The Cleveland-based health system has set ambitious multi-year goals for making changes across its clinical, physical, and operational initiatives.
For many health systems, adapting to change is a near-term inevitability. They proceed dutifully, and with caution. You can almost hear the groans.
But for The MetroHealth System, the safety net provider for Cuyahoga County, OH, change is a welcome opportunity to adopt new strategies and abilities.
"Innovations and new environments all demand new strategies and abilities," says CFO Craig Richmond. Richmond made his remarks in August at the HealthLeaders CFO Exchange in La Jolla, California.
For the fiscal year ending Dec. 31, 2016, MetroHealth reported total revenue at $1.04 billion. In 2015, the health system posted total revenue at $941 million.
The health system's patient-population has grown from 180,000 patients in 2012 to a projected 300,000 next year. "We've had remarkable success and growth over the years," Richmond says.
Expanding its services has been a top priority. From 2012 and projected through 2018, MetroHealth will have grown in these ways:
Inpatient facilities – from one to three
Emergency departments – from one to four
Outpatient facilities – from 20 to 30
System-owned pharmacies – from three to nine
The system is investing heavily at the brick-and-mortar level, Richmond says. "We just executed on one billion dollars in financing to rebuild a majority of our main campus.
From a strategic perspective, MetroHealth is trying to harness the transformational potential of change, he says. It has adopted a three-pronged operational unit called DoIT: the Department of Integration and Transformation.
The DoIT trident features business-intelligence data, robust project-management capabilities, and a decision-acceleration model that "allows us to accomplish more at an accelerated pace," Richmond says.
1. The Department of Operations Research and Analytics (DORA):
Analyzes specific business processes or questions;
Manages business rules for inter-departmental data use;
Generates forecasts, simulations, and linkages of clinical, financial, and operational data
2. Results Management Office (RMO):
Focuses on desired outcomes;
Uses data-driven methodologies for optimizing innovation and cutting waste;
Leverages employee knowledge to boost quality of decision-making;
Features several project management capabilities, such as prioritizing initiatives, optimizing resource allocation, reducing risk, and increasing return on investment.
3. Center for Disruptive and Radical Experimentation (DARE):
Fosters employee participation in decision-making, with emphasis on enabling staff to challenge the status quo.
DARE efforts include Meeting-Free Fridays, which encourage spontaneous interactions among staff members, an Idea Lab, which serves as a dedicated space for DoIT activities, and about 40 interdepartmental "game-changers" – employees who serve as proponents of change across the organization.
"Each one of these individual divisions can have a significant impact within the organization," says Richmond. "But similar to a multifunctional tool, when all three are working together you can create better results."
For the period spanning 2012 to 2018, MetroHealth set goals for transformational change in three areas—clinical, operational, and physical:
Clinical features– expansion of its primary-care network, IT-enabled integration of care settings, care management, and assumption of financial risk
Physical features– distribution of anchor facilities evenly across the local market and the construction of a new main campus
Operational features– building analytics capabilities and restructuring based on the service-line model
Creating a culture of continuous process improvement generates significant gains, Richmond says, quoting legendary basketball coach John Wooden, "If you don't have time to do it right, when will you have time to do it over?"
"We are hearing from many of the hospitals with which we work that the first two-to-three quarters have been challenging, and most opportunities for episode savings are in post-acute costs: rehab and skilled nursing facility (SNF) utilization," Christopher Stanley, MD, MBA, a director at Chicago-based Navigant Consulting said this week.
"It's a bit too early to generate a broad view of how hospitals are performing in 2017 when downside penalties kick in, though we expect many hospitals will incur a penalty under the program in 2017."
On April 1, 2016, the Centers for Medicare & Medicaid Services imposed mandatory participation in bundled payments for hip and knee replacement procedures for about 800 hospitals under Medicare's Comprehensive Care for Joint Replacement reimbursement model.
In two hospital surveys last year, the majority of hospitals polled reported they were not ready for CJR. A FORCE-TJR survey found 56% of hospital orthopedics programs reported being unprepared for CJR.
Avalere Health, a consulting firm, released survey results indicating that 60% of the hospitals required to participate in CJR could lose money in the bundled-payment model when downside risk began in January.
