Dan:

Welcome to the show, Judith.

Judy:

Hi Dan. Nice to see you. Nice to be here.

Dan:

Yeah, no, it's great to have you on the show. I know you have a connection with Trusted Health, Dani Bowie from your time at Yale as well, and we're excited to dive in about all things nursing leadership and how we can kind of build the health system of the future. But before we get into that, we'd love to just have sort of an overview of your background and what are you up to lately.

Judy:

So I need to start out by saying I was a licensed practical nurse a long time ago, worked bedside. Moved, got my RN, and then nothing started moving along for me, but I like people to know that now I started out working those shifts and it was very, very important part of my career. I moved into management and leadership roles and did a lot of operations, did a lot of administration, and then things started happening in the '90s and the way healthcare was being paid for, changed. And I said, "Well, healthcare's a business and it's a service industry and I guess I better learn about this." So I got involved with managed care. Those were ugly words in the old days. People didn't like hearing that.

Dan:

Especially in the '90s. Yep,

Judy:

Exactly. But I wanted to learn about it, and I did learn about it. And I have to say this because a lot of we nurses don't think of this. First of all, there are six million licensed professionals delivering healthcare in this country. Two thirds of them are nurses, and I don't think people realize how important we are and how much we actually do to make the health system the system that it is.

Also on that subject, it's a four trillion a year industry. I know people don't like to hear the word industry, but industry is about people making things and people getting things done. And that certainly describes healthcare. Anyhow, it's a four trillion industry. It's the second largest in the United States, and the first largest is actually retail. So we are big and we are everywhere.

Nurses are significant leaders. And in the business of healthcare, it's important for us to understand and use the information in our daily work and how we're going to make change in how we're going to manage. So if you're a nurse leader, you need to connect with the financial results of your work, which is what I learned a whole lot about and experienced.

And what I want to talk about today, just to also say I've had a lot of experience. I ultimately ran a managed care company for home care companies and hospice. I started it and ran it for eight years, and then I moved over to dare I say, a Fortune 100 insurance company, and I ran all of their medical strategies. I learned about healthcare all around the United States in that job. It was a real privilege. I worked with a lot of nurses over those years, and again, I learned a lot about the relationship between our profession and how it's paid for, how we deliver. And nurses are so important at the bedside, but we also are extremely important to the financial side, and the business of healthcare. And I don't think nurses think that much about it. And a lot of people just sort of go, "Oh, I don't want to talk about it. I don't want to have anything to do with it." But I'm going to explain a couple of things that we have a whole lot to do about. So how's that sound? You like that?

Dan:

I like that background, and I think it's great to have this perspective because I talked to lots of staff nurses, well nurses across the continuum, but you talk to staff nurses, and they're especially newer nurses. There's just not a lot that's taught in nursing school or exposure you have as kind of a shift by shift bedside nurse to the payer side of healthcare, to the business side of healthcare. And so you sort of just go about your day doing your work and you don't see all these complexities that are sort of underlying the system. And so when there's problems like staffing or supply issues or PPE or the pandemic, you don't have that experience or that knowledge to understand the larger system impacts that are driving decision making. And so then what I see is this sort of divide that happens like, well, I just need to take care of patients. You administrators do everything else, but I think in your message or something else there. So would love to hear what some of the things that nurses should know about from the payer perspective that could help them drive their practice differently.

Judy:

Well, I don't think we nurses realize how important we are to the flow of money into our organizations. And I'm really talking about hospitals right now. That's where the majority of us work. But we are exceedingly important and have become very important in the last eight years. And I'm going to describe a couple of things that are going on.

So couple of things. First of all, nursing is not paid for directly. Not talking about advanced practice nursing, I'm talking about those of us at the bedside. And I say us, and I'm flattering all of you because like I said, I did start out at the bedside, but I haven't been at it for a while. Our pay or how we're billed in hospitals is through the room and board fee. Now, we could have a whole nother podcast on should nursing be billed separately, Dan, but-

Dan:

Yep.

