WHITE PAPER Unlocking the Value of Advanced Practice Providers

WHITE PAPER Unlocking the Value of Advanced Practice Providers Authors: Jodi Capistrant, Melissa McCain, Mark Werner, Cynthia Bailey

Unlocking the Value of Many organizations continue to underutilize and undermanage their APPs. Advanced Practice Providers Advanced Practice Providers (APPs) should be a net boon to the health system expanding capacity, improving access, enhancing patient experience and generating net income. Trained and credentialed to deliver clinical care, appropriately leveraged APPs should cover their costs with just 2-3 days per week of clinical activity and go on to generate incremental income for the system, providing a robust ROI. 1 Yet many organizations continue to underutilize and undermanage their APPs, positioning them as broadly capable assistants or support resources while viewing them as a cost center or expense. This is a costly mistake, particularly for organizations who have invested heavily in APP recruitment and hiring. To realize the full value of their investment, health systems must position their APPs as professional providers capable and accountable for generating patient visits, volume and associated net income, returning significant financial value to the health system. Page 2

Why APPs are Typically (Under-) Utilized and Losing You Money Many health systems have made huge investments in recruiting, hiring and training APPs in a mid-size health system, it is not uncommon to see investments of as much as $20-50 million, with hundreds of APP full-time equivalents (FTEs) spread across nearly all care settings (critical and acute care, inpatient, procedural, ED and clinic). Yet, this sizeable clinical enterprise is rarely managed as a material business unit with the leadership and resources warranted. Management responsibilities and accountabilities are often diffused across the organization, with minimal measurement or visibility into performance or return on investment. A program of this magnitude and potential value requires professional leadership and management with the skills, competencies and authority to match. As members of the care team, APPs are too often primarily dedicated to the responsibilities of a registered nurse or other clinical or clerical support staff members. Other care team members, and often physicians in particular, lack experience working optimally with APPs, i.e., working and collaborating with them as revenue-generating provider-level colleagues. While APPs working in a support role may contribute to improved operational and/or clinical metrics such as physician productivity, targeted LOS and readmission rate reductions, these improvements could likely be achieved through sound processes and less expensive resources. Without asking detailed questions and looking at APP-specific data, it can be challenging to discern the underutilization of APPs. It is not enough to ask what the role of the APP is in the organization. Many initial answers speak to them as patient-facing, clinical and essential members of the care team all very true. More telling are the answers and the data that address how much time APPs have allocated to clinical practice as the principal service provider, how clinical support is allocated to APPs in comparison with physicians, the adequacy of physical and other resources in support of APP practice (e.g., exam rooms), and quantifiable APP-attributed patient volumes and direct revenue. When APPs spend more of their time and effort completing administrative tasks that could be accomplished by non-provider staff, economic value is lost. Likewise, potential patient revenue is limited by the inefficiencies of a low leverage care model (i.e., inadequate clinical and non-clinical support resources) and inefficient space allocation (e.g., one exam room per APP). Access Quality Service Financial Page 3