Last year, Fred Bentley, vice president of Avalere's Center for Payment & Delivery Innovation, said he was not surprised over widespread lack of preparedness for CJR.
"[Providers] have really been focused on the care of patients in the four walls of the hospital and not really on the post-discharge side. They have been focused on growing their orthopedics volume and their referrals, and now they're going to be focused on the entire episode. And that's a big shift."
Under the CJR bundled-payment model, each participating hospital has been given a target price for hip and knee replacement procedure episodes, which include the cost of post-acute care. Last year, the cost of hip and knee replacement procedure episodes for Medicare patients varied widely across the country, from $16,500 to $33,000, according to CMS.
Hospital preparedness to participate effectively in CJR has improved, but more work is needed, Stanley says.
"Midway through 2017, I would characterize many of these hospitals as underprepared instead of unprepared. Facilities now know where episode costs occur: initial hospitalization, post-acute, readmissions, etcetera. However, too many hospitals don't know how to affect change in these categories."
Establishing an effective post-acute care strategy is critical to success in CJR, he says.
"We suggest focusing first on post-acute use: narrowing down the number of SNFs that a hospital uses based upon quality, SNF length of stay, and ability to collaborate. Unfortunately, many hospitals are unable or unwilling to change SNF use patterns, which takes away one of the most important tools to succeed in the CJR program."
The Trump administration's approach to bundled-payments programs is maturing but uncertainty remains in the regulatory environment, Stanley says.
"The message from CMS is that CJR and similar mandatory programs will continue for now, though they likely will not expand in number under the current administration."
The health system's approach to delivering value to patients realizing cost-efficiency gains from consolidation, cost-cutting, and the deployment of a new performance-measurement methodology.
The leadership team at Yale-New Haven Health System, which operates four hospital campuses in Connecticut, is striving to make value a core cultural element of the organization.
At the first annual National Symposium on Value Innovation at Yale, last year, YNHHS President and CEO Marna Borgstrom, MPH, said the health system's leadership is committed to generating value for patients as opposed to emphasizing cost-cutting alone.
"It's not about what we can do, or what we need. It's about generating value for our patients," she said. She described the effort as a "quest for unparalleled value."
On the quality and patient safety side of the value equation, YNHHS has adopted several initiatives over the past five years such as the development of clinical rapid response teams and the deployment of predictive analytics in clinical settings that have contributed to significant gains in patient outcomes.
In September 2012, YNHHS acquired the former Hospital of Saint Raphael, a struggling safety-net hospital in New Haven located about a quarter mile from the Yale-New Haven Hospital campus. The deal created a 1,541-bed, dual-campus hospital in the heart of the city.
2. Cost-Efficiency Gains from Consolidation
Largely through consolidation of clinical services and achieving economies of scale linked to the Saint Raphael acquisition, YNHHS was able to reduce annual costs by about $200 million, according to Richard D'Aquila, executive vice president of YNHHS and president of Yale-New Haven Hospital.
Regulatory commitments helped drive the consolidation strategy, he said at the symposium. "There was one hospital, one provider number, one model for clinical services."
3. Cutting Operational Costs
On the cost side of the value equation, YNHHS was able to reduce spending by about $150 million from 2012 to 2015, and the figure was a focal point at the symposium.
The organization had set a target for $125 million in cost savings over the four-year period, primarily in four categories:
Clinical redesign
Labor
Non-labor
Human resources
"We beat our target, and it is sustainable," Abe Lopman, senior vice president of operations at YNHHS, said at the symposium.
Patient care accounts for about 83% of the health system's annual spending, so cost savings from clinical redesign were the biggest budget category targeted for spending reductions, at $60.8 million. Actual costs savings from clinical redesign were $33.4 million, but the shortfall was not surprising, Lopman said.
"This is something that has to be part of your culture. It takes time to do it. Over time, we expect it to be better."
The health system was able to exceed its cost-savings projections in three areas: human resources, labor and non-labor. The total cost savings targeted in those areas was $64.2 million, with $116 million in actual cost savings achieved.