Judy:

However, the money that comes into the hospital comes from Medicare and insurance companies. And starting in 2014, so it's not even 10 years ago, Medicare, which is the big guy, the largest payer in this country, said, "We're going to start paying for performance. We're going to pay for value. We're not just going to hand out money, we're going to look at the outcomes and we're going to pay according to those." And if you're doing really well, based on your own experience as a hospital and your own data, we're going to give you a bonus to your Medicare payment. If you're not doing well, and they started this about 2016, 2017. So for the first few years you got bonuses if you did well compared to your own data. You weren't being compared to the hospital down the street, you were compared to your own data.

Starting in, I think it was 2016, 2017, you didn't do well, you got a penalty and the penalty was applied to your Medicare reimbursement. So instead of let's just say getting a hundred dollars for a procedure, you would get 4% off of that or 3% or 0.75%. So it became extremely important to deliver good care. Now I'm going to describe the four areas where these bonuses and penalties or pay for performance are applied. And so you can see, and I'm going to tell you about what they are, and I'm sure a lot of people listening to this podcast probably know about this. It's been my privilege to go to some hospital units and watch the data that's being collected on the... By nursing about what's going on. And I just want to tell you that it's attached to what the money that comes in the door.

These results are based on outcomes and based on what happened with the patients while they were in the hospital. As I said, they were started in 2014. They started with bonuses and then they added penalties based on your experience. And many of these pay for performance criteria are similar to what are in the NDNQI data. However, the stuff that's collected for Medicare goes directly to your financial department and goes directly into the reimbursements that you're receiving. NDNQI does not do that. This does.

So there's four categories. The first one is never events and they're also known as sentinel events. And if you have one of these, and this has gone on since 2008, you don't get paid for it. Surgery, the wrong body part, wrong blood type, those kinds of things. If that happens, hospital does not get paid for it. Now everything I'm telling you about has to do with nursing. If you're standing in the OR and you see somebody supposed to have surgery on their right knee and they begin to work up the left knee, you need to say, "Excuse me, we're here for the right knee." And there was some research done that showed that people were afraid to speak up. So I'm just saying.

The other three categories are directly on the nursing unit. The first one is called the Hospital Readmission Reduction program. And it addresses six diagnoses. And if the patient is readmitted within 30 days, there is a penalty applied to that payment for that service. The second one is called Hospital Value-Based Purchasing Program has to do with patient safety, patient experience, efficiency and cost reduction. The third one is Hospital Acquired Condition Reduction program. They're all reduction programs, class Cs, county, surgical site infections for colon surgery, hysterectomies, MRSA, they collect data on that. And if your numbers start to go up above your base rate, you will get penalized for all of your Medicare payments going forward. Not just for those patients, but for all patients going forward for the next year.

Dan:

And in the context of where I am in California, there's only one five star Medicare program right now. Everyone else is 4.5 or below. And a lot of those companies that got those stars are also public companies. You can see the hit to their stock prices and their revenue from those star prices. So nurses are like, "Well, I'm not involved in this stuff." But you just laid out exactly how nurses make these star programs work. It's the CLABSIs, the CODIEs, the room turnover time, all this stuff that's in there, the OR outcomes. All of these things that are directly nurse sensitive indicators of quality, go directly to the bottom line of that company. And I don't think we always think about that as nurses.

Judy:

Oh, we don't think about it at all. We think about our relationship with our patients, and getting our work done, and that's of course our priority. When we show up at work in the morning, we get our list of what we're going to do and we do it and we want to give good patient care. The financial office cetera, and the payers outside of that are also looking at what's going on. So it really is a very nurse critical kind of program. Now let me tell you how things work. I need to say this right up front so that nobody gets on to worked up about it. A number of these were put on hold during the pandemic, they're getting started again, but a number of them were put on hold and I'll tell you about that. But I'm going to tell you some data. Everybody loves data, including me, on results that came out in 2020 right before the pandemic began.

