use of the term “goal” rather than target or other
term. Goal has a less negative connotation.
The Model can produce a Traditional Budget when one is Needed – Need a
budget report for the United Way or the Board of Directors that does not understand a
Model approach? The Model System can produce an annual budget in minutes as the
current standards are projected into the next twelve months. These amounts can be
uploaded via F9 into your accounting system to produce a traditional budget report.
The Model becomes a Forecasting Tool – Relating to the point noted above, the
Model can be used as a forecasting tool. A hospice can change the standards in the
Model and project operational performance into the future. The Model becomes a
decision support tool.
We are completely biased regarding the use of the Model over traditional budgeting. It is a
“no-brainer” in our opinion. It is the way of the modern hospice.
MVI INSIGHT:
Transparency – The Model based on NPR creates the immediate transparency
that so many organizations seek. Percentages are widely understood by most
people. Because the Model uses percentages as the common unit of financial
measurement for all areas, anyone that is familiar with the Model amounts could
easily evaluate the performance of any department or area.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Gaining Perspective and the Reality Check
As a Board Member, it is important that you have perspective regarding the ever-changing
hospice world. It is also important to realize that you have immediate access to it. The Model
is derived from MVI’s proprietary benchmarking data. You have an idea about the Model at
this point. You will understand it VERY well as you serve on this board. However, now would
be a good time to take a hard look at your hospice operations compared to other hospices.
If you are implementing the Model, you will need perspective...especially financial perspective
since so much of the Model is about increasing the business consciousness at the hospice.
This perspective will come from MVI Benchmarking.
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Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
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©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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How can you get your benchmarking results?

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
You can ask for this report to be sent to you by MVIB staff (772-569-9811).
You can ask the CEO, CFO or other person at your hospice, to run the reports for you.
The system can be installed on your PC and you can run the reports yourself.
We recommend that hospice CEO’s and other
primary leaders have the MVI Benchmarking System
installed on their computers.
The CEO and other leaders should have direct access to this information. Having to ask the
CFO or other financial person is simply unnecessary since the system is so easy to use.
What you should be paying particular attention to is the Percentile Rankings columns. They
are included in every report. The 50th percentile would mean that your hospice is “in the
middle” for a particular data point. Half of the hospices in the query you selected are above
you and half are below you. If an area is in the 77th percentile, 23% of the hospices are better
than you and 76% are worse than you.
The data in this example is for illustration purposes only. The numbers are from a test database.
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
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828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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If your hospice percentile rankings are
bad, resist the impulse to reject the data.
Look at it and understand it. This will fuel
you to make the necessary
improvements.
A little discontent is a good thing…
This is where many hospice leaders falter. If the percentile rankings are not very good, the
leader retracts. The human capacity for “self-justification” is almost unlimited. A courageous
leader recognizes that it is only when we face the quantified facts that we can really improve.
Realize that the Benchmarking System (BA) is changing daily as hospices are constantly
updating their information since it is largely an automated process. The overall fact is that
hospices are improving their performance year after year. As an industry, we are getting
better.
To gain access to the Benchmarking System (BA), call the MVI Benchmarking office at 772569-9811. They will help install the application in minutes and give you your pass codes.
They will also provide a short training, if necessary. The system is quite intuitive and relatively
easy to learn and interpret.
NOTE: The Benchmarking System (BA) should be on the CEO’s, CFO’s, or other key
financial staff member’s computer at minimum. Many hospices also have the
application installed on Clinical Leaders’ computers.
,
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Multi-View Incorporated Systems
PO Box 2327
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©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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The Decision Dashboard
There are several utility tools that the hospice leaders should become “familiar” with
regarding the Model. The primary one of board member interest would be the Decision
Dashboard since it is one of the primary tools your hospice will use to monitor your
performance in relation to your Model on an on-going basis. The Decision Dashboard is what
you will have when the Model is implemented and you have subscribed to this level of service
(there is an additional month cost associated with it). The following is main screen:
The Decision Dashboard
At first, you may be a bit overwhelmed at the “data density.” This initial feeling will quickly
diminish as you become accustomed to the dashboard and learn to quickly go to the areas
that need attention. What sets the Decision Dashboard apart from other is this:
This tool is a true decision support tool.
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Multi-View Incorporated Systems
PO Box 2327
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828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Specifically, what does this mean?
