Beyond the walls of a hospital — Formalizing a post-acute care strategy for cross-continuum care

What happens in Vegas may stay in Vegas, but what happens outside the hospital is increasingly a crucial point of concern for all care providers — especially when it comes to post-acute care. Alternative-payment and value-based care models, such as accountable care organizations (ACOs) and bundled payment programs, are evolving how health system leaders engage and work with post-acute care providers in their quest to deliver better population health and more healthful, long-term outcomes.

This content is sponsored by Premier Inc.

In yesterday's fee-for-service world, most health systems didn't have to assume financial responsibility for a patient's care and service after discharge. As a result, many organizations had loose, informal referral relationships with post-acute care providers. They also lacked meaningful patient outcome data and provider-performance data to recommend the best recovery setting for patients.

But that's changing.

Today's health systems hope to succeed in the emerging value-based payment environment. To do so, they need a comprehensive strategy where post-acute providers are a critical extension in care delivery.

Almost half of Medicare patients use post-acute care in some fashion following hospital discharge, and the government has been gradually adjusting provider reimbursement for the cost and quality of service that occurs beyond the inpatient setting. Thus, health systems are now 'on the hook' for care delivered beyond the acute setting — both financially and from a total quality vantage point.

"The Acute Inpatient Prospective Payment Program has always been focused on just that — inpatient care," says Andy Edeburn, principal performance partner at Premier Inc. "By design, the payments provided no incentive for what happened outside hospital walls." According to Mr. Edeburn, many hospital leaders are often surprised to learn that post-acute care spending often rivals or exceeds inpatient costs.

Health system executives have become increasingly more aware of how patient outcomes and costs associated with post-acute care are bearing on their own systems' bottom line and that the status quo is no longer sustainable. According to a 2016 Premier survey, 85 percent of health system leaders are considering creating or expanding partnerships with high-performing, post-acute care providers. While hospital and health system leadership sees value in forging new partnerships with these providers, many recognize they need guidance when navigating the necessary steps, including establishing an organizational infrastructure to support these partnerships and identifying top-performers through cost and quality data.

Post-acute care variability and spending
The absence of oversight in post-acute care has been largely driven by three things —access to good data, transparency around post-acute costs, and variable quality. Nursing homes, home health agencies and long-term acute care hospitals are just like their hospital counterparts — they each operate differently, driven by their individual business model. Faced with limited oversight, significant variation among post-acute providers exists in both quality and cost of care, and the characteristics unique to each community foster an environment where care may be duplicative, unnecessary or misused.

Operational variation leads to clinical variation, which drives up spending. Data from a 2014 study published in the New England Journal of Medicine highlights the issue quite clearly: The best-performing post-acute providers had average Medicare lengths-of-stay fewer than 24 days, compared to more than 34 days for low-performing providers. This variation translates financially to around $4,000 per admission. Put another way, there is substantial savings to be gained in partnering with a high performer.

Variations in post-acute care quality can ultimately increase acute readmissions and negatively impact patient outcomes. A 2016 MedPAC report revealed significant variability among five quality measures in skilled nursing facilities, including readmission rates and patient falls with major injury.

Without good quality data from post-acute care providers, hospitals rarely change their referral patterns. "Historical relationships are often a key driver of post-acute use," says Mr. Edeburn. "A typical hospital may regularly refer to as many as 20 to 30 post-acute partners, simply because that's what they've always done."

Formalizing partnerships
To improve quality and lower costs, hospitals should consider establishing more formalized relationships with post-acute care providers. Hospitals should set criteria for what they seek in a partner, and then compare potential post-acute partners based on these parameters. If a hospital participates in an ACO, the focus might be on leveraging post-acute utilization to control spend. In a fee-for-service environment, addressing post-acute care use might be essential for reducing acute care length-of-stay or readmissions. All formal partnerships will include an enhanced transition plan between hospital and post-acute care to increase patient satisfaction.

When it comes to establishing effective networks, Mr. Edeburn suggests five best practices for hospitals to consider.

1. Understand roles and accountability: Before pursuing any formal partnerships, a hospital should first understand its internal performance and behavior when it comes to post-acute care. "Are there consistent practices and processes in place, or could they benefit from improvement? " asks Mr. Edeburn. With a clear understanding of opportunity areas, leaders should develop goals for change. From there, organizations can carve out specific responsibilities for change on both sides and establish a strong line of communication between health systems and post-acute care providers. Mr. Edeburn emphasizes the partnership is not a cause-and-effect relationship: "The hospital has to engage, be a good team player and build consensus around change. People are often surprised at how much work it can take."

2. Grasp consumption, costs and outcomes via data: Data is everything when determining whether a post-acute care provider would be a good partner for a hospital. Hospitals should leverage data to pinpoint gaps in care, opportunities for improvement on both sides and align clinical practices for better quality, and if important, lower costs. "Transparency of data is the absolute key in all of this," explains Mr. Edeburn. "Until you dig into the data, you won't truly know how post-acute care facilities are being used or what outcomes are associated with their use. Nor will you understand how your own behaviors potentially contribute to post-acute care use."

Post-acute care includes a variety of settings: home care agencies, acute rehabilitation facilities, SNFs and long-term acute care facilities. Hospitals can use data to figure out where their patients are heading, how long they are staying in the post-acute care setting, and what kind of outcomes are being achieved.

3. Begin and maintain a conversation with post-acute care providers: Equipped with cost, quality and market data, hospitals must head into the market and figure out who fits the bill as an ideal partner. "You have to constantly communicate and engage directly with post-acute providers to really effect change," warns Mr. Edeburn. "Just picking a network is the first step."

He has watched many organizations simply select their partners but fail to take the next steps and actively manage these relationships. A 2016 NEJM Catalyst survey reports a similar trend, in which 56 percent of respondents said they had not personally visited or observed a post-acute care facility within the last five years. Mr. Edeburn recommends hospitals view their post-acute care partnerships as any other facet of the business that requires hard work and collaboration.

4. Create a preferred network: Ultimately, hospitals need to find partners that align with their organization's specific needs, values and systems to provide coordinated care across the continuum. The NEJM Catalyst survey highlighted that more than half of health system executives reported their organization has some form of contractual arrangement or informal relationship with a post-acute care network.

5. Work together to enhance patient care: Finally, hospitals should collaborate with their post-acute care partners to not only improve acute to post-acute transitions, but also to broaden the clinical skill set of post-acute providers. Improving patient outcomes while decreasing post-acute utilization means providers will need to do more in a shorter timeframe to get the best outcome. For many post-acute organizations, they will look to the acute partner to help develop aligned protocols and pathways, as well as strategies to appropriately address increasingly complex patients. Both organizations must strive to decrease clinical inefficiencies and develop practices that bridge gaps in care.

Sheltered in a fee-for-service model, many organizations have been able to avoid direct engagement with post-acute care providers. Expanding value-based care models and new quality paradigms, however, will ultimately affect everyone and improve outcomes.

"Hospitals are much like any other consumer," says Mr. Edeburn. "Behavior changes most often when the financial pain gets real. There's a real opportunity to get ahead of that."

In getting ready for that reality, hospitals must broaden their efforts to engage with post-acute providers. Leveraging performance data, analyzing costs and choosing effective partners that will support a seamless healthcare experience for patients are key first steps for hospitals to start improving their post-acute strategy.

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