So the Hospital Readmission Reduction Program, there were 3,129 hospitals and 83% of those hospitals received a financial penalty because they were not managing their readmissions well. Okay? Second one was the hospital value based purchasing program. Now this is pretty cool. 1,500 hospitals, 55% got higher Medicare payments because of their quality and their safety patient satisfaction. So that's good news. Acquired Condition Reduction Program, 800 hospitals got Medicare payment cuts. So it's kind of all over the map.

Now the first one that put out some data just came out this October was the readmission reduction program. The other two are on hold still till 2023. But 2023 Medicare starts collecting data, January or June. And so this is coming, it's coming again. And so this is good time for people to hear this. Anyhow, in the Hospital Readmission Reduction Program, the data that just came out in October said that 75% of the hospitals were penalized. Okay? So earlier it was 83%, now it's down to 75%.

So people are doing good things. I mentioned going to a hospital recently, well it was a couple of years ago, it was actually right before the pandemic and I was in the nurses station and they had the most fabulous board up measuring falls, patient outcomes. They were day to day shift to shift. It was really incredible what they were doing. And I talked to their nurse leader and I said, "I am just so impressed with what you're doing." And he said, "We got to know and we got to know every day, every shift, exactly what's happening here." So people on the front lines, were paying a lot of attention to it. So my point is to say, "Yes, you're paying attention to it, but let's look at how it really links up to where the money and money flowing in."

Now, one other thing I need to say, Medicare started this, but Medicare, as I said, is the largest payer in the United States. When the private insurance companies the Aetnas, the Anthems, the Humana's United Health Plans saw Medicare doing it, they said, "Okay, we're going to do it too." So it's really affecting all of the flow of money into the hospital and that's where your paycheck comes from and that's where you get to buy the PPE.

Dan:

So here's a question for you. So if nursing has that much of an impact on the flow of money into the organization, what is stopping us from direct billing our services? And I know that's a whole nother podcast and we don't have to go super deep into it, but I know that's what's in the back of the mind of the nurses listening. Like, "If all of this money is running through the hospital because of me, why don't I bill this stuff? When the physician sees them for 15 minutes, I spend 24 hours or the executive bonuses all this stuff that comes out of those dollars. But I'm the direct impact to whether we get reimbursed at 100% or more or 75%. I don't see any of that. I just get my hourly check."

Judy:

I love the question because it's a really important one and people have been asking it and there have been people trying to figure out how to do it. But I would say this, the biggest issue was intensity of services. Measuring, if you had a patient in one room where you were doing major dressing changes and the patient was seriously ill and then you went to the next room and you had a patient who didn't require as much care, what they were trying to say is, "Well, do we pay more care of the sick patient? And how do we do that? And balance it... And less for the care of the other patient?" And that's where people got into a rabbit hole. They just seem to not be able to get out of it. I do think it'd make an interesting podcast and I do think it would be a very interesting thing to explore.

There was an article in Nursing Leader just this past month that came out about trends in nursing and things that are going on. A lot of it had to do with technology and how do we use technology to help make the job easier? But I also said to myself, "It's going to be time to be able to really record what the amount of labor is per patient." And then if you really want to do it that way, how do you price it?

Dan:

I know it's in the back of people's mind and I've been navigating through this show as well as we need to be at the policy table to start changing that stuff, because there's ways to do it because the physicians, ER physicians do it. They bill critical care time versus regular time and there's procedures and things and it's no different than what an ICU nurse does on any given day. And so I think there are models for it, but there also is a lot of lobby against it too because you start taking... There's all the competing priorities and things. But I do think nurses need to continue to see this connection between the revenue flow and the organizations and their direct impact on care.

Judy:

One of the other things that I wanted to talk a little bit about was the nurses relationship. Our relationship with the CFO, the chief financial officer, in the financial office at the hospital. I'm always saying, "Nurse leaders, you need to go in and talk to the CFO and they need to see your face a whole lot." And a lot of people back off from that because they say, "Well what am I going to say when I go in there? I don't know about finance."

So these four payment, pay for performance models, you really got to go in two directions with them. One is you have to train your staff. They need to know what these are and your nurse managers need to know this, and your bedside nurses need to know it. Everybody needs to know how this is and how it works. At the same time, your senior nurse leaders need to get to the CFO and the financial office and start talking about it with them.