MVI INSIGHT:
The Decision Dashboard provides the ability
for ANYONE in the organization to quantify
the financial impact of proposed changes to
currently attainable performance without being
dependant upon accounting staff.
Therefore, a Clinical Leader or any person within the hospice could suggest a change or a
combination of changes and the dashboard would do the complex calculations of quantifying
the financial ramifications based on current performance…that is…where your hospice is
NOW. For example, in moments, you could quantify the financial impact of changes to:
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

Average Caseloads
Weekly Visits
Visit Durations
Wage Adjustments
Benefits Adjustments
Overall Model Adjustments
Patient-Related Items
Indirect Areas
Extracurricular Programs
The dashboard will automatically calculate the impact of such changes. This is not just about
pretty packaging and slick programming. The Model System is fused with proprietary
knowledge and alerts that could not be produced by just good programmers. There is a
depth of knowledge coded within the system that will make leaders more aware and
focused on their respective area, as well as the ramifications on the ENTIRE HOSPICE.
In addition, built-in “What If” calculators are available for many areas. What if caseloads were
decreased? What if visits were five minutes shorter? What if Indirect Costs were 2% less?
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What if Medicare cuts our RHC rate by $10? What if? How would these changes impact the
hospice? The Model Maker is a powerful tool to quantify the impact of changes!
There are several things that are significant about this tool:





It is automatically produced after your hospice uploads its data for MVI Benchmarking.
It is based on your currently attainable performance. If you made changes to current
performance, what would be the financial impact NOW!
Your hospice’s Model is incorporated into the tool so you can easily judge
performance.
There are indicators (alerts) showing any area that is outside of the upper and lower
control parameters that your hospice establishes. They are marked in colors. Anything
within your upper and lower control parameters is not highlighted. Thus allowing you to
focus on the areas that need attention.
MOST IMPORTANT: Any person in the organization can see the ramifications of
proposed changes. Therefore, from the financial perspective, precise information is
obtained so that resources and energy can be intelligently directed. Not only can the
person proposing a change see the result, it can be used to show others and to teach.
Therefore, the Decision Dashboard is a great teaching tool…and teaching is the core
of the Model organization.
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©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Your Role as a Board Member
Board Member Role:
Key Points:

Exercise Fiduciary

Duty of Care.
You are to be an Example in the community as well as be a positive

influence on the CEO and all staff members.
You are to work Productively and Directly

Understand the Model, especially NPR amounts for:
with the CEO.
o Direct Labor
o Patient-Related
o Indirect Costs
 Avoid Micro Management.
 Contribute to the hospice.
.
As corporate responsibility issues fill the headlines, the activities of corporate directors are
being watched closely. Health care boards of directors have the unique opportunity to take
leadership by putting in place quality systems that will advance both their organizations’
respective missions and the nation’s health. A member of the board of directors has many
different responsibilities.
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The Responsibilities of the Board of Directors
MVI INSIGHT:
The basic fiduciary duty of care principle requires a director to act in good
faith and with the care that an ordinarily prudent person would exercise under similar
circumstances.
This principle is being tested in the current corporate climate.
The Fiduciary Duty of Care
The Board needs to keep abreast regarding the facts of the business and overall direction of
the hospice on a general level and not the operational level. The details of why “Mary Sue
walked out” would be an example of an operational issue that would be inappropriate on a
board level.
The basic fiduciary duty of care principle requires a director to act in good faith and
with the care that an ordinarily prudent person would exercise under similar circumstances.
The fiduciary duties of directors reflect the expectation of corporate stakeholders regarding
oversight of corporate affairs. Personal liability for directors is a reality in today’s corporate
world. This liability includes removal, civil damages, and tax liability, as well as damage to the
director’s reputation. Of the principal fiduciary obligations or duties owed by directors to their
corporations, the one duty specifically noted by corporate compliance programs is the duty of
care. As the name implies, the duty of care refers to the obligation of corporate directors to
exercise the proper amount of care in their decision-making process.
State statutes that create the duty of care and court cases that interpret it usually are identical
for both for-profit and non-profit corporations. Non-profit corporations are formed to achieve a
specific goal or objective (such as the promotion of health), as recognized under state nonprofit corporation laws. It is often said of non-profits that “the means and the mission are
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inseparable.” This is in contrast to the typical business corporation (for-profit), which is often
formed to pursue a general corporate purpose.
