How Postacute Care is Evolving

With shared interests in reducing readmission rates and associated Medicare payment penalties, hospitals and skilled nursing facilities are in the vanguard of an evolutionary movement.

This article first appeared in the December 2015 issue of HealthLeaders magazine.

The quest to deliver value for patients at health systems and hospitals has opened up a new frontier filled with golden opportunity: postacute care.

"The 30-day readmission penalty for hospitals and their SNF partners is a marker, not the endgame. The state of play right now is: How do we get to better longer-term overall care coordination?"

"There are huge benefits and very few downsides to the evolving partnerships between hospitals and postacute care settings," says Mary Naylor, PhD, RN, a gerontology professor at the University of Pennsylvania School of Nursing and director of the NewCourtland Center for Transitions and Health in Philadelphia. "It is evolutionary. It could be faster; but, nonetheless, we are not going back."

With shared interests in reducing readmission rates and associated Medicare payment penalties, hospitals and skilled nursing facilities are in the vanguard of this evolutionary movement, but the scale of change is much broader, Naylor says. "The 30-day readmission penalty for hospitals and their SNF partners is a marker, not the endgame. The state of play right now is: How do we get to better longer-term overall care coordination?"

Hospitals have faced Medicare payment penalties for patient readmissions since October 2012. SNFs and home health agencies began facing readmission payment penalties this past fall.

In addition to slashing readmission rates, health systems and hospitals are banking on tighter relationships with SNFs and home care agencies to create continuity across the entire care continuum and to reduce unnecessary emergency department utilization, Naylor says. "Hospitals want to pair themselves with the best postacute care facilities."

Seizing postacute care opportunities
Whether a health system has decades of experience operating wholly owned SNFs or it is just beginning to venture into the postacute care realm, hospital executives are building new relationships with skilled nursing facilities and home health agencies.

North Shore-LIJ Health System operates wholly owned SNFs on three hospital campuses and has more than two decades of experience running postacute care facilities, says Merryl Siegel, regional executive director of postacute services for the Great Neck, New York–based organization, which has a workforce of more than 54,000. "We have lengthy experience and a well-known name in the community," she says of the health system's trio of SNFs. "The physicians trust us. We have a referral base."

"One of the key goals for us is reducing the patient leakage outside our health system."

In addition to the wholly owned SNFs, North Shore-LIJ, which will officially change its name to Northwell Health beginning in 2016, also offers services for hospice, home care, and infusions. Having a postacute care division is part of North Shore-LIJ's integrated health system strategy, which is paying off financially, Siegel says.

"One of the key goals for us is reducing the patient leakage outside our health system. Our health system is really an integrated system serving the whole care continuum. Financially, we are able to keep all of that downstream revenue beyond the acute care setting. We know where every patient is being discharged to. You can really monitor your staff, your utilization, and your length of stay."

Over the past five years, North Shore-LIJ's leadership team has been expanding the organization's postacute care capabilities beyond the integrated health system, Siegel says. The primary focus of that effort has been creating partnerships with approximately 20 independent SNFs to meet demand for long-term care services. "We realized that we needed to partner with other facilities."

North Shore-LIJ does not have an ownership stake in the health system's off-campus SNF partners, but several metrics are monitored at the affiliates, including Medicare Nursing Home Compare star ratings, readmission and mortality rates, department of health surveys, and length of stay, she says.

"We are using the metrics to evaluate the affiliates. We are trying to move our patients to the best facilities. We collect data from all of our affiliates. As everything moves to capitation and bundled payments, it is really important that we have these relationships," Siegel says, noting length of stay at SNFs is already a crucial factor in bundled payment contracting. Length of stay will become increasingly important as the Centers for Medicare & Medicaid Services and commercial payers roll out new value-based payment models, she says. "There will be financial implications for healthcare systems and skilled nursing facilities."

Pittsburgh-based Allegheny Health Network, which has eight hospitals and 17,500 employees, does not own any SNFs, but has been boosting its postacute care capabilities over the past two years, says Brian Holzer, MD, MBA, senior vice president of home and community services.

"We are using the metrics to evaluate the affiliates. We are trying to move our patients to the best facilities."

Under the Healthcare@Home brand launched in April, AHN is developing "a postacute care model focused on home health," Holzer says, noting the service pillars of the model include hospice, home health, palliative care, home infusion, and home medical equipment and supply sales. Healthcare@Home also includes transitional care, a coordinated care model focused on discharge planning and postacute care follow-up with patients that Naylor has helped develop over the past 20 years.

"The aspiration two years ago was to test a provider-driven, postacute care network," Holzer says of AHN's strategy for Healthcare@Home, noting nonproprietary partnerships with SNFs are a crucial element of the health system's grand plan for postacute care. "We do not own SNF resources. We partner with a select number of skilled nursing facilities."

AHN's SNF partners have agreed to hire highly skilled nurses to boost quality at their facilities, he says.

"We request the skilled facilities to appoint nurse practitioners to round with our patients to make sure the clinical quality meets our clinical standards. The SNFs that believe in their capabilities are welcoming this step. They see this relationship as a way to sustain their volume. It's been an incredible journey already."

