In the past, hospitals did not face a penalty if discharged patients with pneumonia, congestive heart failure or acute myocardial infarction were readmitted within 30 days. That changes in October.
New looming penalties are forcing hospitals to rethink their referral practices, adopt the Accountable Care Organization model, and form strategic partnerships with skilled nursing operators that can consistently demonstrate quality clinical and financial outcomes.
As of early June, 59 Medicare ACOs were already in place. “In addition, major insurers, including Aetna, CIGNA, United Health, and Blue Cross are in the process of acquiring physician group practices to form ACOs,” said Kathleen Griffin, Ph.D., national director of post-acute and senior services for Health Dimensions Group. Because ACOs bear risk for Medicare or insurance payments on an annual basis, Griffin explained that ACOs are interested in providers that can effectively and efficiently manage patient care, while reducing overall healthcare expenditures.
This shift is creating exciting new opportunities for proactive, quality-driven sub-acute care providers. At the same time, it's also spurring significant challenges for operators that haven't accepted that the days of silo-based care are numbered and being replaced with ACO models, bundled payments and a true partnership approach amongst providers across the care continuum. The bottom line, experts stress: while healthcare reform and managed care initially served as the impetus for these changes, it's since become market-driven, whereby the value of a unified healthcare approach that combines good care and positive outcomes with lower costs is now widely recognized and promoted.
“This is not going away. It's here to stay,” confirmed Robert Kramer, founder and president of the National Investment Center for the Seniors Housing & Care Industry. “Hospitals and large physician groups have a vested interest in knowing the outcomes of their potential partners and aligning only with those providers that can demonstrate good outcomes.”
The days of long-term care and seniors housing providers relying on friendly relationships with hospital discharge planners to keep them in the referral mix are quickly coming to an end, he said. That's because senior-level executives are increasingly basing their referral and partnership decisions on clinical and financial performance data.
“Any long-term care or seniors housing provider that wants to continue doing business with hospitals needs to know their own data for readmissions, and also be able to use and share that data to demonstrate their strengths and good outcomes with potential partners.”
Making the case
Proactive data gathering and dissemination is critical for operators looking to gain or maintain a strong foothold in the new ACO-model landscape. In the absence of such communication, hospitals will gather their own data on existing and prospective care partners. Unfortunately, much of that data may be outdated, gathered informally or anecdotally, or attained from sources such as the Center for Medicare & Medicaid Services' Five-Star Quality Rating System, which don't factor in resident uniqueness or effectively identify an operator's true strengths and weaknesses.
“There's not a general acknowledgement by hospitals on the need for making case mix-adjusted judgments and not just blindly basing referral or partnership decisions on data that doesn't provide a full and accurate picture,” said Steven Littlehale, executive vice president and chief clinical officer for PointRight Inc.
Many nursing homes have low rehospitalization rates, collectively, and are automatically viewed as superstars. If a hospital were to dig deeper and ask the right questions, however, it would find that quality scores differ greatly based on resident census and the actual levels of care provided. Scores for a continuing care retirement community or traditional nursing home providing custodial care , for example, will be very different from a step-down skilled nursing facility that admits post-surgical or complex medical patients directly from surgery, Littlehale explained. He added that residents' condition, comorbidities, age, cognitive function, and a host of other factors all must be considered when calculating and evaluating rehospitalization rates. “Many hospitals don't make that connection due to their orientation to medical diagnosis, so skilled nursing facilities need to effectively use their own data and then communicate it effectively to demonstrate their actual performance.”
Information technology plays a vital role in effective data collection, analysis and dissemination to prospective partners. “If a nursing home isn't getting good data and analyzing it effectively and consistently, they're not going to know what they're good at and where their opportunities lie,” explained Barry Fogel, MD, founder and executive vice president, PointRight. “You have to use sound analytics based on risk-adjusted, [patient-level] data to determine your strengths and outcomes, and better align yourself with hospitals. This isn't the type of calculating that can be done in your head.”
Power of PI
Robust data analytics tools, such as those offered by PointRight, can help operators build a strong business case for collaborative relationships. Such tools allow facilities to consistently capture data on rehospitalization, determine which disease diagnoses are most effectively managed by the facility, identify readmission risks, clinical weaknesses and other outcome predictions based on specific resident populations and case mixes, and establish a strategy for continuous clinical and financial quality improvement.
Identifying outcomes or “pain points” that are most important to a referring hospital is essential. Littlehale suggests that skilled nursing providers actively research and compare readmission rates by disease type for prospective hospital partners. If a particular hospital is largely focused on pneumonia readmissions, for example, a skilled nursing operator that does exceptionally well in managing pneumonia can use data analytics to demonstrate its competency and make a case for a new or continued partnership.
A provider's commitment to using data and analyses for ongoing performance improvement will also go a long way toward sealing the deal with a prospective care partner. After all, a facility's greatest strength is often its ability to improve upon its weaknesses. As Griffin explained, if a skilled nursing facility's 30-day hospital readmission rates are poor, it must have a formalized procedure to improve the rates through systematic review, and a plan of improvement. “That way, even if the facility's initial data show less than desirable results, the SNF can describe its goal for readmissions and the realistic and formalized plan to achieve that goal.”
Initiative also pays big dividends. If a skilled nursing facility hasn't yet been approached by the primary referring hospital, Griffin encourages the administrator to schedule a meeting with one or all of the hospital's C-suite executives.
“Armed with [quality] data, the first SNF to the table will set the bar for all other potential partner SNFs.”