In most states, duty of care involves determining whether the directors acted



in “good faith,”
with that level of care that an ordinarily prudent person would exercise in similar
circumstances, and
in a manner that they reasonably believe is in the best interest of the corporation.
In considering directors’ fiduciary obligations, it is important to recognize that the appropriate
standard of care is not “perfection.” Directors are not required to know everything about a
topic they are asked to consider. They may, where justified, rely on the advice of
management and of outside advisors. A director has a duty to attempt in good faith to assure
that:


a corporate information and reporting system exists, and
this reporting system is adequate to assure the board that appropriate information
regarding applicable laws will come to its attention in a timely manner as part of dayto-day operations.
Compliance Function
In addition to the challenges associated with patient care, health care providers are subject to
huge amounts of and sometimes very complex sets of rules governing the coverage and
reimbursement of medical services. Because federal and state-sponsored health care
programs play such a significant role in paying for health care, non-compliance with these
rules can present substantial risks to the health care provider. The board should reasonably
assure itself that the compliance function is appropriately free of undue constraints and that
the chief compliance officer is able to provide the board with objective information, analyses,
and recommendations.
The concept of “checks and balances” in the compliance reporting process is important,
regardless of who has formal responsibility for the compliance program. Direct reporting to
the board and alternative reporting processes may also promote the integrity of the
compliance program, while respecting the operational preferences of management.
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Increased Focus on Quality and Patient Safety
There is currently an increased focus on quality and patient safety. This means that oversight
of quality is being recognized as more of a core fiduciary responsibility of health care
organization directors. Health care organization boards have distinct responsibilities in the
areas of quality of care and preserving patient safety because these areas are at the core of
the health care industry. They also effect the reputation of each health care organization.
Quality is also emerging as an enforcement priority for health care regulators.
Directors are also expected to make inquiries to management to obtain the information
necessary to satisfy their duty of care. Important new policy issues are arising with respect to
how quality of care affects matters of reimbursement and payment, efficiency, cost controls,
and the working relationships between providers and individual and/or group practitioners.
Part of the oversight function that board members are expected to review include how the
organization handles issues of patient safety, appropriate levels of care, cost reduction,
reimbursement, and how the providers and practitioners work together.
This is likely to include:




being sensitive to the emergence of quality of care issues, challenges, and
opportunities;
being attentive to the development of specific quality of care measurement and
reporting requirements (including asking the executives requesting periodic updates
from the executive staff on organizational quality of care initiatives and how the
organization intends to address legal issues associated with those initiatives.
staff for periodic education); and
requesting periodic updates from the executive staff on organizational quality of care
initiatives and how the organization intends to address legal issues associated with
those initiatives.
Cost Efficiency and Duty of Care
Perhaps one of the most critical—and often misunderstood—components of health care
quality is the relationship between overall quality and cost efficiency. It is becoming more
widely understood that quality and efficiency work together and not against one another as
elements of an effective health care system.
Health care organizations, with oversight by their boards of directors, will be required to be
mindful of the anti-kickback statute, the physician self-referral (Stark) law, civil money penalty
statutes, the Health Insurance Portability and Accountability Act (HIPAA), federal taxexemption standards, and antitrust law, among other legal areas.
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Prior Board and Other Experience
You may be new to the board or maybe you’re served on the board for a long time. Maybe
you have served on many boards. Regardless of your experience level, there are things that
board members need to understand relating to serving in this oversight capacity.
You may have come to the board with much experience. The experience could be in various
industries or you can read financial statements well. Perhaps you have operated a large
company. This is all wonderful and valuable knowledge, but it doesn’t mean that there is a
direct correlation to the workings of a hospice. Just because it was done this way or that way
at the bank or at the factory with the big smokestacks on the edge of town does not mean
that it translates to hospice care. Even if you have tons of experience with large healthcare
providers, recognize that hospice is has its own unique characteristics as well as elements
common to the human condition.
With this said, and again, not to diminish valuable input, be careful and thoughtful when you
introduce ideas, seeking to understand before spilling off pat answers. As you gain
experience, your input will become more deliberate. On the other hand, a fresh set of eyes is
always a good thing and the quote “lack of experience” can bring in new insights. However,
keep tact and grace in mind and a spirit that seeks to understand first.