And so how do you do that? How do you talk about pay for performance when you make an appointment and you say, "I want to come in and I want to talk about pay for performance. I want to show you what our nurses are doing and I know these four programs and I know that they directly impact our bottom line. So let me show you what we're doing now." I gave a talk one time about it and I said, "You can go and look up what your hospital's ratings are and if you are getting penalized, you don't hide from the CFO, you go into the CFO and you say, 'Here's why we're getting penalized. Here's our problem. Let's take falls. We're having falls. We'd really like to purchase some video cameras to set in these rooms so we can keep an eye on the patients even if somebody isn't in there.'"

But if you're doing well, you say to the CFO, "We brought in bonus money for you on reducing readmissions. I want some of that money because I've got nurses who want to continue to get their bachelor's degree or I have nurses who want to... I want to send to conferences and I want to add some of that money to my budget so that I can use it." Now people sort of go, "Whoa, really?" I go, "Why not?" And so you have to have your results, you have to make an appointment, you have to go in. And then the other thing that you do when you're there is you say two things. You say, "First of all, I'd like to bring you me, the nurse, I'd like to bring you out to the unit and show you what we're doing. I don't want you to come with the chief medical officer. I want you to come by yourself and I want to show you what nursing does." Because when the CMO or the head of the board or the president of the... CEO of the hospital is walking along, conversation's very different than if the nurse leader is presenting what the nurses are doing.

The second thing is you need to ask for an ongoing relationship. Somebody in the finance office that you can talk to once a month, show them your data, keep on top of what's going on and then meet with the CFO, the chief financial officer, every quarter and begin to establish a working relationship with them. And you know what? They'll be really happy, they'll enjoy it. They'll learn a ton about what's actually going on. And so will you and I think it's a really important thing to be able to do. But you just got to start thinking about it that way. We have so many things on our plate starting with staffing that it's hard to move over and think about this, but it is, I think it's seemingly important for the whole organization. CFO needs to know what's going on in the front lines, not through the CMO, directly from nursing.

Dan:

Right? Agreed. Those connections to the business leaders of the system are really important. And the CFO piece, and it goes the other way, the CFO needs to be communicating the budget and the resource allocations as well, because what I find is nurse leaders, nurse managers are sort of caught in the middle. They don't have the complete story from the C-suite and they don't have the complete story from the frontline nurses. And so they're caught in this middle ground where they're given a dollar amount, they have no idea where it came from. Then they're given resources and they're trying to manage all this stuff with incomplete information instead of actually having that transparent information flow from both sides so that they can actually make more informed decisions. I feel like that's a lot of the breakdown in how they structure staffing, how they structure budgets for equipment and capital allocations is because we don't have that transparent relationship with our business colleagues.

Judy:

So these pay for performance items are the ones that are your platform to go talk about what you can go in and talk about CLABSI because when you had a CLABSI on your unit or when the last time was, and it's been 90 days, 120 days. That piece of information that's directly related to money coming into the organization. And that's what you can take into the office and talk about. That's the point of the pay for performance these items, is that we do know what's going on. We just didn't realize, most of us don't realize how it totally is connected to the money coming into the hospital. So as I said, if you have a CLABSI and you have a number of them based on your experience and they reduce your Medicare reimbursement by let's say .5%, okay, that goes for every Medicare payment, not just people who might have a central line. Every Medicare patient for one year. Really hits people. And that's the most important part of it. What's happening at the bedside is influencing the flow of money into the organization for 12 months, not just for that particular patient.

Dan:

And I think CVS Health recently only made four and a half stars and they talked about it on CNBC, on the financials, and I mean the stock price dumped a lot just with that and that doesn't even hit till next year. So it does have a real impact there.

So from a nurse perspective, I'm sitting here like, "All right, so I control the impact of revenue stream through the organization. Now maybe I can have a little bit more information to go make cases for innovative things or technology or upgrades or whatever I need to be able to do this better so that the organization continues to meet the quality metrics." What are some other pieces that the staff nurse can do after they understand the value-based payment structure and how their role fits in that?