4. New Performance Metrics
The adoption of Quality Variation Indicators (QVI) performance metrics have helped YNHHS improve the delivery of value in medical services, Stephen Allegretto, vice president of strategic analytics and financial planning at the health system, told HealthLeaders during the symposium.
At YNHHS, QVIs feature more than two dozen categories of negative clinical outcomes such as implant complication, transfusion reaction, air embolism, drug poisoning, shock, infection, and obstetric trauma.
The performance methodology allows the health system to harness data for clinical quality and cost of care, which supports the organization's "cost-value initiative."
Understanding variations in risk for different categories of patients is critical to setting successful strategic approaches to managing exposure in risk-based contracts.
The shift to value-based care model in healthcare requires development of a key skill set—managing exposure to risk in risk-based contracts.
Managing risk exposure was a focal point during a recent HealthLeaders Media Roundtable event in Denver, with the panel featuring three physician leaders and a healthcare-finance expert from New York City-based Bank of America Merrill Lynch.
Risk exposure varies across a plethora of patient categories, said Alan Lazaroff, MD, co-founder and coding medical director of Physician Health Partners, a Denver-based physician organization.
"There are a lot of different risks that people face. For example, in geriatrics, one of the worst risks is the risk of having to go to a nursing home. The risk factors for that are completely different than the risk factors for going in the hospital. If you have Alzheimer's disease, that is the risk factor for going into the nursing home. Alzheimer's probably affects the hospitalization risk, but not as much as heart failure or coronary artery disease."
Setting patient-outcome objectives is critical to success in managing risk-based contracts, said Louis Levitt, MD, vice president and a practicing physician at The Centers for Advanced Orthopaedics, a physician group based in Bethesda, Maryland.
"You have to define the goals you are trying to achieve. If you can't define goals—and dementia is a tough one to define—it is hard to be successful. If you are successful, what will you see changed? Keeping patients at home? Keeping them out of the hospital?
Payer mix has a significant impact on managing risk exposure, said Rick Lopez, MD, senior vice president of population health at Atrius Health, a Newton, Massachusetts-based physician organization.
"In the commercial population, people who are at high risk of hospitalization tend to be the sicker commercial patients who almost look geriatric in terms of their conditions. We developed a separate algorithm to predict the risk of spending more than $100,000 in the next year, and when you apply that algorithm to the commercial population, the big costs are not the hospital costs. The big costs are the pharma costs and the physician procedures."
Data management is an essential element for success in risk-based contracting, said Seattle-based Kerri Schroeder, senior vice president and credit products executive at Bank of America Merrill Lynch.
"Most providers are struggling with data—having congruent access to data with the payers, so you have all that claims data in a way that you can consume it. You need data analysts who can merge claims data with EHR data and any other data sources related to socio-economic issues that can help predict risk in patient populations. You need clarity about the composition of the population, how you are going to measure success, and the spending benchmarks.
"Another problem is that every provider is dealing with multiple payer contracts, and the rules are different for each one. So, how do you create one process and one set of business rules that work for all of the different payment arrangements that you are under? That is a huge challenge."
For the upcoming federal fiscal year, Medicare payment rules and methodologies for hospital inpatient care feature a payment-rate hike and $800 million increase in uncompensated-care reimbursement.
Medicare reimbursement to about 3,330 acute-care hospitals nationwide is expected rise $2.4 billion in the federal fiscal year beginning Oct. 1.
In the FY2018 Inpatient Prospective Payment System (IPPS) final rule released yesterday, federal officials estimate Medicare reimbursement to acute-care hospitals will rise about 1.3%. This figure represents the adjusted base payment rate and the hospital-to-hospital financial impact of incentive payment programs such as the Hospital Readmissions Reduction Program (HRRP).
A factsheet produced at the Centers for Medicare and Medicaid Services (CMS) details features of the IPPS final rule, which is slated for publication in the National Register on Aug. 14.