Hospice Cultural Hallmarks
We are dealing with people at one of the most traumatic times in their lives. Hospice is
different in that the people that work at the hospice literally see themselves as “called” to this
work and view it very much as a ministry. It is NOT all about numbers and margins. It is about
patients and families. Also you will find that hospice people are not as jaded as people in
other flavors of healthcare. This ministry-mindset or intention does, in fact, set hospice apart.
This ministry-mindset has an unintentional byproduct in that most hospices are not very
business oriented. In fact, they often disassociate with any idea of “linkage to money.” I have
spent a great deal of my life trying to improve the business balance in the hospice world. We
have to mature organizationally, especially in the financial area, keeping intact the essence of
what makes hospice great, WITHOUT disturbing the mission and the uniqueness. This is an
example of where your influence as a board member is needed. In addition, we realize that it
usually takes an “outside influence” or view from a different perspective for an area to
improve greater than a 30% deviation from the norm. Your experience and influence will play
a role in the introduction of new and exciting insights that may take the hospice to a higher
operational place.
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PO Box 2327
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828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Examination of Motives
An examination of motives is in order as a member of the board.
Are you sincerely interested in the minimization of human suffering?
Are you genuinely concerned with this particular hospice organization?
Are you on the board as something the company you work for requires?
Do you like to see your name in the margin of the letterhead?
Do you have an agenda, possibly with another healthcare entity? Perhaps a conflict?
Or are you really here to serve and want to assist the hospice in its overall upward
momentum and believe you have a contribution to make?
If your motives for being on the board are honorable, great! If not, it is time to gracefully step
aside and move on.
Asset or Liability?
You should bring something to the board. You need to be an asset. The hospice needs
impact players that can support the organization and be an asset. Are you an asset or a
liability? We have seen far too many boards that were a liability, needlessly holding a hospice
back, truncating its advancement with outdated and small-mindedness. So are you an asset
or a liability?
Now, I’m not trying to be condescending, but the truth is that most hospice board members
do not really know much about hospice operations. Perhaps we have a few general ideas
about hospice, but many times the depth level is quite shallow. Don’t be too hard on yourself.
You’re in the same boat as most hospice board members across the country! And, by the end
of this workbook; you will be able to evaluate things with vastly expanded confidence and
awareness.
Many board members come to hospice thinking that it is an easy business. However, the
reality is that hospice is a complicated business. When you consider all that a hospice does
and how it is paid, it is not a simple thing to do, especially if hospice work is being done well.
Combine this with the fact that many hospice’s have other programs such as IP units,
Community Bereavement, Residential Units, Adult Day Care, Palliative Care and other extracurricular programs each with different work processes and you can see how a hospice can
become a quite complicated organization.
In a nutshell, hospice receives a flat or set amount for each day for the various levels of care,
regardless of the costs incurred. It is a true managed care system. Hospice is a capitated
system, meaning that the amount of money a hospice receives is limited through several
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methodologies and is expected to cover all costs associated with the terminal condition even
if the costs are greater than the reimbursement. The key is the management costs in relation
to the mix of patients…patients with a wide variety of needs and illnesses. It has to be
managed in the aggregate or the whole. For example, if a patient is on hospice for 30 days,
the hospice receives on average, approximately $135 a day and must pay all costs
associated with the terminal condition regardless of whether or not the costs exceed the
reimbursement. Too many of a certain type of patient or too many patients that live for only a
short period of time cause a hospice financial hardship. There needs to be a balanced mix of
patients that live long enough to enable a quality hospice experience and that help a hospice
spread its costs over the population of patients it serves. Theoretically, a hospice’s operations
should reflect the demographics of death in its community, segregating out those that could
not benefit from hospice services.
The Cardinal Sin
As a board member, you must help your hospice avoid the cardinal sin. The cardinal sin for a
hospice is to utter the words that communicate the message that we cannot take new
patients because we are busy, short-staffed or somehow have a compromised intake ability.
Hospices NEVER recover from such words. A hospice can provide excellent service to a
community for decades and for some reason that is beyond my understanding, they will
never forgive a hospice that puts out this message. In fact, I would terminate anyone at a
hospice that ever utters these words in public. If you want to see your hospice census
plummet and not recover…even to the point that you will have to change your name because
of the distaste in the public palate, then allow this message that we can’t take new patients to
get out.
