October 21, 2013
“True knowledge is knowing you know nothing.”
It is impossible to know everything. On many subjects I feel less than adequately prepared to converse beyond the most rudimentary basics. My wife is an amateur astronomer who can only roll her eyes at some of my, albeit intentionally silly, explanations of constellations, planetary orbits, and why we are most definitely on the verge of achieving “warp drive.” But, I was a social science student… avoided chemistry, biology, physics… never mind rocket science… like the plague. Thus, there is no real expectation that I be knowledgeable in this regard. However, do you ever find yourself in a meeting at your CHC where you feel there is an expectation that you know something that in reality, you just don’t? I know for me, when I am not able to admit a lack of understanding it stems from fear… fear that someone will think I am a dolt or not qualified to be doing whatever it is I was hired to do!
It is fairly common that our team at PMG works with CHC boards of directors who struggle to grasp the complexities of cash flow, days of AR, and other Key Performance Indicators (KPI) related to CHC coding, billing, and reimbursement. Most of these volunteers are not health care revenue cycle professionals, and many are in completely unrelated fields. So, there is “expectation” of immediate understanding how KPI are calculated or what range of data would be perceived by our industry to be “best practice.” However, sadly, we find “C” level executives (including the CFO) making assertions regarding financial positions or outcomes without any basis in fact. They lack either the ability or willingness to objectively and pragmatically assess information.
Some years back we had a meeting with a CEO, CFO, and board treasurer in the Mid-Atlantic area. This place was, like many CHCs who hire us, struggling to make ends meet. We had dramatically increased their payment per visit… we at PMG call this the “encounter rate” per visit. We use this KPI (determined by dividing total payments by total visits) to evaluate PMG’s impact as it is more objective than PMG asserting that “revenue is up” or “payments have increased” because the term “revenue” can mean charges or payments and an increase in payments could be a result of an increase in patient volume and/or elevation of overall pricing of services rendered.
This CHC with whom we met had been aggressively pushing us to generate an average of $100K in monthly payments despite average monthly charges barely exceeding $85K. When we finally met face-to-face and asked from where this $100K figure was derived, the answer given was “we deserve that much.” I thought the CEO and treasurer would pass out on the spot. The CFO was gone within 60 days. He could not admit/understand that he knew nothing as it related to his projections (on which his budget was, by the way, based)… or at least that his “feelings” about his CHC’s cash flow had no basis in fact/data.
At another CHC client, a CFO contacted one of our Executive Directors and started the conversation by saying… “this discussion needs to be only between me and you.” In short, he said he had been intentionally quiet on the monthly client calls to review KPI and revenue cycle performance… for almost twelve months… because he had no idea what the numbers meant or how they were calculated. This guy had been the CFO for some time before PMG was hired (and, by the way, PMG had increased their payments by nearly 20% despite a decrease in overall patient visit volume) and he had no idea how to evaluate revenue cycle performance. BUT, he had the willingness to admit this deficit. After working discreetly with PMG leadership he is well on his way to becoming more knowledgeable and empowered.
Even today PMG has, and perhaps will always have, clients with CFOs and/or CEOs who don’t understand, dare I say refuse to learn, the basics of CHC coding, billing, and reimbursement. They mislead other “C” level leaders and misinform board members regarding “billing performance” without a firm grasp of mission critical KPI. Like me with astronomy, they don’t need to become absolute experts to have an intelligent conversation. However, living in judgment regarding perceived, but not actual, under-performance is illogical and does not demonstrate ”true knowledge” as our pal Socrates described it.
Whether you are a CEO, CFO, Billing Manager or Board Member… your CHC deserves your willingness to be vulnerable… to admit that you might not understand something. Only after the wall of absolute assuredness is torn down can the opportunity for clarity and understanding build a more firm foundation. My Dad used to quote to me and my brothers what I now realize was a Buddhist proverb: “When the student is ready, the teacher will appear.“ Be a ready student and allow a teacher to appear. Afford the teacher the ability to help move you and your CHC from knowing nothing to becoming truly knowledgeable and more fiscally solvent.