There are four primary components that a clinical manager is responsible for when managing the operations of a dialysis clinic: (i) clinical outcomes, (ii) compliance to regulatory agency / corporate policies, (iii) revenues, and (iv) expenses. This post will be focused on the revenue component.
In the current paradigm of fixed reimbursement for a bundle of services, a clinic’s primary source of revenue is derived from providing dialysis treatments. It’s a simple equation — more treatments equal more revenue. And clinic managers control this revenue stream, which comes directly from the ability to provide dialysis treatments. And that ability results from available chairs, or in other terms, the capacity to provide additional treatments.
Does your clinic have the capacity to provide additional dialysis treatments and increase revenue?
Understanding and maximizing the capacity of a given clinic is crucial, and could significantly impact the viability of your clinic or organization, and even the ability for patients to have access to care.
Capacity Constraints
Capacity is dependent on a number of variables or constraints such as staffing, physical plant, scheduling standards, and the clinic’s mentality towards accepting new patients.
Staffing
The most cited constraint on capacity is a sense of being understaffed. This may or may not actually be the case as clinics often feel they are “at capacity” and cannot accept new patients, and that they are constantly working to simply survive the day. This is most often a result of a treatment schedule that is appointment- based, and does not focus on the workflow to effectively utilize their resources.
This is not to say that staffing isn’t a legitimate constraint. But more often than not, there are increased capacity opportunities if you were able to utilize current staff more effectively. Believing your clinic is understaffed without quantifying should never be an excuse to turn away new patients.
Physical plant
Physical plant refers to the infrastructure used in operation of a facility. We tend to immediately think of the number of stations in the clinic, but this is just one component. Capacity as it relates to the physical plant is more about how effectively are you utilizing those stations?
Constraints of the physical plant must consider the window of time available to provide treatments, with the two most common variables being the regeneration need of the reverse osmosis (RO) system, and limitations to the hours of operation due to lease restrictions. If a clinic has a lease restriction saying they can only operate from 5am to 9pm, they have 16 hours to operate within. If a clinic’s RO system requires 4 hours to regenerate, they have a 20-hour window to operate within. In each case, there is a constraint. If a clinic only operates 2 shifts over approximately 11 hours, they have additional capacity.
Standards
Every clinic or organization should have a set of scheduling standards. Standards refer to the amount of time that is required to perform various tasks such as put-ons, take-offs, and turning over a station between patients from one shift to the next. It is the time that the staff member providing direct patient care is solely focused on caring for their assigned patient. These standards should be incorporated into the patient treatment schedule. Based on the many time studies we have been in involved with, the general industry-standard of 15 minutes for both put-ons and take-offs bears out. And a turnover standard of at least 45 minutes is recommended, though with the CMS changes to guidelines last year, some clinics require a bit more for turnover time. These standards are for minimally acute patients. Patients with greater dependency on direct patient care staff such as hoyer-lift and stretcher patients, and patients that experience prolonged bleeding post treatment, will certainly need more time to be determined on a case-by-case basis.
To be sure, your clinic’s standards will impact capacity. For example, a clinic that has mostly minimally acute patients with a 45-minute turnover standard will have more capacity than a clinic of the same size that primarily treats high acuity patients that require significantly more time to care for and require a 90-minute turnover standard. It is imperative that the needs of each patient are considered and not simply over-scheduling time when not necessary.
Mentality
Many clinics do not like or want to accept new patients for a number of reasons. With the need to provide access to patients needing care, more effectively utilizing the available resources, and increase revenues, the mentality and culture needs to be one of wanting to do whatever is possible to accommodate growth.
Another consideration for this section is the resistance to opening additional shifts. Maybe the rounding physicians don’t want to see 4th-shift patients, for example. This significantly restricts capacity. Adding the 4th shift can increase capacity by 25-30% in most cases. Consider that the physical plant and equipment is already available, so those additional treatments only require their variable costs of supplies and labor, and fixed costs, such as rent, and overhead are reduced on a cost per treatment basis due to greater economy of scale.
Maximizing Capacity
The benefits to a clinic or organization that maximizes capacity are many. From the patient perspective, there is increased access to care, as well as wider selection of treatment times. From a financial perspective, the fixed-cost portion of every additional treatment is reduced due to economy of scale. Variable costs such as supplies will remain constant, while labor costs could go up if contract labor or overtime is required to support the additional capacity. The additional labor cost is generally immaterial relative to the additional revenue, and we will explore this in a future post.
Maximizing capacity from existing clinics also helps mitigate or potentially eliminate the need to build additional clinics. In CON markets, or markets where certification takes years, this could be a tremendous savings.
Now that we have reviewed the basics for understanding capacity in the dialysis clinic, in my next post, I will share with you just how you can Create Capacity in your clinic.