Recognizing your Contribution
Recognize your contribution. What are you bringing to the organization? The contribution will
vary according from board member to board member.

Is your contribution to use your influence, your connections, your access to people that
could advance the hospice?
 Is it your spirit of volunteerism, your fire and passion for the vision? Hospice was born
on the front porches and in the church basements of this country…by people that
received no compensation for their efforts. Is volunteerism highly esteemed at your
hospice? Or have we become more of a sterile quote “professional” hospice? Do we
remember our roots?
 Is your contribution of your technical experience legal, financial, HR, IT, management
areas?
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

Are you on the board for your financial resources?
Are you on the board for your connections and associations with key strategic entities
such as a hospital system or nursing home or physician practice?
There are many ways for you to be an asset to your hospice and it is important to be aware of
what the hospice is expecting from you.
Here is an important question. Do you financially contribute to the hospice? You should be
making a financial contribution to the hospice periodically and it doesn’t have to be a large
amount. Many hospice board members do this automatically and I have found that the best
board members habitually write a check to the hospice. Giving just time is not good enough.
Writing that check is an acid test that separates the truly committed from the “what’s in it for
me’ers.” You should be making a financial contribution as well as a contribution of time.
Writing personal checks separates the true believers from those less vested. It is a shame on
many boards that few members give financially. I would recommend a minimum donation be
required as a condition of serving on the board. Communicate this upfront when interviewing
board candidates. Even if your hospice has millions in the bank, you need to give. What if
everyone decided not to give? As a board member, especially for a community hospice, you
need to lead by example. How can you ask others to give financially if you don’t contribute
yourself?
No-Nos for Board Members
There are a number of “no-nos” for hospice board members. They are:




Allowing line staff to directly access the board bypassing the organizational structure
or other established communication processes
Crossing the line between oversight and operational matters
Placing unwarranted and excessive administrative burden on hospice staff
Creating a nonproductive working relationship with the CEO for invalid reasons
Does your hospice allow line staff to come directly to board members or is the chain of
command followed? This is an important point. The most dysfunctional hospices, that I’ve
witnessed, allow line-staff to come directly to board members, thereby undermining the
efforts of the CEO. If this is common practice at your hospice, the hospice is not going to be a
stable organization and needs to mature. How can a CEO move things forward, especially if
the situation is challenging…doing what really needs to be done, without upsetting a few
people? The great hospice CEOs are always making changes that advance the
hospice…and the changes are not always appreciated.
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PO Box 2327
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As a board member, you have to distance yourself from the line-staff…of course in a
courteous and graceful way and interact directly with the CEO. It is the CEO that you will be
holding responsible. Now in the course of your involvement, you may hear jabs or complaints
from staff, but you have to be fair-minded and know that you are only hearing half of the
story…now sometimes you will get insight that may be helpful, but you have to maintain your
objectivity and deal with the situation managing the expectation. Most of the time, this type of
interaction is inappropriate (the board member and staff member have probably crossed the
line into meddling). Both staff and board members need to be educated as to what is
appropriate as well as what is not appropriate.
Relationship Trouble with the CEO
From time to time, there will invariably be relationship issues between board members as well
as with the CEO’s relationship to specific board members. It will happen. Some people just
do not work well together and as a CEO, it is difficult to gauge whether or not you can work
with a person with only a few brief meetings. Obviously, there are times when the CEO must
be challenged as part of the duty of care. However, the relationship should not be allowed to
be counter-productive. I have seen excellent CEOs leave hospices because a new board
member wants to flex their muscle. On the other hand, poor performing CEOs need to be
driven from the organization, as the organization can never grow beyond the capabilities of
the leader. If a board member has trouble working with or has a low trust relationship with the
CEO or vice versa, then the board member or the CEO need to leave the organization. High
trust is paramount for healthy organizations. The decision as to who should leave should be
made after careful consideration of the “entire” organization. In most cases, it is the board
member, unless CEO’s performance disappointing. Some basic questions that should be
answered in light of the progress the hospice has made over the last few years?






Is the morale of most staff high?
What would be the opinion of top leadership of the CEO and the hospice?
Have quality measurements improved?
Has the census increased?
What impact has the CEO had on the donor community?
Is the CEO building cash reserves?
