Having discussed the various performance metrics that are utilized in a previous blog, I’d like to discuss how these metrics are captured, tracked, and used within a Respiratory Care Department.
The following questions will be addressed in this blog:
- Why metrics matter?
- How to evaluate the validity of metrics for RT Productivity?
- What metric(s) should be used for RT Productivity?
Why Metrics Matter
Hospitals use various metrics to understand their performance in the domains of finance, quality, safety, and patient experience, with two main goals: 1) to understand and improve hospital performance, and 2) assess how they compare to other hospitals. With regard to productivity, it’s imperative that RT leaders select valid metrics, define, track, and trend them.
Capturing has been historically accomplished via the billing for services methodology, but we all have realized that this does not capture all of our value-added services. Typically the billing-based method may capture only 70-80% of clinical procedural time. As such, it will understate the clinical Full Time Equivalent (FTE) requirements for the RT department. As hospitals have transitioned to electronic medical records (EMRs), we are finding new opportunities to capture the procedural time via documentation of clinical services at the point of delivery.
Creating and utilizing a system based upon valid, measureable, and understandable performance metrics will form the foundation of our acceptance by key stakeholders within your organization. Additionally, while an RT department may have a solid productivity system, it’s also crucial for you to be able to compare our productivity with other hospitals similar to yours, whether within your health system or with other hospitals and health systems.
How to Evaluate the Validity of Metrics for RT Productivity
The most important decision is how you go about selecting the ‘best’ productivity metric from a long list of metrics that are used by your hospital and other departments. The list of performance metrics that I’ve seen in my career includes the following:
- Billed procedures
- Total charges
- Cost/Charge Ratio
- CPT-coded procedures
- Average Daily Census (ADC)
- Ambulatory Payment Classifications (APCs)
- Case Mix Index-adjusted discharges
- Internally derived procedure time standards
- AARC Uniform Reporting Manual (URM)
To be able to use them, you’ll need to understand each of these, understand how they may already be tracked in your hospital, and understand the validity of each. I’ll address each in order:
- Billed procedures: Each of our departments have created charges for most of our services for our hospitals to use for patient billing, or in the absence of ability to bill, for internal budgeting purposes. While there may be some value in tracking billed procedures from year to year to get a sense of activity for forecasting and budgeting within a department, this metric is not valid because it neither accounts for clinical RT time to deliver the service nor captures all of the services that RTs provide that aren’t billed. The first problem is that in counting procedures, every procedure is given a value of ‘1’. Thus, a nebulizer treatment counts the same as a ventilated patient day. An example of not capturing time would be that many RTs are part of the Rapid Response Team, but the service may not be billed by RT or may not be captured.
- Total charges: Most of us created a patient charge for each of our procedures either by determining the cost and adding a % to it as determined by our finance department or by comparing the time, device, and supply cost to other existing procedures and creating an appropriate charge. In the period in which our hospitals were reimbursed on a ‘charge minus’ or ‘cost plus’ model, this was simple and easy to do. However, there are two problems with this metric that need to be illuminated: 1) The charges weren’t aligned on the time required by the RT to accomplish the task, and 2) Charges were determined by each hospital and couldn’t be compared to other similar hospitals. As such, charge-based metrics are of no value in determining productivity.
- Cost/Charge Ratio: Each hospital creates a cost/charge ratio for those departments that generate charges, with RT being in the group. Historically, this had greater significance because it provided a measure to track these departments’ costs and assure that their charges were not only covering those costs but generating additional charges to cover non-revenue generating departments. Some feel that using this ratio may provide a means to trend each department individually year-to-year, but it should not be used as a metric to measure productivity. There are two reasons for this: 1) As new procedures are added, the ratio will change merely because new charges are added, and 2) since each ratio is a function of internal cost accounting and charge setting, it is not appropriate to compare to other hospital RT departments.
- CPT-coded procedures: The American Medical Association (AMA) created the CPT system as a means of capturing intensity of time and resource consumption.  The system is valid, updated to add new procedures, and is widely accepted as the ‘national standard’ for physician practice, billing, and productivity. However, since the system was based on physician activity and procedures, it doesn’t adequately capture the procedures and services done by RTs and only a minority of our services are captured in this system. RT leaders have reported that anywhere from 25% to 50% of their total RT clinical worked hours are captured by using CPT-codes. As such, this metric misses the majority of respiratory care procedures.
- Average Daily Census (ADC): Not mentioned in this blog, but some organizations historically used licensed beds to compare with other hospital departments. As a result, some organizations switched to ADC as a gross measure of evaluating staffing, department expense, square footage of the department etc. However, we know that RT does not provide care to every patient in the hospital, that acuity varies between hospitals, and that hospitals don’t have the same services. Thus, ADC is of no value as a productivity metric.
