Strategies for Managing the Post-Acute Environment

Managing the entire continuum of care may be beyond your organization's current capabilities, but that doesn't mean you can't try risk-based reimbursement through Medicare's bundled payment program.

Hospitals and health systems at the vanguard of managing a patient's entire spectrum of healthcare needs are few. Years of fee-for-service reimbursement combined with a desire to focus on their core competency has left many hospitals and health systems without owned components for managing the post-discharge experience for patients.

But a model that focuses exclusively on inpatient or acute care makes less and less sense as healthcare reimbursement makes the slow transition from fee-for-service to so-called value-based purchasing of healthcare services.

To a large degree, hospitals and health systems can still choose whether to participate in such value-based contracts—in other words, they're not being forced to change—yet. But even those that choose not to participate in such experiments generally acknowledge that it won't always be that way.

Eventually, they will have to learn to be accountable for outcomes.

Even those few organizations that do have experience in managing the post-acute side of care for patients discharged from their acute care settings are tilling new ground. Increasingly, there's money attached to managing a group of patients' healthcare needs such that the costs of managing that entire population will fall.

Hospital case managers have had some experience in arranging post-acute care for their patients, but those care settings have traditionally been detached from a continuum of care, and the hospital was not accountable for whether that care was delivered appropriately, safely or cost-effectively. In a majority of geographical areas, that remains so.

But it is changing.

Taking risk for the health of populations is the goal for many healthcare organizations—eventually. But ramping up the ability to take risk on populations is fraught with potential minefields. What if there was a way to sort of dip your toe into that world without betting the health of the entire organization on the outcome?

There is. Partnerships can provide a relatively low-risk way to begin dealing with risk. Medicare's Bundled Payments for Care Improvement (BPCI) initiative provides just such an opportunity.

Rich Roth, vice president of strategic innovation with Dignity Health, which has more than 40 hospitals and care centers in California, Arizona and Nevada, has taken the approach of partnering with a so-called "convener," a company that helps with tracking, coordination of care and improving metrics for organizations at the post-acute care level.

"It's really part of a broad move toward population health," says Roth. "There's a phenomenal opportunity with novel organizations that have deep expertise in one area, like patient engagement or coding, to marry those organizations with the deep healthcare expertise Dignity has and trying to figure out this new world together."

Roth says that within Dignity, there are certain geographic areas within the system where it makes sense to move toward a population health posture. In those areas, Dignity has signed a partnership with naviHealth, a convener.

NaviHealth works with Dignity's case management teams to work on readmission goals with the help of the company's depth of tech support and case management. It also uses that information and skill to help arrange and follow up with patients and their physicians on their post-acute rehab responsibilities.

"The opportunity we have in terms of care coordination allows physicians and hospitals to work together better than ever in history," Roth says. "These models really support aligning physicians on joint goals of quality, safety, and reducing the cost of care from a structural and economic standpoint. We're early but based on what we're seeing, we're rapidly expanding this to multiple other sites within the Dignity system."

Dignity is working in the Model 2 program, which includes the inpatient stay plus post-acute care bundle. The patient's care episode ends in 30, 60 or 90 days. Dignity had to meet CMS benchmarks on quality and on its clinically integrated physician network, but once accepted, enthusiastically went about working on aligning physicians, the hospital and post-acute care.

"We need to hit base levels of quality improvement," says Roth. "Above those, there's opportunity to share savings based on better management of the patients and overall reduced cost of care."

Healthcare organizations may apply to participate in the program's four available models. But that's just the beginning. The program can be a way to experience risk, but if it's not run well, with proper coordination of care with post-acute entities, for example, the hospital or health system could record lower revenues than by staying on Medicare Inpatient Fee for Service, which is their right.

I won't waste space here detailing the four models, but for those who aren't already intimately familiar with them, they can be found here.

More than 500 hospitals, health systems and other providers have enrolled in the program. NaviHealth's Clay Richards, the company's president and CEO, equates CMS's bundled care initiatives with "dipping your toe into risk-based population health management."

The company serves not only as a repository for technology, analytics, and highly skilled clinicians adept at navigating the continuum of care efficiently, but importantly, as a risk partner, says Richards. The focus on coordination of care can serve two purposes outside of the financial, he adds.

"This is a competitive advantage from the hospital because their service delivery through 90 days will be very differentiated from their competitor down the street," Richards says.

Also, a big selling point for the partnership is the fact that it can serve as a way to drive higher levels of integration with physicians, particularly independents, who bring volume to the hospital.

"We're looking for someone who really wants to collaborate around this, and we will go in and help set up some of those integrative arrangements with physicians," says Richards.

Historically, a bigger focus of naviHealth's business has been its work managing the care of almost 1.8 million members of Medicare Advantage plans. He says the move toward post-acute care coordination in the bundled payments initiatives involves much of the same type of work.

"Rarely do we talk to a CEO who says this isn't the way they want to go, but it's a matter of timing," says Richards. "The nice thing about this is it allows them to move closer [to taking risk] without requiring that they radically change their operating model."

Alan Pope, MD, vice president of medical affairs and chief medical officer for Lourdes Health System, a two-hospital system based in Camden and Willingboro, N.J., sees the BPCI project his system is doing with naviHealth and CMS as both an opportunity to improve the quality of care across the post-acute continuum, and as a way to experience "where things are headed" in terms of more expansive risk-based contracting that the hospital expects to have to deal with both from government payers and the commercial market.

That said, currently the system hasn't yet seen much interest in risk-based contracting from the commercial side.

Pope and the leadership team at the health system felt comfortable enrolling in some of the BPCI programs thanks to success it had with a recently completed three-year gainsharing effort it undertook through the New Jersey Hospital Association with CMS.

That program offered an opportunity on the acute side, but not the post-acute side to reward physicians if care was more efficient and better quality, he says, very similar to Model 1 of the BPCI program. That project got physicians' attention on both quality and financial incentives.

"It made the physicians aware that there's another world out there other than fee-for-service," says Pope. "It was a successful project for us in that we saw quality gains, decreased cost and length of stay in certain areas."

For Lourdes, the BPCI program represents a graduated, bite-sized approach to taking risk.

"Gainsharing was one step, this bundled care project is another step, and shared savings with commercial payers will be another step," Pope says. "Once we have a better feel for how we can manage, and we have a better handle on cost across the continuum in the post-acute setting, we would like to take on some risk fairly quickly—within next few years."

Pope says such projects have a definite appeal because of the potential financial rewards, but they may prove even more beneficial in forging stronger relationships and alignment with independent physicians.

"We developed this with independent primary care physicians in addition to our employed physicians to work together on our shared savings programs," he says.

As part of the program, the system has begun piloting using its hospitalists to provide post discharge dialog with home health agencies, for example.

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"In doing that, we have better insight into what's going on with the patient and we believe it will reap rewards in better healthcare for the patient coming out of the hospital," he says.

What's unique about the convener partnership is that naviHealth has experience and data with post-acute market, and can prove utility in helping guide the patient to the next best step for post-acute care, Pope says, whether it's home health, skilled nursing, or acute rehab that will get patients back to functional status more quickly and with fewer complications.

The best part, he says, is that it "allowed us to manage the project without investing a lot of new resources and developing our own case management program for this," he says. "Instead we fall back on their experience."