Most of the time, if a CEO is making sufficient progress in these areas and a board
member/CEO relationship is of a low-trust nature, the board member should gracefully
resign.
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PO Box 2327
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828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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All CEOs Make Mistakes
With this said, all leaders make mistakes. Some mistakes of judgment can be forgiven.
Others that put the public trust in the organization at risk cannot. A leader will learn his or her
most profound lesson through their mistakes and ultimately be a better leader.
Mission Fulfillment
And lastly, let’s talk about mission fulfillment. Census is always of great concern at a hospice.
In fact, in many ways, census is the #1 financial indicator. As we say, “high water covers a lot
of stumps.” A hospice can have many things going wrong, but if census is high, many sins
are covered…at least financially speaking.
Census tells us another important thing about our hospice. It answers the question “are we
serving everyone that needs or could use our services?” I know why I am in this business. It
is simply a matter of reducing human suffering. To not serve people that need us when we
have the ability to help is wrong. Therefore, the question again is “are we serving everyone
that needs or could benefit from our services?” The next question would be “are we serving
them well…even with an excellence uncommon in the healthcare world?” Is your hospice’s
level of service what you would want your Mom, Dad or loved one to receive?
Can we afford to make a mistake when we only have one chance to get it right? Can our
organization be financially viable in the future…and be there for those that will one day need
hospice services?
These are the questions for the Board. You are the oversight. You have the duty of care. You
hold the future of the organization. You have the ability to influence it to greatness, mediocrity
or failure. It is a great responsibility to serve on this hospices board.
I wish you well as you make your contribution and together, let’s make the hospice
experience great.
~ Andrew
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PO Box 2327
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828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Andrew Reed, CPA
Andrew is one of the most influential people in the United States regarding the business
operations of hospice. He has introduced many service innovations that have improved not
only economic performance, but patient care simultaneously. He has assisted in the creation
of some of the most successful hospice business models centered on the ideas of World
Class Hospice and Designing the Perfect Hospice. He has worked with hospices for 19
years, and has served as the CFO of many hospice programs during that time.
Andrew formed Multi-View Incorporated (MVI) in 1996 to provide assistance to hospices
specifically in the area of business operations. Andrew has personally visited hundreds of
hospices, and MVI has worked with over 700 hospices of all sizes and in all regions of the
country.
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PO Box 2327
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©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Hospice Finance 101
1.
List the 4 primary reimbursement forms (levels of care) of the Hospice Medicare
Benefit.
1) Routine Home Care
2) General Inpatient Care
3) Continuous Care
4) Respite Care
2.
Respite Care can be used a maximum of _______ days per episode. [5].
3.
Continuous Care must be at least ____________ hours and ______% must be
______________________. [8, 50%, nursing]
4.
A Continuous Care day begins at midnight and ends at ______________. [midnight].
5.
The Hospice Medicare Benefit is part of Medicare Part ________. [A]
6.
Attending Physicians continue to bill Medicare Part __________. [B]
7.
The hospice Medical Director bills Medicare part ________. This is a per-visit fee
and it is in addition to the normal level of care billing. [A]
8.
Consulting Physician Services are billing to Medicare Part ______ and are billed by
the hospice on behalf of the physician. A __________ needs to be in place for
Consulting Physician Services. The reason this is billed through the hospice is that
it is the hospice’s responsibility to _________________________________. [A,
contract, professionally manage the care]
9.
The Hospice Medicare Benefit is divided into periods. Patients are reviewed for
appropriateness and either recertified or discharged during the Utilization Review
process. The number of days in the first periods are:
Period 1) 90
Period 2) 90
Period 3) 60
Period 4) 60
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10.
When a patient is in a hospital for Inpatient care, the hospice must have a
__________ with the hospital. The ____________ is paid for the day of
discharge/death as contrasted with the way hospitals are normally paid on the day of
discharge/death. [contract, hospice]
11.
Medicare FIs (fiscal intermediaries) pay the _________ of the billed amount and the
rate set by CMS. If you bill less than the rate set by CMS, you will receive what you
billed and the FI is under ______ obligation to pay a hospice the difference. [lesser,
no]
12.
One of the biggest problems in hospice billing is late or incorrect _______ of
__________ information. [level, care]
13.
To alert a Medicare FI that a patient has elected hospice, a _______ is sent. [NOE
or 81A]
14.
To elect the Hospice Medicare Benefit, what needs to occur?