A Real Opportunity for Health Systems Health systems can see dramatic gains in incremental income when they begin to fully leverage their APPs. For each FTE APP working in the ambulatory clinic setting, we have seen net income opportunity of between $150k - $400k depending on the specialty and rates of patient throughput. 1 Given average salary ranges, an APP should be able to cover his/her salary with 2-3 days per week of clinical activity. 2 Furthermore, an APP s ability to see patients creates an opportunity for their physician colleagues, particularly those in proceduralbased specialties, to realize additional incremental revenue equivalent to hundreds of thousands of dollars through increased new patient visits and even more from the associated procedures and diagnostic studies. Optimizing APP Value Collaborator Assistant APPs viewed as clinical and administrative support Function under a shared patient schedule with physician Work tasks are delegated by the physician Majority of decisions require physician consultation and approval Extender APPs viewed as mid-level providers Mostly function under a shared patient schedule with physician; limited independent clinics Narrow set of criteria define patient populations who can be independently seen and cared for by APPs Highly routinized APP care that requires physician approval for most or all care plans or treatment outside of set clinical protocols APPs viewed as professional providers and revenue generating colleagues of physicians Typically have an independent patient schedule Utilize clinical protocols while appropriately tailoring care and treatment within the bounds of individual expertise Cross-referral activity with physician colleagues based on patient need Resourced and incentivized to maximize high value, excellent care When APPs are truly integrated into day-to-day patient care delivery with the ability to function independently yet collaboratively, they become visit and revenue generators, while extending the reach of their physician colleagues. They directly contribute to an organization s ability to achieve key strategic goals including increased capacity for both ambulatory and acute care, improved access to care, higher visit volumes and revenue, increased new patient visits, reduced costs, and better patient and provider experience. Positioning APPs as professional providers with appropriate resources and support, and with expectations commensurate with other provider colleagues - measurable productivity, quality, patient experience is the only way to realize the full potential of the physician and APP provider complement. Example Initiatives to More Fully Leverage APP Providers: Increased use of independent clinic schedules for APPs, rather than sole reliance on shared scheduling with physicians Enhancements to primary care panel sizes through dedicated APP collaboration Utilization of APPs to care for and actively manage significantly-sized or highly specialized inpatient populations, e.g., hospital medicine or transplant service Physician education and mentoring to ensure a shared understanding of leading practices that promote collaborative care amongst the full provider complement Page 4

Unlocking APP Value through Intentional, Active Management When organizations commit to a comprehensive improvement effort, we have found a $100K improvement per FTE APP to be realistic and reasonably attainable. Realizing this potential value requires active management by leaders who are competent and experienced successfully running a business unit of this size and complexity. Organizations need to identify and address the operational and transformational elements that will support optimal clinical and financial performance. The framework below can help leadership assess the current state of APP management, organization and structure and identify areas needing improvement. Operating Standards Orientation and Professional Development Leadership APP Program Management OPERATIONAL Culture of Teamwork & Collaboration TRANSFORMATIONAL Organizational Commitment Enabling Resources Economic Alignment Operational Elements Operating Standards, such as minimum patient volume and/or throughput requirements - including patient contact hours - should be clearly defined, well-understood and regularly reviewed so that expectations and accountabilities are recognized throughout the organization. Adhering to new operating standards may require redesign and implementation of new practice models or tools, such as scheduling templates and IP coverage models. APP Program Management should include a set of parameters for basic programmatic components, including APPs professional development, clinical protocols and guidelines, and development of collaborative practice agreements, as well as confirm expectations for the working relationships with other functional areas (e.g., credentialing, human resources, finance). Economic Alignment around organizational goals is an essential management tool. Thoughtful consideration of and coordination between budget placement, funds flow and compensation are essential to a successful program. Whether budgeted directly to departments utilizing APPs or addressed through a funds flow mechanism, transparency of the economics should support a more rational deployment of APPs. APP compensation should be appropriately market competitive and commensurate with their expected role as professional providers. Incentive plans for APPs that are tied to meeting performance metrics and where appropriate link to similar incentives for their collaborating physicians, for example, can prove to be powerful management tools. Page 5