The adjusted base payment rate, which is pegged at 1.2% has five elements:
Market basket update +2.7
Productivity update -0.6
Removal of a one-time adjustment made in FY2017 to compensate hospitals for implementation of the Two-Midnight Rule for hospital-admission status -0.6
The American Hospital Association (AHA) posted an advisory report on the Chicago-based organization's website that offered a tepid take on the new IPPS final rule, including describing the Two-Midnight Rule payment adjustment as designed "to restore unlawfully instituted two-midnight policy cuts."
In the advisory report, AHA Executive Vice President Tom Nickels criticizes two provisions of the new final rule: a data-collection worksheet for uninsured patients and the refusal of CMS to offset a hospital-reimbursement cut in FY2017.
"We continue to have concerns over the accuracy and consistency of the 'Worksheet S-10' data that CMS will use to determine the cost of treating uninsured patients. … We are also disappointed that CMS has decided not to restore last year's excess cut to reimbursement rates for hospital services. While a reduction to the hospital update factor was mandated by law in 2012, CMS ignored Congress' intent by imposing a cut that was nearly two times what Congress specified."
There are several other elements of the new IPPS final rule that will impact acute-care hospitals:
CMS is easing provisions of the Medicare and Medicaid electronic health record (EHR) incentive programs. The alleviation provisions include a change to "EHR reporting periods for new and returning participants attesting to CMS or their state Medicaid agency from the full year to a minimum of any continuous 90-day period during the calendar year," the CMS factsheet says.
Readmission penalties assessed to hospitals under HRRP are being changed to reflect a hospital's performance relative to other hospitals with similar numbers of Medicare and Medicaid dual-eligible patients.
Medicare payments to hospitals for uncompensated care under the Disproportionate Share Hospital program are slated to increase about $800 million over the FY2017 funding level.
The politics of repealing the Patient Protection and Affordable Care Act have soured, leaving President Trump and repeal-minded Republicans in Congress with few paths forward on healthcare reform.
With last week's collapse of Obamacare repeal-and-or-replace efforts in Congress, the Republican Party's options have dwindled to repair or wreck, a trio of DC healthcare-policy watchers says.
"Republicans have not been able to pass several versions of replace. They have tried a big version. They have tried a skinny version. They have tried repeal-only. Instead of repeal-and-replace, it's time to move to repair," Earl Pomeroy, a former Democratic U.S. representative from North Dakota, told HealthLeaders today.
At this point, any repeal effort appears doomed, the ex-president of the National Association of Insurance Commissioners says.
"In healthcare, good policy is good politics. The lesson we learned on repeal-and-replace is the policy was not very good. It threw a lot of people out of coverage. The public didn't like it; therefore, the politics behind repeal-and-replace were lousy."
Patient Protection and Affordable Care Act (PPACA) is politically primed for repair—even for Republican Party lawmakers and voters who have opposed the PPACA for the past seven years, Pomeroy says.
"The politics are clearly on the side of repair. We have moved past repeal-and-replace. Now, the options are wreck it or repair it. The politics are very poor on the wreck-it scenario. With the governing power held exclusively by the Republican Party in the presidency, House, and Senate. They will be held responsible for actions that wreck the insurance exchanges."
Finding Healthcare Reform Common Ground
There does not appear to be a legislative path forward for Republican lawmakers to repeal the PPACA, Nicholas Manetto, principal at Faegre Baker Daniels Consulting in Washington and former press secretary for a GOP congressman, told HealthLeaders today.
"I tend to agree with the take of several senators in leadership that unless something shifts to move a no vote to yes, there is not much value in pursuing a subsequent vote."
The legislative logjam presents an opportunity for Democratic and Republican lawmakers to stand on common ground and cut a deal on healthcare reforms, according to Pomeroy and Merrill Matthews, PhD, resident scholar at the Institute for Policy Innovation in Irving, TX.
Members of Congress on both sides of the aisle held several shared policy positions on healthcare before passage of the PPACA in 2010, Matthews told HealthLeaders today.
"There has always been support for addressing the problem of the uninsured. There was widespread support among Republicans and Democrats on providing some kind of subsidy to lower-income people to make sure they could afford health insurance. There was pretty wide report for repairing the safety net—you had 35 high-risk pools in the states."
Pomeroy says the commercial insurance market and Medicaid are two crucial areas where the rival parties in Washington have common interests among their home-state constituents.
