One Hospital's Recipe for Bundled-Payment Success

The primary elements of UnityPoint Health Meriter Hospital's bundled-payment model are care navigators, relationships with cost-effective skilled nursing facilities, and a robust home-health capability.

This story was originally published in September, 2015.

Over the past five years, federal officials have targeted hospital readmission rates, including payment penalties for conditions such as heart failure and pneumonia in the Hospital Readmissions Reduction Program (HRRP).

The HRRP penalties have spurred change, says Jeffrey Brenner, MD, executive director of the Camden Coalition of Healthcare Providers, a nonprofit organization working to improve population health and promote value-based care in one of New Jersey's most disadvantaged communities.

"This is the most exciting moment of my career. Partly because of readmissions penalties, people are having discussions they have never had before," he says.

From 2007 to 2011, the all-cause 30-day hospital readmission rate for Medicare fee-for-service beneficiaries held steady at about 19% to 19.5%, according to the Centers for Medicare & Medicaid Services.

The Medicare FFS beneficiaries readmissions rate fell to 18.5% in 2012 and 17.5% in 2013.

"When everything is said and done, the whole health system is going to look different," Brenner says of initiatives such as HRRP that are accelerating efforts among healthcare providers to build more seamless care continuums, improve care coordination, establish community partnerships, and engage patients to set and achieve their health goals.

For hospitals and physician practices, the key to readmissions-reduction success is working with community partners to effectively serve high-risk populations such as elderly patients with multiple chronic conditions, he says.

"You have to reach out to the community to have an impact."

Bundled Payments Drive Change at Community Hospital

In Madison, WI, UnityPoint Health Meriter Hospital has used bundled payments for hip and knee procedures as a springboard to quicken the organization's adoption of value-based care and to establish better relationships community partners.

Meriter, a member of Iowa-based UnityPoint Health that features a 448-bed community hospital, started performing knee replacement procedures under bundled payments in 2012 and contracted with CMS to performed hip procedures through the agency’s Bundled Payments for Care Improvements program in 2014.

For the fiscal year ending December 2014, UnityPoint Health posted net revenues at $557 million. Meriter was UnityPoint Health’s strongest subsidiary in 2014, posting net revenue at $405 million.

Readmissions reduction is one of the primary goals in Meriter's approach to bundled payments, says Philip Swain, PT, MBA, former director of orthopedics and rehabilitation at the hospital and currently director of orthopedics at UW Health in Madison, WI.

For lower-joint surgeries, readmission rates fell 68% after Meriter started bundle-payment contracting, he says. "It had a halo effect over all of our joint-replacement patients."

The primary elements of Meriter's bundled-payment model include deploying care navigators, building and maintaining relationships with cost-effective skilled nursing facilities (SNFs), and establishing a robust home-health capability.

Key Coordination Role: Care Navigators

To staff effective bundled-payment programs, care navigators are critically important, Swain says.

"They hold the hand of the patient all the way through the care continuum. They look proactively at risk factors. They start mitigating those risks before the patient even goes into surgery."

The care navigators are part of the patient discharge process and stay in touch with patients through phone calls after they leave the hospital. "They make sure the patient's medication is working. They eliminate as many pitfalls as possible."

Care navigators serve as an essential point of contact for patients before, during and 90 days after a hip or knee replacement procedure, says Pamela Dahlke, Meriter's director of care coordination. "We follow those patients through a more extended period of time."

Care navigators play a pivotal role in the post-acute care setting, she says. "High success comes with connecting patients with providers who they can get to."

Establishing SNF Partnerships

When care navigators began reaching out to community partners, Dahlke says local SNFs were "skeptical at first," chafing in particular over the drive in bundled-payment contracting to shorten length of stay at hospitals and post-acute-care facilities.

"In this journey, we are all in it together; but when you talk about length of stay, it's a difficult conversation to have."

Before participating in bundled-payment contracting, Meriter did not have strong relationships with SNFs and the hospital made establishing partnerships with cost-effective facilities a top strategic priority, Swain says. "It took a while to break in."

He says the relationship-building process featured three steps:

• Outreach to SNFs that was designed to share Meriter's approach to bundled-payment contracting and to identify facilities with partnership potential
• Crafting informal partnerships with cost-effective SNFs that were willing to align with core bundled-payment principles such as limiting length of stay
• Establishing formal SNF partnerships that include contractual agreements such as care-coordination commitments

Robust Home-Health Capability

Home-health nurses are the frontline staff members for the hospital’s care transition program, which features home visits and an average of five check-in phone calls in the 30 days following hospital discharge.

"We can help get patients out of the hospital and prevent readmissions. Keeping the care at home—safely—will drastically reduce cost of care to the system," says Mandy McGowan, director at Meriter-UnityPoint Health Home Care.

Home-health nurses have been integrated into Meriter's electronic medical record system, which boosts care coordination and eases the hospital discharge transition, she says.

"The discharge goes much smoother. We have what we need. We work with discharge planners in the hospital. They speak with us several times per day."

The communication between hospital staff and home-health nurses is fundamental to post-acute-care success when treating high-risk patients, she says.

"We have built up the comfort level of discharge planners so they can talk with patients about post-acute care options. All discharge planners spend at least one day training with home health."

Meriter's care transitions program involves an intense level of patient engagement, McGowan says.

The home-health staff calls patients in their hospital rooms the day before discharge to outline the discharge process. Depending on the risk level for complications, home-health nurses visit or call patients at home on the day of discharge to review care plans, check medications, urge follow-up visits with the orthopedic surgery team, and make sure patients are prepared to recover at home.

"We talk with them about their diagnosis and what happened during their acute episode. We ask them what they were feeling the day when they needed to go to the hospital, so they don't panic if that takes place again. They have a plan in place."

After the day of discharge, patients in the care transitions program receive a phone call three days later, then weekly for 30 days.

Meriter's care transitions program is having a neutral financial impact on the organization, but the effort is clearly helping to avoid unnecessary medical spending, McGowan says.

"We can avoid observation readmissions to the hospital. There are things we can do in the home like draw labs that avoid a trip back to the hospital… We can help keep patients at home rather than in a skilled nursing facility, which is a tremendous financial benefit to patients."