The Medicare Payment Advisory Commission (MedPAC) recently published a presentation titled Evaluating an episode-based payment system for post-acute care that explains the committee’s thinking about a bundled payment model for post-acute care. Soon after, Becker’s highlighted 5 key points from the presentation.
We spoke with Bruce Greenstein to get his insight on the post-acute care landscape and, more specifically, the potential value of bundling post-acute care services. Greenstein is the Executive Vice President and Chief Strategy & Innovation Officer at LHC Group, as well as the former Chief Technology Officer of the US Department of Health & Human Services.
*Quotes lightly edited for clarity
General thoughts on where post-acute care is today and where it’s headed:
This area is one of the last frontiers as an unmanaged and unstructured part of our nation’s healthcare system. We spend a large portion of our overall healthcare expenditures in the post-acute side, but it’s generally uncoordinated. It’s not dis-coordinated, but it’s not well coordinated. The pain mechanisms come from different parts of the healthcare system. On the Medicare side there are multiple and siloed methods of care. And the idea is that we have the opportunity and mechanisms today to start to align those to get better outcomes, better patient satisfaction and family satisfaction and lower overall costs.
On which organizations in the commercial space are making progress in the arenas of complex care and post-acute care:
[It has been] happening lightly in the commercial space as evidenced by companies […] like CareMore and Landmark and Aspire. […] I like what Humana is doing in this space, and even next-gen ACOs and regular ACOs are starting to make some progress as well. On top of that, there’s been a lot of activity for hospital in the home.
On whether the industry would support bundling in post-acute care:
We look forward to having a bundle because we know how it's driven efficiencies within other bundles today. Click To Tweet
When we as an industry have talked to MedPAC, they were maybe [thinking] we wouldn’t be supportive of a bundle. And we are exactly the other way around at the LHC group. We look forward to having a bundle because we know how it’s driven efficiencies within other bundles today. Whether it’s for outpatient surgical procedures, [it’s] pushing more of the procedures into the outpatient world. […] And we think that if we look at home health or we look at post-acute care in general, there’ll be more activity that happens in the home rather than in more costly institutions [while] delivering better outcomes.
On the potential value of bundling in post-acute care:
A post-acute bundle gives the provider the ability to deploy other services that are not typically included in home health, but will overall bring the cost of the post-acute episode down. Click To Tweet
And so what we see, validated by studies, is that there are many patients that end up going to a skilled nursing facility [at] let’s say $500 a day. Average length of stay is 27.07 days in 2016. So these are quite long stayers and a substantial cost. One study that is referenced often by Tom Scully is that 50% of the patients that go into the SNF [skilled nursing facility] are clinically appropriate to be treated in the home.
What are some of the reasons why people that are clinically appropriate for the home go into a SNF? It’s not just that people have an inclination for spending more money, but there’s often the soft side of healthcare that they have to be addressed. Maybe there’s meals, transportation, it could be a home assessment and preparing the home. Maybe to do something with fall prevention within the home. Maybe there’s personal care services that need to be delivered. Something that has to do with say, transferring, toileting, bathing. That is done for you in the SNF but it’s not part of the home health benefit. This is where a post-acute bundle gives the provider the ability to deploy other services that are not typically included in home health, but will overall bring the cost of the post-acute episode down.
On the clinical outcomes:
[There’s] a study that just came out in JAMA Internal Medicine about the need to realign health system processes for getting patients discharged from the hospital home. And it talks about having very similar outcomes on hospital readmissions. [The] SNF has a little bit better rate for readmissions, but the overall cost difference is quite large between going home and going to the SNF. They did this on something like 17 million discharges, this was a very broad study. And so their conclusion to me is that we need to create better mechanisms that bring people home instead of the institution.
We know that if we look at surgical bundles, a total joint replacement, we know that some of the big shifts have been moving these procedures from the inpatient environment to outpatient environment. That alone has saved a lot of money.
We know as home health providers that these conveners have been rigorous with their deployment of home health. If [the patients] don’t need it, they don’t get it. And the number of days spent in a facility have been cut substantially in these bundles as well. [Assuming that] clinical outcomes are the same, we’ve taken costs out of the system.
On incentives and unintended consequences in post-acute care:
Providers might lose some money on some patients and save some money on other patients, but they're designing clinical workflows that are to provide high quality outcomes. And with that they should be able to save money overall. Click To Tweet
So what’s interesting is people would say, oh, the NHS in the UK is so different than the healthcare system in the United States and there’d be nothing to learn. But I was in Manchester the year before last. I did learn about their system of post-acute and longterm care. And the barriers that they have to overcome is getting their social care sector – those that work in the home – to work with their hospitals, those that are still in the facilities and their [general practitioners]. We don’t have a dissimilar problem. It’s the alignment of financial incentives and clinical incentives. Today we have a situation where, when the hospital is ready to discharge a patient, by and large there’s no incentive to choose, or to educate the patient to choose, a cost effective [and clinically appropriate] next step. Whether it’s in a skilled nursing facility or an inpatient rehab facility or in the home.
What’s interesting is there’s always a concern about either gatekeeping or withholding care to maximize profit. And that’s been the case since the 1980s. But let me rephrase what the concerns are as documented by MedPAC in a report earlier this month. Their concern in the post-acute space was that if you create these bundles, and this is even on a site-specific basis, that there will be an inclination by providers to essentially cherry pick. In other words, to get the patients that are the least acute and therefore could be cared for with the least amount of resources or discharge patients early and not really have the same clinical outcomes because they’re not getting paid for any more care.
And that is a concern for everything all over. If you think about ways that Medicare tries to address certain incentives, we have hospital readmission penalties to hospitals because they are under a DRG [diagnosis related group] and if they discharge their patients too quickly and they keep coming back, there is some penalty to pay for having poor outcomes. In this case, if there’s not the ability to cherry pick, you can imagine this in the hospital sector. What if you can just choose to do a DRG or not do a DRG? You would take the easiest patients and put them in a DRG and the most complex ones you would do it per diem. And that would not be a good bargain for the Medicare trust fund, or taxpayers.
I would do a demo regionally. In a demo environment, we would expect to see that there’s not a choice where a provider gets to decide whether or not they want to put you in a bundle or keep you in fee for service. There should be a way that creates integrity in the system and creates the mechanisms for a convener or provider of the post-acute bundle to essentially think about the whole population as a group. They might lose some money on some patients and save some money on other patients, but they’re designing clinical workflows that are to provide high quality outcomes. And with that they should be able to save money overall.