"On insurance, the debate so far has shown there is enduring support for insurance coverage of pre-existing conditions. Most people think that if you have a health condition you should still be able to buy coverage. So you have to look at how you can make insurance markets function when you can't control the risks you have coming on the books. …
"The Medicaid component of the Affordable Care Act extended the ability of people with very modest incomes to finally get coverage, and the public is determined that that coverage should continue. That was fought over literally for months. … In the end, the Republicans could not get the votes to phase it out. That means that states that have not extended Medicaid may want to take another look at it."
While the Republican Party's healthcare proposals languish on Capitol Hill, Matthews says the Trump administration has a golden opportunity to broker a historic healthcare deal with Democratic lawmakers, as long as Donald Trump sits on the sidelines. "If Trump assigns cutting a deal to Mike Pence, he may be able to get it done. Trump seems too volatile."
He says the president should borrow a page out of his predecessor's playbook from early 2010, when Barack Obama invited Republican and Democratic lawmakers to the White House for discussions on healthcare reform.
"I think it was all for show, but Obama was always presidential. Trump can be presidential at times; but, at other times he can't. You never know which Trump is going to come out."
Ironically, an Obamacare-wreck strategy that ends federal subsidies on the insurance exchanges could be a route to repairing the PPACA, Matthews says.
"If Trump does not continue to make those payments, more insurers will pull out of the exchanges, and faster. It may take the catalyst of more insurers pulling out before they finally come to a willingness to agree on something."
A Massachusetts-based skilled-nursing facility sets a high bar for quality, invests in staffing and HIT, and has created operational efficiencies based on the proximity of its facilities.
Research published this month indicates post-acute-care at skilled nursing facilities could be a significant source of wasteful healthcare spending.
The lead author of the peer-reviewed study, Massachusetts Institute of Technology Professor Joseph J. Doyle Jr., says a big next steps is to examine best practices at good SNFs.
By at least three measures, Winchester, MA-based Salter Healthcare is a good SNF organization:
High Medicare Ratings: All three Salter Healthcare SNFs (Aberjona, Winchester Rehabilitation and Nursing Center and Woburn Rehabilitation and Nursing Center Are the other two) have 5-Star Medicare ratings on Nursing Home Compare.
Sustainable Finances: "We are able to have a margin that allows us to invest in IT, to invest in training, and to invest in rehabilitating the facilities, rather than just trying to hang on for another year," says co-owner Richard Salter.
Low Staff Turnover: In a sector with high rates of nursing turnover, Salter says his organization is noteworthy for staff retention. "We keep people for five to 10 years. They get the proper training; they have the proper skill sets; and they are working with other employees who also have proper training and skills."
Salter identifies five essential elements to his organization's success:
1. Invest in Staffing
Salter says his organization invests significant time and money in clinical-care staff, and quality is engrained in the organization's culture.
"When every other SNF looks at our cost of nursing, they say, "'You are spending too much money. How can you be in the 99th percentile in spending per patient on all of your clinical costs?'"
But if those costs were to be reduced, "you are not going to have high-quality care, and you are not going to have your contracts, and you are not going to be as good."
2. Value Human Resources
Morale is key to retention , says Salter.
"It's not just about how many staff you have, although that is important. It's about how long they have been there, how good they are, and how they show up for work in the morning."
"On the high-tech, high-touch spectrum, the people in healthcare are high-touch people. They want to feel good about the care they are giving their patients; they want to feel proud of their professionalism and their licensing because they chose this career and they chose this path; and they want to work with people who feel the same way."
Mediocrity is not tolerated. "The biggest mistake we make in management is when don't terminate someone who is doing a mediocre job.
"The employees are good," says Salter, "and they want other good employees working next to them."
3. Stay Small
The Salter Healthcare strategy is based on what it is not doing, he explains. "We are not doubling in size. We are not thinking about where we can buy more facilities and ramp up to become bigger."
The organization operates three facilities in the same geographic market, making it "efficient at filling the backroom stuff."