- Ambulatory Payment Classifications (APCs): APCs are the federal government’s method of paying for facility outpatient services for the Medicare program. As of 2000, hospital payment for outpatient services have been based on a prospective payment system that had been in place for inpatient services since the mid-1980s. Like the Inpatient Prospective Payment system, the Outpatient Prospective Payment System (OPPS) bases payment relative to the resources consumed according to each group. From a reimbursement standpoint, it is an excellent system because it recognizes that the higher the patient acuity, the greater the cost of the resources are needed, and as such, the higher reimbursement is appropriately provided. However, this system cannot be used within an RT department nor can it be used to compare two RT departments for two reasons: 1) RTs don’t treat all of the outpatients, and with a few exceptions, treat only a small percentage of outpatients, and 2) since it is based on outpatient services, which are only a small portion of typical RT department services, it is improper to base inpatient productivity on such variation.
For example, if one RT department sees 2% of their total patient volume as outpatients, one cannot merely multiply this by 50 in an attempt to create an inpatient volume.
- Case Mix Index-adjusted discharges: This metric takes discharges and adjusts them by their case mix index (i.e. “acuity”) in an attempt to account for differences in case mix and then compare to other hospitals. Case mix index is quite a useful topside metric to compare the relative acuities of the patients between hospitals, but has no value for respiratory care services because RTs don’t provide services to all of the patients, and as noted, above makes this metric of no use for internal productivity evaluation.
- Internally derived procedure time standards: For a department not using the AARC Uniform Reporting Manual (URM), using internally derived and validated procedure time standards can be a useful tool to examine productivity. Many departments convert procedural time standards, whether internally derived or the URM, to create RVUs (i.e. Relative Value Units) as a means of distributing patient assignments. Procedures are assigned RVUs based upon a predetermined time standard and then all procedure RVUs are based relative to this selected time standard. For example, if it is determined that a nasal oxygen setup takes 5 minutes, this could be assigned 1.0 RVU. As such, a small volume nebulizer treatment that takes 15 minutes would be assigned 3 RVUs. Thus, the internally derived procedural times have value both for documenting procedural time as well as for ease of assigning patient services. However, since not all departments use the same time standard for an RVU (e.g. 15 minutes, 10 minutes), RVUs without such definition should not be used to compare productivity between hospitals.
- AARC Uniform Reporting Manual (URM): This is the agreed upon ‘national standard’ for capturing patient care services provided by RTs. It assigns each service a standardized procedural time. This system has been in effect for decades and is the result of intensive and scientific validation of procedural times through an iterative process to arrive at standardized times for adult, pediatric, and neonatal respiratory care procedures and services. Much like the CPT system created and monitored by the AMA, the AARC URM is considered the ‘gold standard’ to capture procedural time accurately and is utilized both within an RT department and between RT departments to accurately measure and compare productivity. It should be noted that some procedures may be unique to an RT department, and they should then be created via the internal validation process as noted above. 
What Metric(s) Should Be Used for RT Productivity
While not an easy task, the challenge RT leaders must accept is to educate and engage executive leadership and key stakeholders to utilize the AARC URM as the only means to measure RT productivity.
Each of the non-time based metrics has significant limitations that disallow each from being used either to measure productivity within a department or to compare productivity between RT departments. The reasons that hospitals utilize these metrics is that they have been captured for many years, are useful to understand other aspects of hospital operations, and that they could be of value to measure internal productivity.
Only time-based and validated procedural time standards should be used to measure RT productivity. And the AARC URM is the ‘national standard’ that meets this criteria.
Now that you have a good idea of the available metrics and which ones will serve you best, my next piece covers:
- How will you capture them?
- How can you best use them?
Meet The Expert
Garry W. Kauffman, RRT, FAARC, MPA, FACHE
Garry W. Kauffman, RRT, FAARC, MPA, FACHE is a registered respiratory therapist with over 40 years of experience. Garry was selected for the AARC Fellow (FAARC) based upon his contributions to the profession at the national level.
Garry received his MPA from The Pennsylvania State University, and achieved the distinction of board certification in health care (FACHE) from the American College of Healthcare Executives.
Beginning his career as a bedside clinician, Garry has served in clinical, educational, and administrative roles in a variety of healthcare organizations and venues from short-term acute carehospitals, physician practice, ambulatory services, and long-term acute care hospitals. He formedKauffman Consulting, LLC and is the manager of this health care consulting company.
Garry is recognized for numerous journal publications, author/co-author of respiratory care textbook chapters, and as a frequent speaker at the state and national level. Garry has served his profession at the district, state, and national level where he has served in the AARC House of Delegates, AARC Board of Directors, and AARC President. Garry has served his profession in various volunteer roles as the AARC Chartered Affiliate Consultant; AARC Benchmarking Committee; AARC Advanced Practice RT Task Force; AARC Strategic Planning Committee, Respiratory Care author/reviewer; AARCTimes author/reviewer, AARC Uniform Reporting Manual, and ARCF Education Recognition Award Judge, among others.
Garry’s focus continues to be on communicating the value of respiratory care services delivered by Respiratory Therapists by connecting the science of respiratory care, documenting outcomes secondary to our services, and communicating our value to key stakeholders in the health care system.
Garry Kaufmann is a paid consultant of Vapotherm.
 AARC Uniform Reporting Manual https://www.aarc.org/resources/tools-software/standards-development/