While acknowledging that clinical quality at SNFs has been a weak point in the healthcare industry for decades, Holzer says establishing mutually gainful partnerships between hospitals and SNFs has the potential to fundamentally transform the care provided to older patients with multiple chronic conditions. The benefits of this transformation will be not only clinically healthier patients but also financially healthier SNFs, he says.

"We hold SNFs to standards. They know if they don't meet our standards, we can go out and find someone else who will. They know this is a path to their sustainability. We are agreeing to collaborate to create a better model of care. Beating down on SNFs and putting them out of business is not the right approach. Our approach, which provides a large amount of volume, allows them to invest in themselves and get better."

Skilled nursing facility perspective
The drive to increase collaboration between hospitals and SNFs is closely linked to the healthcare industry's shift away from fee-for-service payment models, says Lisa Thomson, chief marketing and strategy officer at White Bear Lake, Minnesota–based Pathway Health Services, a professional management and consulting organization serving clients in the long-term care and postacute care industry.

"It's a tipping point now as we move to value-based payment. It's a paradigm shift for the skilled nursing facilities," she says.

The fee-for-service payment model has created siloed healthcare for acute care, postacute care, and home care, Thomson says, noting value-based reimbursement models such as bundled payments are encouraging all healthcare providers to focus on placing patients in the most clinically appropriate and cost-effective settings.

"With more coordination, the acute care staff has additional confidence to move the patient to the SNF setting, based on the collaboration, which required streamlined clinical systems and expected quality outcomes for the patient across all healthcare settings. The SNF feels good because they can transition the patient to a home care partner. They are all looking at the patient as a whole," she says.

In a key financial development, value-based payment models such as Medicare's bundled payments for joint replacements have resulted in an unprecedented level of data sharing, Thomson says, adding that many health systems and hospitals are gaining access to SNF billing data for the first time. "We are seeing hospitals that are looking at the data, looking at the outcomes, and identifying the SNFs that they want to work with, based on their organizational data."

As AHN has discovered with its SNF partners, skilled nursing facilities are being drawn financially to the steady patient volumes linked to closer relationships with health systems and hospitals. "SNFs will not have the higher volume of Medicare referrals with a shorter length of stay. It's a win-win clinically and a win-win financially for everyone," she says.

The Medicare payment penalty for readmissions is just the beginning of value-based care's financial impact on the postacute care sector, Thomson says. "Readmissions are the first common ground of collaboration between all of us in the care continuum. We all have to work together to keep our readmission numbers down. That's just the first of many quality measures coming down the road for the whole healthcare continuum."

Revolutionary change comes with a measure of pain, she cautions. "It forces us as organizations to determine what we are really good at and to find opportunities to do the best that we can for our patients. It will result in better outcomes, but it will be difficult. But when I see facilities embrace it, they are really energized."

Transitional care coordination
Medicare reimbursement for transitional care started in January 2014. With financial support from the nation's largest payer, transitional care has the potential to raise care coordination for older patients to new heights.

"Transitional care has emerged as a huge, evidence-based approach to aligning care teams with the needs and goals of patients," Naylor says. "We have an opportunity to have people's needs met in their home rather than in a more intensive setting."

The transitional care model that Naylor helped develop at UPenn has 10 essential elements, featuring highly skilled transitional care nurses who help guide patients through an entire acute episode of care, from hospital admission to home care. Other elements of UPenn's transitional care model include in-hospital assessments and evidence-based plans of care, TCNs conducting regular home visits, engagement of patients and family caregivers, and a holistic approach to patient care that not only addresses the acute care episode but also other factors impacting a patient's health such as home safety and medication management.

"Medicare pays for 30 days of clinical transitional care postdischarge from a hospital or skilled nursing facility," says Rani Khetarpal, CEO of Global Transitional Care, a Newport Beach, California–based third-party specialty group provider organization dedicated to providing comprehensive transitional care. "We know what the needs are. We know the situation at home. And we can talk about all of that with the patient and all of the members of the patient's care team. It provides for a seamless transition from the hospital or the SNF to the home."

The organization is only working with California patients this year, but it has applied to CMS for the ability to operate in all 50 states.

"As a provider, we now have the ability to make decisions on behalf of the patient. However, we prefer to collaborate with the patient's physician care team on any medical decisions," Khetarpal says. "Patients can self-refer to our care. We do not require a physician's order to provide services. Our focus is the patient. We are independent. That's the beauty of being a third-party provider."

GTC's third-party status distinguishes the organization from AHN and other health systems that are offering transitional care services, she says. "Health systems with transitional care are only managing their own patients. However, the capacity to provide transitional care to all their patients is somewhat limited due to the lack of necessary resources. But I don't want to disparage any healthcare provider that is offering transitional care. Any transitional care program is fantastic. There are so many patients who need this service. We cannot serve all of them."

Naylor says she is pleased with the rise of transitional care and the decline of silo-based approaches to healthcare service delivery, particularly for older patients.

"It is tremendously exciting," she says. "We cannot ignore that major drivers in this change are the patients and their family caregivers. They have been watching. They are saying, 'This cannot be the way we treat our most treasured citizens.' "

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