New pay models mean hospitals need stellar post-acute networks to thrive

When St. Luke's University Health Network assumed a new level of financial risk for 84 services under Medicare's voluntary bundled-payment program, the system's leaders knew they needed to whittle down the list of preferred post-acute providers to improve outcomes and reduce costs.

By analyzing data and working with skilled-nursing facilities to improve their processes, the seven-hospital system based in Bethlehem, Pa., drastically cut the number of days its patients spent in the facilities, as well as how frequently they needed to be hospitalized again when they left.

“Data analysis was really key to our success, and having data on the performance of post-acute providers was extremely eye-opening,” said Donna Sabol, St. Luke's chief quality officer. “It was very evident that patients who were in managed-care products had half the length of stay in (skilled-nursing facilities) compared to those that were Medicare fee-for-service,” she said. Medicare fee-for-service plans have broad networks, while managed-care plans typically direct patients to specific providers.

To create a high-performing post-acute care network, St. Luke's turned to the providers with whom it already had a strong relationship. It then collected performance data from nursing facilities to promote competition, informing them that they could be removed from the preferred list if they don't perform well enough. The system also went a few steps further to train, educate and build care protocols and transition-of-care processes for those providers. It even embedded its own physicians in the nursing facilities to better teach them protocols and held quarterly meetings with their administrative teams to talk progress.

Charlotte, N.C.-based Premier, a group purchasing and healthcare performance improvement company, highlighted St. Luke's strategies and results in a guide intended to help other hospitals get a handle on the wide variation in cost and quality of care across post-acute providers. Having a strong post-acute network can help hospitals earn bonuses and avoid penalties under bundles and other emerging payment models.

For high-risk patients, St. Luke's physicians phoned skilled-nursing facilities to touch base once a patient was discharged. Skilled-nursing facilities then did the same with primary-care physicians after patients left their care.

By the second quarter of 2016, St. Luke's had narrowed its preferred post-acute care network to nine providers from 16 in 2014. The results have been dramatic, Sabol said.

In 2014, the average length of stay for Medicare fee-for-service patients in the bundles was about 36 to 40 days. As of the second quarter of 2016, stays averaged 14 to 19 days at the nine preferred skilled-nursing facilities. Moreover, St. Luke's significantly reduced the number of skilled-nursing patients readmitted to the hospital within 90 days of discharge. It was anywhere from 34% to 45% in 2014 and had declined to 21% in the second quarter of 2016, Sabol said.

Hospitals historically have had little to do with the post-acute care that follows a patient's hospital stay, leaving physical therapy and dietary counseling up to the skilled-nursing facilities and home health organizations that take over once a patient is discharged.

But Medicare's new value-based payment initiatives—such as the readmissions reduction program and bundled payments—require hospitals to manage care for months after discharge.

“It's a very, very diverse array of providers that encompass the post-acute space,” said Andy Edeburn, principal with Premier's population health advisory services. “Because these sites manage such different patient types, it's a challenge for hospitals or health system leaders to really know which of these are appropriate” to engage and how to start.

It may take some heavy lifting. St. Luke's, for example, hired a program manager for bundled-payment programs along with transition-of-care specialists and other clinicians to help train post-acute care providers. It also opened up the electronic health records to the skilled-nursing facilities so they could easily access patient records. These measures can be costly, but they're also increasingly necessary.