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Interview: Strategic Opportunities to Effectively Manage Care Episodes
An Interview with Kristi Short, Senior Vice President, Navvis Healthways: How has the Accountable Care Act impacted the way care is delivered?
I really think transformational forces have been unleashed, and likely there is no turning back. Both rewards and penalties are increasing and motivating health systems and physician groups to manage patient episodes of care that extend beyond the hospital stay.
For example, Medicare’s value-based purchasing program puts a greater percentage of Medicare reimbursement at risk based on how well hospitals manage the cost of care and outcomes of their patients. Hospitals are also paying penalties for excess readmissions --2,224 hospitals across 49 states have been penalized and new conditions are being added to the equation in 2015 to continue to curb costly readmissions that occur within 30 days of discharge.
Why is there such a focus on hospital readmissions?
Because one readmission more than doubles the cost of a care episode, and studies show that about 45% of readmissions from skilled nursing facilities back to the hospital are avoidable. This is a big bill Medicare pays each year because of repeat hospitalizations, thus CMS is raising the stakes to incentivize hospitals to proactively manage patient transitions and mitigate readmissions.
How are hospitals and providers responding?
As the financial repercussions increase, health systems are responding with new priorities: improving care transitions, developing post-acute provider partnerships, and designing and adopting evidence-based care models that extend from acute settings to post- acute and home environments. A hospital’s responsibility for its patients can no longer end at discharge.
One initiative that is fueling the movement is the Medicare Bundled Payment for Care Improvement (BPCI) initiative. There are about 6,500 providers (physician groups, hospitals and post-acute providers) now participating or currently evaluating participation in 2015. The Centers for Medicare and Medicaid Services (CMS) designed the BPCI program to reward hospitals and physicians that can deliver on lowering the cost of care from hospital admission through the 90 days following (the care episode). They can choose to participate in any number of the 48 episodes (e.g., congestive heart failure, stroke, joint replacements), which represent about 85% of Medicare hospitalizations. The episode cost calculation includes the hospitalization, all physician fees and post-acute services.
The mechanics of the program are complicated but the bottom line is hospitals participating will receive additional payments from CMS if the episode cost (hospitalization plus spend through 90 days following) to Medicare comes in below a bundled price target set by CMS, or will owe Medicare extra if spend exceeds target price. Thus, significant savings can be generated and shared with physicians or partnered post- acute providers who are able to work together to reduce the cost of care. This puts the spotlight on use of evidence-based care models and the alignment of the highest quality and most efficient post-acute providers.
Why is there such a strong interest in the bundled payment program when there is also downside risk?
One reason for interest in the program is that hospitals gain access to Medicare claims information that is typically unavailable otherwise, allowing them to understand the often disjointed and very costly path of their patients once they leave the hospital. We work with our clients at Navvis Healthways to mine this data and surface opportunities to reduce cost of episodes, and partner with them to initiate programs proven to reduce care costs. . It has been interesting that when we present our findings and observations, most physicians, hospital administrators and case managers are quite surprised at the wide variation in quality and cost of post-acute care after they discharge that patient relationship. It becomes evident that management of that patient deteriorates once the patient leaves the hospital and there is so much opportunity for improved care coordination. Careful planning for how patients transition do different care settings and where they go next matter as much if not more than the care delivered during the inpatient stay, and significant cost savings can be generated for the hospital that is able to better manage the continuum.
What are hospitals doing to manage patients post discharge?
Hospitals are now beginning to focus on establishing high-quality and accountable post-acute networks of aligned skilled nursing facilities and home health agencies. This is a growing consulting area for Navvis Healthways. Four of every ten Medicare patients are now discharged to a post-acute care setting, thus this area is rich with savings opportunities through improved coordination and performance quality measurement. We help hospitals establish contractually aligned networks of providers that are willing to work closely with hospitals and report quality and performance data that matters most to the joint management of the patient. Navvis Healthways Consulting Services and the Healthways Care Transition Solution platform can play key roles in helping health systems, physician groups and post-acute providers come together to meet the challenge of breaking down silos and effectively managing patient care across venues and along an extended care continuum.
How important is episode management to the future financial success of hospitals?
I believe a health system’s effective management of the entire patient care episode is not only necessary to succeed under the evolving value-based payment initiatives, but is also an important milestone toward eventual population health management — perhaps the first mile marker in a 10K run. Managing patient recovery post discharge requires collaboration with healthcare providers and community resources outside of what the hospital owns, and development of strong strategic partners coming together seamlessly in a patient-centric care model. These competencies are all foundational to eventual population health management, thus can create the foundation from which to build. We are well positioned to launch our clients out of the starting blocks toward their goal of managing the health of the communities they serve.
