Hospital administrators, take note: In an uncertain time about the future of healthcare policy, there is still plenty of visibility for you to keep moving your organization forward in one key regard: the move to value-based care.
Despite the Republican administration's now-delayed plans to dismantle much, if not all, of the Affordable Care Act, a basic principle for reforming medical payments and delivery remains intact for the foreseeable future: improved outcomes at lower cost. And this will often mean partnering up with the right healthcare provider.
Hospitals and other care providers, such as skilled nursing facilities, are going to have to work hard to join forces and gain efficiencies. In fact, your directive for 2017 may be: collaborate or die.
Networks Narrowing
With narrowing payment networks, insurers continue to reduce patient choices for reimbursed care –– and hospitals are responding. For example, through claims data analytics, payment models, and quality measurements, hospitals are getting choosier about SNF partners in an effort to narrow their networks. In fact, SNF partner selection is a greater priority for hospitals than ever before, but more still needs to be done.
Recently, I developed a case study about a hospital in metropolitan Detroit that had 2,000 Medicare discharges to 112 different SNFs. 860 discharges went to three well known facilities while the remaining 1140 discharges were scattered among 109 facilities. That's a lot of relationships and a big time investment if the hospital wants to check out the quality and interact with facilities ... as we hope they would.
Of course, everyone wants to have clinical coordination and clinical integration. It means better outcomes. Perhaps the best place to start is by developing a more formal SNF selection process for discharge planners to follow.
Money Ball
Healthcare is a team sport, and hospitals want the best players.
In fact, they should use "Money Ball" tactics, meaning data analytics, particularly improved access to Medicare claims files, often via so-called data shops that put the statistics together in easy-to-read formats. For example, a hospital administrator can now access the data and calculate the average patient episode cost of discharges to various nursing homes.
Of course, it's not all about the simple average cost per patient episode. In fact, under traditional Medicare fee for service, there may be providers with higher average costs that are simply operating within the parameters of a system that doesn't encourage efficiency. More importantly, referring hospitals can compare SNFs on a variety of quality and outcome indicators including the CMS 5 star measures, functional improvements, re-hospitalizations and emergency department visits.
High rates of hospital re-admission can drive up the total cost of per-patient care. In fact, hospital re-admission alone can double the cost of an episode of care, according to one private study. In 2013, penalties for re-admission alone totaled $280 million for 2,213 hospitals in one government survey.
Other SNF operating practices are important to referral sources, too. They include clinical staffing levels (especially the use of registered nurses), ongoing clinical training programs, clinical care coordination, care transition tools and protocols and patient and family satisfaction surveys.
Bottom line: The lesson to be learned here is that hospitals, more than ever before, are going to pay increasing attention to developing closer relationships with SNFs and partners that best control cost and quality measurements. It's a numbers game.
Betsy Rust, a CPA, is also a consulting partner with Plante Moran's senior care and living practice in Detroit. She can be reached at Betsy.Rust@plantemoran.com
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