1) A physician needs to sign a certification of terminal illness (6 months or less)
2) The patient needs to sign a consent statement or election statement
15.
_______ is a prospective payment system option for hospices and allows a hospice
to receive a set amount per month based on forecasted Medicare revenue. It is used
by few hospices, but it can be useful for cash flow management. [PIP]
16.
The acronym ADR means ______________________________. [Additional Data
Request]
17.
_________________ billing is where the hospice must get paid for the previous
Medicare invoices before subsequent invoices can be paid. All invoices must be
paid in order. [Sequential]
Physician Billing
18.
A physician rounding in a hospice inpatient unit can bill for acute patients usually
_________ a day depending upon the patient’s need and the hospice’s ideals of
care. [once]
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CAP
19.
The Hospice Medicare Benefit has two CAPs, ________________ and
_______________. [Aggregate, Inpatient]
20.
The _________________ CAP limits the number of Medicare GIP days to
__________%. [Inpatient, 20%]
21.
The _________________ CAP limits the total amount that a hospice can receive
from the Medicare system within a year. It is computed by taking an amount set by
CMS and multiplying it by the number of Medicare _____________________. This
CAP period runs from _______________ to ________________ and is based on
the cash payments made by the FI. The Medicare Admission period is not the same
and runs from _________________ to _______________. [Aggregate, Admissions,
November 1st , October 31st ,September 28th, September 27th]
Cost Report
22.
The Hospice Medicare Cost Report is due ___________ months after your fiscal
year-end. Hospices are required to be on the ____________ basis of accounting. [5,
accrual]
________________________________________________________________
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PO Box 2327
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828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
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Index
Computer Expense, 26, 29, 37
Consulting Physician, 9, 12, 27, 32, 75
Continuing Education, 26, 29, 37
Continuous Care, 8, 9, 12, 23, 75
Contractual Allowance, 54
Contractual Allowances, 54
Contribution Margin, 33, 36, 38
Cost Report, 22, 77
A
Accounts Payable, 41
Accounts Receivable, 13, 31, 33, 41
Days in Accounts Receivable, 31, 33
Admission/Inquiry Percentage, 32, 33
Admissions, 13, 26, 29, 31, 32, 36, 38, 77
ADR, 76
Aggregate CAP, 12, 13, 14
Ambulance, 26, 36, 38
Attending Physician, 9, 75
Average Caseload, 62
Average Daily Census, 30
Average Length of Stay, 30, 33
ALOS, 30, 33
D
B
Bad Debt, 54
Benchmarking, 41, 58, 60, 63, 74
Benefits, 36, 38, 46, 62
Bereavement, 5, 10, 26, 29, 36
Best Practice, 4, 31, 40
Best Practices, 4, 40
Billing, 76
Board, 1, 4, 15, 27, 29, 32, 33, 39, 40, 43, 55, 56, 57, 58, 64,
65, 68, 71, 73
Board of Directors, 4, 32, 33, 43, 57, 65
Budget, 53, 57
Static Budget, 55
Building Reserves, 21
C
CAP, 12, 13, 14, 30, 45, 77
Aggregate, 12, 13, 14, 77
Inpatient, 12, 14
Caseloads, 31, 50, 56, 62
Cash, 41
Cash Flow, 41
Chaplain, 5
Chart of Accounts, 32
Clinical Leader, 60, 62
Clinical Manager, 26
CMS, 12, 22, 23, 76, 77
CNA, 26, 29, 34, 36, 38
Community Bereavement, 29, 41, 69
Community Support, 27, 47