"Our goal is low cost and high quality. That is what everybody says, but it is easy to say and hard to do. The way we stay low-cost is to not over grow, and to not redirect resources to the next new project. We do what we do well, and we just keep doing it."
4. Manage Your Payer Mix
To continue to serve all comers—including frail geriatric patients—without going bust financially, Salter Healthcare benefits from a diverse payer mix.
"Sometimes, they are tough cases and there is great insurance. Sometimes, there is full Medicare reimbursement. Sometimes, you have a Medicaid patient, and you don't get paid much at all," Salter says.
"You have to have the proper mix of Medicare patients, private-insurance patients, and Medicare and Medicaid dual-eligible patients, so you have collectively enough revenue to cover the high expenses of the good care."
5. Invest in Technology
Over the past five years, Salter Healthcare has invested heavily in IT capabilities. "At our three facilities, we spend about a million dollars a year on IT—on software, and hardware, and people in that department. It's a huge number for an operation our size," Salter says.
"All the filing cabinets are gone. The nursing aides are working in kiosks documenting their bathing and weighing—it's like a giant McDonald's keyboard station with icons and pictures, so they don't have to be programmers. The nurses have access to the patient database."
Its investment in IT has boosted Salter Healthcare's care-coordination capabilities with hospitals and physicians, he says.
"We can interact with the hospital systems; and the doctors, when they come into our facilities, they can pop information into our system and the hospital system simultaneously."
The organization is "trying to make sure there is continuity between us and the hospitals, and, eventually, to home care. That's what we have to do to stay in this game."
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."
The National Quality Forum sends risk-adjustment model designers back to the drawing board after their largely unsuccessful attempts to link social risk factors such as ethnicity with medical-treatment outcomes.
A two-year trial designed to examine the impact of risk-adjusting medical-treatment performance measures for social risk factors has raised far more questions than it has answered.
On July 18, the National Quality Forum (NQF) released a report on the trial, which began in April 2015. The trial is most noteworthy for what it did not prove and more research is necessary, the report says.
"One of the most striking findings of the trial was that measures with a conceptual basis for adjustment generally did not demonstrate an empirical relationship of the social risk factors to the outcome measured," authors of the report wrote.
The impact of social risk factors such as income and education level on medical-treatment outcomes at hospitals and other care settings has been debated hotly for several years.
Supporters of risk-adjusting medical-service payments for social factors contend that patients with social risks are more challenging to treat, placing an unrecognized financial burden on safety-net hospitals and other caregivers in disadvantaged communities
Opponents of risk-adjustment for social factors argue that setting the bar low for medical services in disadvantaged communities could institutionalize healthcare disparities across the country.
"The frequent use of NQF-endorsed measures for payment purposes underscores the importance of ensuring accurate comparisons of providers so that rewards or penalties are fairly assessed and based on true differences in performance," Shantanu Agrawal, MD, president and CEO of NQF, says in a prepared statement accompanying the release of last week's report, "Evaluation of the NQF Trial Period for Risk Adjustment for Social Risk Factors."
On Monday, the NQF Board of Directors released a statement announcing a new three-year study that will be designed to draw deeper conclusions about risk-adjusting performance models for social risk factors.
"We support the launch of a new, three-year initiative to build on NQF's leadership in this area and the significant knowledge gained through its recently completed trial. NQF will work with its stakeholders to secure the necessary financial support for this critical initiative," wrote Board Chairman Bruce Siegel, MD, MPH, and Board Vice Chairman Jim Chase, MHA.
"The new initiative will focus on unanswered questions about social risk adjustment of measures, including determining what data are needed and how to access them. NQF will continue to consider adjustment for social risk factors as part of its measure endorsement criteria. This vital work reflects NQF's commitment to effectively deploying measurement to decrease health disparities."
During the two-year trial, 303 performance measures were submitted to NQF for review, with about one-third of the measures categorized as "outcome or intermediate outcome" metrics. Out of those outcome measures, 93 utilized risk adjustment in some manner.
Risk-adjustment models during the trial featured more than a dozen social risk factors, including race, distance from clinics, marital status, language, and country of origin. "Race, ethnicity, and payer (including Medicaid status) were the most commonly examined variables," the report's authors wrote.