Judy:

Well, I go back to the community hospital that I was in and I think that hospital, it was probably about 250 beds. It was a community hospital. It was not attached to an academic institution. They had one small branch, they had a couple of outpatients urgent care, but it was a small hospital. The data that they collected by shift, by patient, in the nurses station and it was posted for everybody to see, not the patients I got back there because I asked if I could go back and look at it. And that data is so important and when you're doing a shift change or you're moving over and you're handing off to look at that every day and say, "Look how we're doing." And when things are going well, you congratulate people and let people congratulate themselves. Let them tell their stories. "I had this patient, I had him in bed, I didn't think he was going to get out of bed. I went into the bathroom to get something out and he is trying to get out of bed. I got over there in time to get the guy back into bed and save him from a bad fall." Stories need to be told by the frontline people with one another and looking at their own data of their unit, every room on their unit, and what's happening there and feel good about it.

That hospital also had something I thought was pretty interesting is outside every patient's door, and I'm probably saying stuff that everyone's going, "Oh my god, of course we do this." Fall risk. But then they also had some awards or little stars by the door, "No fall in this many days." And I thought that was nice. If I were working there and I were running in and out of rooms that caught my eye as I was going in there, I'd feel pretty good about what we were doing and I'd feel part of the team that was making that stuff happen.

Dan:

Yeah, agreed. It provides ownership and we've seen models of this work in other places. When I was at my last organization, we set up this new OR model where we put some of the metrics for the OR directly in front of the staff and said, "Hey look, if you meet these metrics that we've agreed upon with you, you'll get a small bonus as well, a financial bonus in your checks." And they drove that organization to be better. They got on time starts up, they got room turnover times down, they got retain foreign objects at zero and maintain zero for a long time. There's a couple other metrics in there and every day they were driving towards those metrics because there was some sort of piece, there's a little bit of incentive in there, but also just the sort of pride of having a high functioning team.

And I think when some of these metrics come through, if there's a way to somewhat incentivize the staff and whether that's intrinsic or extrinsic around those, you can see that leadership merge. You can see teams really doubling down and finding ways to solve the problems. And I think where organizations get into trouble is where they don't share those type of things. They just say, "Show up and make your shift." And that's like success for the day and people aren't engaged and so they push problems up. They're like, "Well, the management will just figure it out." I think that's a big problem we have in healthcare at the moment is people are pushing problems up. They're not engaging down to get the people who are experiencing to solve it. And then we have sort of this mismatch.

Judy:

Well, that's why I started out by saying, I started out as a licensed practical nurse, an LPN working bedside and pediatric unit. And when somebody told me I was doing a good job, man, I felt good. I really did. Kept going. And you're right, we tend to pass these things up, which is why the nurse leaders are critical to this because their communication needs to go in both directions over to their staff, making sure that everybody on the frontline sees their importance and sees the results of their work and their effort. And then moving over to the other side and speaking with the financial people on a regular basis. Not waiting until you're invited by the CEO to come and give a report, a regular monthly meeting. You don't have to meet with the CFO, ask to meet with somebody in their office, meet with them every month and establish a collegial working relationship just like you have with your frontline staff.

Dan:

Yeah, there's two new competencies for nursing. One is innovation, so we should understand change leadership because that is now the constant forever. And I think the other piece is that business side, we have to get more articulate in the business side of healthcare in order to get the things that we want and to build the future that we want. So Judy, I've heard that you are working on a book potentially, and I would love for you to give us a little preview about that.

Judy:

Potentially is a [inaudible 00:27:53] word.

Dan:

You're like, I'm 15 chapters in and it's done.

Judy:

Yeah, I'm finishing up the second draft and I'll tell you what I'm writing about. I'm writing about how the system works. Everybody wants to change it. And I concur and so I say it needs to be changed. I don't write about what needs to be changed because everybody has their good ideas and they're certainly a lot better than mine. What I say is, and what I write, this is how the system works and you need to know how all the moving parts come together. So you have obviously the frontline providers and the providers. You'll also have the payers. They're extremely important. Policy makers are in everything. I also write about the health industrial complex and then of course patients and consumers.

