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Q: What factors should I take into account when setting fees for consulting to staff and administration at a nursing home, for example for in-service training, team meetings, and ‘behavioral rounds?’
Dr. Jerry Morris, Chair of Division 42 Hospital and Healthcare Facilities Committee responds:
There are at least three dimensions to consider: (1) Why a nursing home (or other healthcare facility) may seek consultation; (2) How consultants are conceptualized by facilities and (3) What your goals are in relation to the facility.
Consultants are valued by a healthcare organization if they contribute to reaching corporate goals in addition to providing (clinical) service and quality. That is how consultation works in any industry and across America. A successful consultant must of course be well trained and have expertise and wisdom to offer. But the key is to be able to analyze an organization's needs and to contribute to satisfying those needs.
A psychologist’s definition of ‘consultant’ may be quite different. We may generally view a consulting relationship as one of independence, with no direct responsibility for the total organizational vision or goals, and no requirement to meet the overall responsibilities of employees. This definition gets a bad rap with owners and administrators.
One exception may be a special circumstance such as a doctor who is a steady referral source. In this case, the facility may use some of the revenue generated by such a referral source's contribution to the agency's census and cash flow to support the doctor's training and leadership interests. In this scenario, the consulting rate can range from the full reasonable and customary fee to a reduced fee, related to the consultant’s contribution to the facility’s bottom line. The consultant must of course make sure there is no ‘fee splitting:’ taking the consulting fee on the basis of being a good referral source only, without delivering services.
Generally, nursing facilities have very slim margins, in the range of 2-5% nationally. Administrators and stockholders focus on the bottom line, maintaining certification, customer satisfaction and customer recruitment, and linking with people who can positively affect any of these. For example, consultation may be sought
- For certification if this is threatened
- Prior to a certifying agency’s site visit to prepare for the visit
- To address serious contingencies raised by such a visit
- For clinical consultation to address cited staffing or program deficiencies
- If a new program is being developed and staff credentialing is required to market the program.
Facility executives live from quarterly report to quarterly report and have one of the most perishable jobs in any organization. They produce or are out!
Consultants are conceptualized by programs as
- Temporary partnering relationships with
- Someone who has expertise, affiliations and resources and
- The ability to bring partnering entities or technology together, and who
- will make an immediate and positive contribution to the owner’s position.
If your goal is to develop a long term relationship with a nursing facility you may want to compress a few minutes of staffing or training each week into the facility’s schedule at no charge while billing third-party carriers when appropriate on a fee-for-clinical-service basis for services provided to residents. In this way you add no direct or fixed cost to the facility, establish yourself as a more permanent participant who can affect the quality of care for the long term, while you gain a steady stream of revenue.
Note, many states have a Medicare supplement program which pays the copay for disabled Medicare recipients. Knowing how to access this further reduces your cost to the patient and facility.
The short answer is as follows:
1. Set your fee by assessing your position and goal. If you are essential to assist in correcting a recently cited deficiency or program flaw; if you are a significant referral source; if your name enhances program development and marketing efforts; or you will bring to the organization linkages, technology, or training which will immediately and positively affect the bottom line, census and cash flow with only short-term costs for your services, then charge at or above your customary per hour fee for all services (team meetings, training, administrative consultation). Your goal will be a short term relationship, and your consulting fee is a variable cost that will be targeted for cuts by administration during low cash flow and low profitability quarters, or when they have understood and implemented your ideas.
2. If you are looking for a long-term relationship, design your participation so that you do not represent a variable cost. Rather, show the organization that you can fund yourself through external sources (third-party payers) while simultaneously affecting such things as the facility’s margin, certification, customer satisfaction and product quality, marketing, and the administrator's ever tenuous relationship with shareholders. In this way you become an asset to be cherished by a CEO rather than just another worry to face when reporting to shareholders.
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