In addition to not finding expected correlations between risk-adjusting for social factors and healthcare-provider performance, last week's report says the two-year trial encountered several roadblocks:
Paucity of data: Researchers encountered challenges finding comparable data sets of social risk factors at the individual level, and they struggled to include community-based data into risk-adjustment models. "NQF recognizes the current limitations of data availability but encourages developers to continue efforts to explore alternative data sources," the report's authors wrote.
Conceptual basis of research: The approach to identifying potentially impactful social risk factors during the trial lacked consistency, with 65 risk-adjustment models picking social factors for inclusion based on literature reviews that were largely speculative on the impact of social risk factors, and 19 models selecting social risk factors for inclusion based on data from prior research. "The conceptual model has been identified as a potential area for greater specificity," they wrote.
Risk-model remodeling: Accounting for social risk in medical-treatment performance measures remains an imprecise science and risk-adjustment for social factors must be optimized before conclusions are drawn on their impact.
Richard Humphrey will leave Texas Health Resources to take the chief financial officer role at Parkland Health in Dallas.
Parkland Health & Hospital System has named Richard Humphrey, CPA, MBA, as the large Dallas-based safety net hospital's executive vice president and CFO.
Humphrey currently serves as senior vice president of Arlington-based Texas Health Resources.
"Uncertainty is a given in the complex and evolving healthcare industry today," Fred Cerise, MD, MPH, Parkland's president and CEO, said Monday in a prepared statement. "Richard's extensive experience in healthcare finance will be invaluable as we navigate the challenges facing Parkland in the months and years ahead and strive to use resources effectively and efficiently to deliver care."
Humphrey is set to begin working at Parkland on Aug. 21.
In comments to HealthLeaders, Humphrey identified reasons why Parkland is a good fit for his career:
"The organization has a compelling mission and vision as well as a new world-class facility, but they also have a defined strategy for the future."
"As a member of Parkland’s senior executive team I will be able to collaborate with leaders and staff as we execute and refine the strategic plan."
"Although Parkland has a new facility, the operating margin is thin. I will be able to use my experience to take the lead in looking for ways to close the financial gap as we move from pay for volume to a triple aim of quality, patient experience, and cost efficiencies. In a prior setting, I was brought in to close a financial gap, and I can bring that experience to Parkland."
"I felt a strong connection with Parkland's leaders, and I look forward to working collaboratively with everyone in the system."
Parkland Memorial Hospital is an 870-bed facility linked with 12 community health centers. For the fiscal year ending September 2015, the organization posted total operating revenue at $977 million, with a $500 million operating loss.
The hospital has posted operating losses for several years and efforts to stabilize the organization's finances include a federally supervised corrective action plan adopted in 2012.
Hospitals based in Texas, which has not expanded Medicaid under Obamacare, face daunting financial challenges, Humphrey says.
"All organizations are facing declining reimbursements that are not keeping pace with inflation. There is continual pressure on operating margins especially for public safety-net hospitals such as Parkland. Medicaid and Medicare payments are shrinking as are various supplemental government payments, and the burden often falls on the local taxpayer. It is difficult to manage high volumes of low-income and uninsured patients at the same time there is uncertainty in government reimbursement."
In addition to his new role at Parkland and current role at THR, Humphrey has held two other top healthcare-finance posts:
Vice president of finance and CFO: THR Harris Methodist Hospitals, Fort Worth, TX, which features four hospitals
Vice president of finance and CFO: Kershaw Health System, Camden, SC, a public safety-net integrated health system featuring a regional medical center
The CPA is a decorated Air Force veteran, attaining the rank of captain. He served as a nuclear-armed B-52 navigator, earning the National Defense Service, Air Force Commendation and Combat Readiness medals.
Humphrey earned an MBA from Golden Gate University in San Francisco and a bachelor of science degree from Carson Newman University in Jefferson City, TN.
In addition to his CPA, he is a certified internal auditor (CIA), certified healthcare financial professional (CHFP), certified treasury professional (CTP), and a fellow of the Healthcare Financial Management Association (FHFMA). He served in the Air Force as an officer and B-52 navigator.