Operational Elements (cont.) Enabling Resources, such as clinical support staff, clerical staff and exam rooms are critical for APPs to successfully fulfill their redefined roles and responsibilities. APPs must be set up with supporting resources similar to those for physician colleagues practicing in the same area, a notable change from how many are supported in today s environment. Transformational Elements A Culture of Teamwork and Collaboration is critical to supporting APPs to achieve their full potential. APPs must be viewed by physicians as co-professional provider colleagues. Leadership has an important role to play in facilitating and enhancing relationships and communication among APPs and physicians that engender trust, collaboration and mutual respect. Orientation and Professional Development for APPs and all providers is important to ensure system-wide understanding of the new APP roles and responsibilities. For APPs, it is important to include standardized training templates and competency-based development plans. It is equally important to educate physicians regarding optimal APP integration, including roles and capabilities, ways to best collaborate, APP training, team integration, and performance and evaluation. Leadership must actively engage physicians and other providers across the physician group, department and service line to own and execute on the organization s agreed upon vision for the APP program. An APP program governing body with confirmed membership, reporting relationships, charge and objectives should be fully empowered to enable the optimal role of the APPs. Organizational Commitment to new expectations regarding the role of the APPs must be visible and strongly communicated to reinforce change. This commitment is likely to be tested in several ways across the organization; steadfast belief in the strategic importance of the work must be consistently demonstrated. Getting Started: Optimizing APPs in Your Organization To assess current APP utilization and value realization in your organization, leadership s first question should be, Are our APPs net income generators for the health system? And, if not, why not? If APPs are not being fully leveraged as professional providers, the next step is to assess how they are currently being deployed across inpatient and outpatient areas and how they are perceived by physicians, administrators, patients and even themselves. Signs that APPs are regarded as clinical support staff, mid-level providers, or hourly staff (rather than provider professionals), or variation in role expectations and resources supporting standard practices (e.g., clinical protocols, onboarding, continuing education), are telltale indicators of cultural and operational challenges. Building the case for a higher performing APP program requires defining a shared future-state vision and agreement on the magnitude of operational and transformational change required to achieve that vision. The journey will require steadfast leadership commitment and organizational resolve but the potential benefit to the patient, provider and the health system is both significant and achievable, typically to the tune of millions of dollars in bottom line improvement. Page 6

Sources 1 Based on Chartis Experience 2 May 2016, Bureau of Labor Statistics, Median Wage Page 7

Jodi Capistrant Principal 612.963.3997 jcapistrant@chartis.com Jodi Capistrant is a Principal at The Chartis Group and a member of the firm s Performance practice. Ms. Capistrant has nearly 15 years of healthcare experience in advisory services and health system leadership. Her work is concentrated in the creation of leading care delivery models to achieve superior outcomes, experience and efficiency. She leads engagements in organizational alignment and operational and clinical innovation including patient access and throughput management, strategic partnership design, operational integration, primary care re-design, EHR value realization, and capital asset planning, preparation, and activation. Melissa McCain Director Clinical Management Patient Engagement and Access 207.653.6859 mmccain@chartis.com Melissa McCain is a Director with The Chartis Group, leading its Clinical Management, and Patient Engagement and Access practices. For more than 20 years, Ms. McCain has advised leading national and regional health systems and academic medical centers. She has spent the last several years advising executive leadership on the development and successful execution of operational strategy to support organizational economic and mission sustainability. Ms. McCain directs consulting engagements in the areas of clinical and operational performance improvement, value-based operational planning and organizational alignment. Ms. McCain is also a national speaker on advanced primary care models a and has written numerous pieces on realizing healthcare system benefits. Mark Werner, MD Director Clinical Consulting Physicians and Chartis Physician Leadership Institute 540.520.4161 mwerner@chartis.com Mark J. Werner, MD, CPE, FAAPL is a Director with The Chartis Group leading Clinical Consulting, the Chartis Physician Leadership Institute and our work with the physician segment. In this role, Dr. Werner leads clinical consulting efforts across the firm focusing on: enterprise physician alignment and leadership, medical group performance, adoption and change management, performance innovation, population health, provider-payor relationships and the translation of strategy into clinical operations. Cynthia Bailey Manager Chartis Physician Leadership Institute 908.723.0712 cbailey@chartis.com Cynthia Bailey manages the Chartis Physician Leadership Institute and is a member of the firm s Performance practice. Ms. Bailey has 15 years of healthcare experience including strategy and operations consulting, sales and business development, and public health policy and communications. Page 8

About The Chartis Group The Chartis Group (Chartis) provides comprehensive advisory services and analytics to the healthcare industry. With an unparalleled depth of expertise in strategic planning, performance excellence, informatics and technology, and health analytics, Chartis helps leading academic medical centers, integrated delivery networks, children s hospitals and healthcare service organizations achieve transformative results. Chartis has offices in Atlanta, Boston, Chicago, New York, Minneapolis and San Francisco. For more information, visit www.chartis.com. Atlanta Boston Chicago Minneapolis New York San Francisco 2018 The Chartis Group, LLC. All rights reserved. This content draws on the research and experience of Chartis consultants and other sources. It is for general information purposes only and should not be used as a substitute for consultation with professional advisors.