But I use an example, and I think you like this. I say you have a hundred square foot examining room and you have in there a provider, maybe two providers and a patient and perhaps a patient advocate. You think there are only four people in that room? Hovering over it is a US Congress, your state legislature, the Fortune 100 insurance company that's paying for it, big pharma, they're all in that room because they all have a stake in what's going on in that room.

So I explain how those pieces all work and how they all are interfaced and I make it readable. It's not an academic tone, it's a practical, this is how it works and this is how you can work with other people when you want to make change. Here's their role and here's how you can work with them. Because you will sit down at the table with somebody who has no idea, has never been at the bedside, maybe in the bed, but never been at the bedside. They're going to try and pay for the program that you're doing and you want them to pay for it, but you have to be able to work with them and you have to respect what they're doing and they're respecting what you're doing.

So the point of the book, I've really had a good time writing it. I'm anxious to get it out. I think people will enjoy it. And as I said, it's not an academic tone. I tell stories in it about things that I saw in my career. I ran a great outpatient pre-term birth prevention program for three years. We had all these grants. It was fabulous. We were making all kinds of changes. Our data was good. And guess what? The grants ran out and we had to go to Medicaid and get them to pay for it. Well, where did I learn a lot about the world of payers from that? Because we had to convert these grants. I've seen grant programs that are fabulous. They run out of their money and they go away. So this is, how did you keep things sustainable and moving forward?

Dan:

Yeah, I love it. I think that makes policy much more relatable, as well. I mean, you can go into the structure and the committees and the flow of different ways from local, all the way through national. And for me, that makes my eyes glaze over. But when you tell me a story about-

Judy:

[inaudible 00:30:57] to stay awake.

Dan:

And that's what a lot of the policy textbooks are like, but I think when you're an innovator, you don't need to understand all of the nuances of those things. You need to understand the stories and use those and the influence of people and the change management and the stakeholder engagement, those type of things. And you can do a lot of that through stories. So that'll be fun to grab that and read and sort of understand the system from a different lens, which more and more nurses are realizing that they have to because it's the only way we're going to move forward.

Judy:

Yeah.

Dan:

Well, Judy, we're coming up to time here and one thing we like to do at the end of the show is to hand off a piece of information to our listeners. That nugget that you want them to go home with. So what would you like to hand off to our listeners?

Judy:

There's a couple of things that I want nurses and nurse leaders to realize from this is, first of all, you are making a difference across the entire organization, not just within the side where we're taking care of our patients, but throughout the entire organization. And as leaders, you need to connect with your financial results. You need to understand how you're doing, what you're doing, and are you making money for the organization? You are. Asked to share in it. If you're not making money for the organization because you are having issues, you also need to work with the financial people so that you can get the resources that you need and make intelligent commitments to getting the bonuses and moving forward. So it's about telling your staff, getting them educated, obviously educating yourself, and then working with other groups within the organization.

Dan:

Yeah, I think all great points, and this whole show is about innovation and you can't innovate if you don't make the business case. And that's not always increasing profits, but it can be decreasing loss, reducing risk, increasing overall payment or system performance. All of those are pieces that can make that business case. And so we have to do that. And I think just throwing the problem up and hoping management takes care of it or even having that divide between frontline and management is sort of indicated that you might not be in the highest performing organization to start building those relationships like Judy talked about today.

Judy, thank you so much for being on the show. This was fascinating. If people want to learn more about your book and your work, where can they find you?

Judy:

I'm on LinkedIn. Best place to find me and you can see the correct spelling of my name, which is K-U-N-I-S-C-H, and get in touch with me through LinkedIn. That's the best way to do it.

Dan:

You got it. That's where I spend most of my time. And so we'll get this episode out on LinkedIn, connect with Judy around all things policy and innovation, and just really appreciate you being on the show.

Judy:

Thanks a lot, Dan. Thanks everybody. Thanks for listening. Go for it.

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