Competition, 47
Compliance, 29, 66
Computed Caseloads, 31
Dashboard, 41, 48, 61, 63
Days in Accounts Receivable, 31, 33
Death Service Ratio, 32
Definitions, 19, 30
Depreciation, 26
Development, 29, 33
Development Return Ratio, 33
Direct Labor, 26, 27, 29, 35, 36, 38
Discipline, 31
DME, 22, 26, 29, 36, 38
E
Education, 26, 29, 37
Excel, 30
Executive Facts, 41
F
F9, 57
Facility Mix, 31, 33
Facility-Related, 26, 29, 36
Finance, 26, 29, 37, 75
FIs, 23, 76
Fiscal Intermediaries, 22, 23, 76
Forecasting, 57
Fundraising, 27
H
Health Ins, 67
Hospice Hell, 12, 13
HR, 26, 29, 37, 70
I
Idea, 56
Indirect Cost, 26, 27, 33, 35, 36, 37, 38, 50, 62
Indirect Costs, 26, 27, 33, 35, 36, 37, 38, 50, 62
Indirect Labor, 26, 29, 38
Inpatient CAP, 12, 14
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
Page 78 of 80
Board of Directors Workbook
Inpatient Unit, 9, 22, 30, 38
Inquiry/Admission Ratio, 32, 33
Insurance, 8, 27, 37, 47, 54
Investment, 33
IP Unit, 13
IT, 26, 70
P
L
Lab, 26, 36
Leadership, 1
Learning, 26
Level of Care, 14
Linen, 38
Lower Cost, 34
M
Marketing, 26, 31, 37
Measurement, 33
Medicaid, 5, 8, 27, 29, 47, 54
Medical Director, 9, 12, 26, 29, 37, 75
Medical Records, 26, 37
Medical Supplies, 10, 26, 36, 38
Medicare, 5, 8, 9, 10, 12, 13, 14, 15, 22, 23, 24, 27, 28, 29, 41,
45, 47, 48, 49, 54, 63, 75, 76, 77
Medicare Cuts, 24
Medicare Part A, 8, 9
Medicare Part B, 9
Medications, 10, 26, 29, 36, 38
Mileage, 10, 26, 36
MIS, 37
Mission, 15, 18, 19, 20, 73
Misys, 14
Model, 1, 4, 20, 27, 28, 40, 41, 43, 44, 45, 46, 48, 49, 50, 51,
52, 53, 54, 55, 56, 57, 58, 61, 62, 63
Models, 46, 50
Money, 21, 22, 47
Mother Ship, 41
MVI, 1, 4, 12, 19, 21, 27, 39, 40, 41, 44, 48, 50, 58, 60, 63, 74
Net Patient Revenue, 27, 28, 30, 31, 32, 34, 35, 36, 37, 38, 53,
54, 56
NOE, 76
Nursing Home, 27, 29, 32
Facility Mix, 31, 33
Office Supplies, 26, 29, 37
On-Call, 26, 36
Open Access, 34
Operational Costs, 36
Opportunities, 47
Q
QI, 26, 29
Quality, 44, 67
R
Ratio, 33
Registered Nurse, 8, 9, 29, 31, 50
Reimbursement, 10, 47
Rent, 10, 26, 29
Reserves, 21
Residential, 69
Respite, 8, 12, 27, 32, 75
Revenue Per Payroll Dollar, 32, 33
S
N
O
Palliative Care, 5, 11, 13, 41, 69
Pass-Throughs, 22, 29, 32, 33, 36, 54
Pastoral Counselor, 36, 38, 50, 59
Patient Mix, 31, 33
Patient Mix over 365 Days, 31, 33
Patient-Days, 14, 30
Patient-Related, 26, 27, 28, 29, 32, 35, 36, 38, 50, 62
Payroll, 32, 33
PC, 36, 38, 50, 59
Percentage, 30, 32, 33, 34, 35, 56
Percentage of Net Patient Revenue, 30, 34, 35, 56
Perspective, 56, 58
Pharmacy, 36, 38
Physician, 5, 9, 12, 27, 29, 32, 36, 38, 75, 76
Physicians, 75
PIP, 76
Postage, 26, 37
Printing, 26, 37
Product, 51
Professional, 28
Profitability, 34
Social Work, 31, 36, 38, 50
Standards, 56
SW, 31, 36, 38, 50
T
Telephone, 26, 29, 37
Therapies, 10, 26, 29, 34, 36, 38
Triage, 26, 36
Turnover, 31
U
Utilities, 26, 29
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
Page 79 of 80
Board of Directors Workbook
V
Value, 20
Values, 1, 4, 15, 17, 19, 20, 21
Visit Design, 51
Visit Durations, 62
Visits, 9, 31, 62
Volunteer, 10, 26, 36, 50
W
War, 34
World Class, 19, 21, 31, 34, 44, 45, 48, 74
________________________________________________________________
Multi-View Incorporated Systems
PO Box 2327
Hendersonville, NC 28793
828-698-5885 or multiviewinc.com
©Copyright 2010 Multi-View Incorporated Systems: 3rd Edition
Page 80 of 80