A single site rehabilitation hospital was concerned about the efficiency of their operations, specifically, their service and staffing levels in their outpatient rehab locations. They were also interested in implementing a performance-based compensation model and a viability assessment of their Medicaid outpatient line of business.
To assess the operations, Baker Tilly obtained staffing information and volume data by site and service type. We analyzed the data to assess whether overall staffing levels were appropriate and also to determine if individual employees were at full capacity. We also reviewed compensation by staff level and individually against benchmarks. Based on the data and our knowledge of clinical compensation programs, we offered several options and suggestions for implementing a performance-based component as part of their employees overall compensation package. For the Medicaid line of business assessment, volumes, reimbursement rates and expenses for the Medicaid were reviewed to determine the financial viability of that line of business. Other market factors were also taken into account to support the recommendation as to whether the client should continue offering services to Medicaid patients.
Baker Tilly identified wide variances in productivity and compensation among the staff. Specifically, productivity was 59 percent compared to an expectation of 80+ percent for physical therapists. Assuming the demand is present, increasing productivity could result in an additional $1M in revenue for the hospital. Salaries varied widely among staff with little relation to years of experience, clinical expertise and role. As such, we suggested the hospital consider this during future compensation reviews and attempt to make salaries more in line. We also suggested two care model options to help increase efficiency and staff utilization. Baker Tilly also provided two suggestions for performance-based compensation models with multi-year implementation plans to manage the impact of the program. It was also recommended that the client continue to provide outpatient services to Medicaid patients due to the linkage to the inpatient business and the potential increase in volume that could result from a shift from fee-for-service Medicaid to managed Medicaid in their state.
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