Wound Care Under PPS

The Medicare prospective payment system (PPS) has had a significant impact on the delivery of wound care. Administrators and chief financial officers (CFOs) in both long-term care facilities and home health agencies continue to seek ways to control costs without compromising the quality of care delivered by their staff.

Why all the focus on this issue?

Wound care accounts for about 25 percent of the services provided to residents of long-term care facilities. At home, an average of 15 percent of patients require care due to a wound. We are talking about a large number of patients who consume huge quantities of resources. For example, use of supplies for a wound care patient can run 500 percent higher than for other patients. Total treatment costs for wounds ranges from $8,000 to more than $30,000.

Why is resource utilization so high in wound care?

Historically, we could follow physician's orders for frequent dressing changes because there was no financial incentive to reduce the use of either services or supplies. Using dressings designed to be left on a wound for several days, making less home visits necessary or shortening the


A wound care outcome is a picture of the destination of the patient that allows a health care provider to evaluate interventions, their effect on patient progress and change in status.
length of stay in a facility was not encouraged. Prior to PPS, outside medical suppliers filled dressing orders, submitted the bills and assumed liability for Medicare reimbursement. There were many different agendas and little impetus for change. It is no wonder that wound care patients consumed a significant amount of resources.

Medicare PPS regulations stipulate that wound care supplies be bundled into the payment. Initial reactions to this policy change are often short-term fixes for long-term losses. Let's examine some of these.

First, administrators, CFOs and even staff in many facilities and home care agencies mistakenly fear that the cost of wound care supplies will break the bank. They fail to see the entire picture and instead focus on the narrow concept of a product's unit cost. Instead, they should concentrate on the total treatment cost to reach timed outcomes, such as debridement or a decrease in wound size.

Unfortunately, the knee-jerk reaction in many cases has meant a return to the cheapest dressing that requires two or even three changes each day. In other cases, providers have terminated the position of a staff or consultant wound care specialist. Many in management mistakenly believe that the cost of these professionals is excessive and a luxury.

Now let's examine how facilities and home health agencies can survive and thrive under PPS by practicing smart wound care -- meaning that providers must identify and use approaches that both control costs and achieve positive healing outcomes. There are two requirements for practicing smart wound care: analyze your facility or agency-specific patient mix and standardize clinical practice.

The Patient Mix

Some basic information is required to analyze the wound care patient mix. Specific wound data may be difficult to access, but the wound care specialist or nursing supervisors can identify patients by wound type and then classify them by low or high acuity.

First, determine what percentage of resident admissions or agency visits are wound care oriented. How do you compare with the national average? Next, identify and sort the caseload by wound type: pressure ulcer, diabetic ulcer, venous stasis, infected or non-healing surgical wound or arterial ulcer. Then, breakdown each category of wounds by percentage acuity level. Are they mostly low severity? These include wounds usually only requiring a minimal number of visits to complete the plan of care; non-complex pressure ulcers, such as Stage II, clean granulating wounds and healing surgical wounds. Or are they high severity wounds? These wounds are covered with eschar or necrotic tissue; infected and draining surgical wounds; venous stasis ulcers of long duration; and non-healing diabetic ulcers.

Once your wound care population is defined, the next step is to determine costs to achieve timed outcomes for each wound type. This includes calculating the total cost from admission to discharge for the different types of wound care patients. Applicable costs for specific wound type including labor (skilled and non-skilled visits, nursing/PT hours), supplies and adjunctive treatments. First, ascertain the usual or average number of visits for each specific category. Next, identify the usual outcome at discharge for your specific wound care


Practicing smart wound care means finding ways to positively impact the healing and cost outcomes of chronic wound care patients.
population. A wound care outcome is a picture of the destination of the patient that allows a health care provider to evaluate interventions, as well as the effect on the patient's progress and change in status. The results of al l care interventions should be measured against specific achieved outcomes. For wound care these may include faster wound healing, decreased incidence of complications, fewer home care visits and lower total supply costs.

Clinical Practice Issues

You have your patient mix analyzed. Now what? Practicing smart wound care means finding ways to positively impact the healing and cost outcomes of chronic wound care patients. Critical interventions should focus on the use of resources and clinician education to standardize clinical practice.

Using specialists to ensure appropriate admissions, develop effective treatment plans and control supply costs is a smart move. Wound care experts can help facilities and agencies understand supply cost and facilitate appropriate utilization. Prior to admission, they should evaluate which wound conditions are appropriate for service. They should conduct ongoing wound assessments and identify patients whose wounds are deteriorating or not responding appropriately to the treatment plan. It is cheaper to change a plan of care than to continue with one that is ineffective. Wound care clinicians also can develop critical paths, also known as care maps, that help health care professionals implement specific interventions and anticipate expected patient responses.

Wound care is a complex specialty area that requires constant monitoring and an enormous amount of education. Hundreds of new products and treatment modalities are introduced each year. For example, the 2001 issue of the Wound Product Sourcebook from Kestrel Health Information Inc., will include about 3,000 listings. Without up-to-date clinical data and first-hand knowledge of which wound conditions are likely to respond to specific interventions, product use can easily cost more than a provider will receive under PPS.

Controlling supply costs and usage is essential to survive. But rather than eliminating treatments, equipment and supplies, careful inventory control and staff education are smarter solutions. Clinicians need access to products and therapies that yield positive outcomes. Use your wound care specialist to:

1. Identify products in stock that are rarely used

2. Evaluate new products

3. Determine appropriate use parameters

4. Recommend one or two manufacturers or suppliers with a full product line

5. Select specific product lines for the wound types identified in the patient mix analysis

6. Develop a formulary and product use chart that will guide clinicians on which dressings are suitable for specific wound characteristics.

A product formulary and the right supplier can reduce confusion about product selection and use. Use your supplier to achieve cost efficiency through inventory control, easy ordering, order controls, efficient delivery and value added services related to documentation and education.

The key to survival under PPS is to analyze your specific patient mix and standardize clinical practice. To minimize the financial impact of PPS on wound care, identify the critical resources that you need; know your true costs for providing wound care to your population; and deliver the care that will ensure your profitability.

For more information on the Wound Product Sourcebook, contact Kestrel Health Information Inc. www.woundsource.com or (888) 862-6215.

This article originally appeared in the April 2001 issue of HME Business.

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