Profitability

[Re]Building Trust

Why healthcare companies should be re[building] trust now.

Trust is more important than many leaders realize. I’ve been thinking about it in light of the 2019 allegations of wrongdoing in healthcare report and corresponding settlements being chalked up to the cost of doing business. 

The impact of wrongdoing whether it’s excessive charges, abusive billing practices and the mistreatment of patients and their data is likely having a much bigger impact than most healthcare executives realize. 

Healthcare Consumers

Healthcare companies undermined the trust Americans have in the system at a time when we are asking for more and need more data and engagement from patients and healthcare consumers. Granted there are other factors that have contributed to the mistrust felt more broadly but healthcare companies will need to rebuild that trust in order to transition into value based care models.

Employees

Employees of these companies are likely impacted too. The wrongdoing is not accidental but rather a function of the business practices that likely don’t align with the company’s stated values

How do employees reconcile what they believe versus what they do? They can’t reconcile it. The wrongdoing is likely contributing to the anxiety felt by the employees working within those companies. The impact of the stress and anxiety will only get worse until there is better alignment in the values and the work performed.

Profits

Did you know that companies with high levels of trust outperform their competitors by as much as three [3] times? Healthcare companies have relied too heavily on having a captive consumer. When people are sick, they surrender to the process to get better and deal with the fallout after the fact. 

That’s not going to work going forward. New approaches to medicine and healthcare services require participation from all consumers – not just patients. How is your company going to convince consumers to trust your organization and the process when there is no immediate need?

Trust

What is trust? The one common theme that I have found to describe trust is that trust happens when you’re willing to accept the risk of vulnerability or in other words, the risk of being harmed in some way. The perceived risk has to be lower than the probability of being harmed.

How do you convince someone to take the risk on your organization or you? Trust is earned by repeating actions that conveys trust. 

The book Trillion Dollar Coach, written about Bill Campbell’s work with leading Silicon Valley companies and executives, identifies five [5] key elements of trust:

  1. Keep your word: The commitment and/or fulfillment of one’s promises. Be accountable for mistakes, apologize and make amends when things go wrong.
  2. Loyalty: A strong feeling of support or allegiance. Establish clear boundaries and when you’re unclear about what’s okay and not okay, ask rather than ask for forgiveness after the fact.
  3. Integrity: The quality of being honest and having strong moral principles. Have the courage to practice your values and do what is right versus what is easy, fast and fun.
  4. Ability: The possession of the means or skill to do something. Avoid overpromising and underdelivering.
  5. Discretion: The quality of behaving or speaking in such a way as to avoid causing offense or revealing private information.

Trust can’t be won with one large gesture. It has to be built over time with actions that are consistent with the key elements of trust. Just remember – trust can be undermined faster than it is earned.

Be generous

Best advice from Dare to Lead for developing trust within an organization is for everyone to extend the most generous interpretation possible to the intentions, words, and actions of others.

Even if you believe that you are trustworthy, most only trust a handful of people. Chances are your assumptions about a situation, interaction or person are wrong. Default to truth but when in doubt, look for the data and trust the facts.

Fraud + Abuse

There have been some eye popping headlines lately about the use of kickbacks to induce physicians and others to refer patients. Apparently, the FBI has just scratched the surface.

Kickbacks are career ending for healthcare professionals and cause significant issues for the company and investors involved. As someone who has experienced the organizational fallout, it’s a lesson that you don’t easily forget.

I worked for an organization under the first OIG settlement for use of kickbacks and other practices deemed abusive. What I learned is that people cross the line when they are under pressure to meet financial targets. 

Investors expect two things from leaders: growth and/or profitability. So I thought it might be helpful to frame the fraud and abuse risks that way too.

Growth:

A focus on growth increases the risk of kickbacks. To minimize the risk, you should have a process in place to:

1/ Identify all your potential referral sources. 

Potential referral sources are physicians, organizations owned by physicians or a family member and others who can influence patients.

2/ Review all the payments made to the potential referral sources to ensure they are supported by a contract. Contracts need to be reviewed for:

  • The nature of the agreement
  • The payment to ensure it reflects fair market value for the services rendered
  • The documentation requirements

3/ Review the documentation for services provided to ensure the services were actually provided in accordance with the contract.

4/ Educate those contracting with a potential referral source on the risks and requirements.

Profitability:

The shading things some people will do for their own gain is almost limitless. 

To minimize risk you need to be constantly looking at the financials, asking questions and validating the answers when something looks off.

With that said, the most vulnerable numbers are the revenue numbers.

1/ Trend and benchmark the charges

2/ Review the number of changes to the charges and the timing of the changes

3/ Review the methodology for contracted write-offs and discounts 

4/ Watch for deviations from the methodology

Potential issues:

1/ Out-of-network strategy 

2/ Over utilization

3/ Additional outlier payments 

4/ Tucking and smoothing to meet financial targets

All of these issues are problematic. The underlying reason and business practices will tell you how problematic.

The Risk is Real

For me, the most memorable cases is that of Richard Scrushy, Founder of HealthSouth and felon. Yes – felon.

Richard and his inner circle intentionally misstated HealthSouth’s revenue numbers by $2 Billion before the problem was uncovered.

The numbers alone make it memorable. However, the problem surfaced just after we launched our online training programs that focused on all the processes needed to accurately report revenue. The case validated our why.

The government is now using data and AI to catch fraudsters. It’s a good time to make sure your I’s dotted and T’s crossed and that you have a process in place to keep them dotted and crossed.