Transitioning to Value-Based Hospital Medicine

Marking an important inflection point in its evolution, in 2014, Sound Physicians decided to focus its clinical strategy on success under value‐based payment models. These efforts started with CMS’s BPCI program.  Sound sought to mitigate margin pressures on its core fee-for-service model with ancillary revenue.  The organization also aimed to broaden its value proposition for its hospital partners.  

Transitioning to value‐based care presents unique challenges for any health system. For Sound, a major challenge was motivating hospitals to take ownership of the total cost of care around admissions for acute medical illness, including after discharge. A second challenge was developing care models and enabling technology that could scale nationally across hospitals with heterogeneous practice environments.  

Sound’s clinical team embarked on a transformation strategy to reduce spending on post-acute care and readmissions, which vary widely across hospitals and account for over half of total episode spending.  It also focused on ensuring that intensity of care aligned with patient preferences and improving end of life care.  

To strengthen physician alignment and engagement, Sound disseminated scientific evidence about the clinical benefits associated with avoiding overuse of post-acute care facilities and aligning care with patient preferences, and how best to achieve those goals.  Financial incentives related to quality and value based care were also implemented.

While continuing to encourage local innovation, Sound developed a standardized care model for implementation at all hospitals which were based on published best practices and its own experience.  Key clinical expectations included:

• Identification of patients for special focus, including those in VBC risk programs, at high readmission risk, or at clinical equipoise between going home and a SNF
• Structured, reimbursable advance care planning in all 65+ and high-risk patients
• 2-week home health protocols that are structured, frontloaded, and tailored to needs of individual patient
• Selective referral to high-quality network among patients requiring skilled nursing facility (SNF) or home health care following discharge
• Hospitalists see potential readmissions early in emergency department evaluations

Sound invested heavily in three technology platforms to drive success with its value‐based care model. Sound adapted SoundConnect, its proprietary IT platform, to flag BPCI and other risk program patients, provide clinical checklists based on patient diagnosis and risk, collect required quality indicator data, and identify PAC facilities in Sound’s network. Sound’s analytic platform, SoundMetrix, incorporates administrative, clinical, and claims data and then provides instantaneous, risk‐adjusted, benchmarked performance feedback to physician leaders and clinicians to ensure accountability with quality and cost metrics. And finally, Sound telemedicine allows hospitalists to extend their influence beyond hospital discharge and into Skilled Nursing Facilities (SNFs). So far, readmissions in the SNF population fell from 23 to 15 percent in the first year of the SNF telemedicine pilot at 12 different sites. Plans for home‐based telemedicine in high risk patients are also underway.

Sound’s performance in value-based care was slow to improve in the early years of BPCI, but utilization and spending for post-acute care began to diverge significantly from national trends starting in 2017.  By 2020, total spending for 90-day episodes around acute medical admissions had fallen by almost $1500 per patient.

Adjusted for clinical bundle mix, the proportion of BPCI patients spending time in SNFs fell substantially over this time period, from approximately 30% to 25%. Use of LTACHs fell from 1.8% to 1.1% and SNF length of stay declined by 1.3 days per stay. Conversely, the use of inpatient rehabilitation facilities remained relatively flat over the four-year span. This may be indicative of the large number of Sound hospitals with hospital-owned IRFs, which are particularly common in the southern United States.

Sound also struggled to reduce 90-day readmission rates during this time period, which may reflect trends toward increasing acuity of inpatients nationwide. (Sound’s overall case mix index has been increasing approximately 1% annually.) Finally, the use of advance care planning services (defined by physician evaluation and management claims) increased substantially, from less than 2% of patients in 2016 to almost 20% in 2019.

Sound’s clinical success in value‐based care has significantly influenced its business success. It has strengthened Sound Physicians’ value proposition for hospital partners by ensuring their competitiveness in a value‐based payment environment. It has also accelerated Sound’s participation in health system ACOs (now over 60) and enabled new, national value‐based reimbursement contracts with large commercial payers. Finally, and most importantly, it has positioned Sound for success with the alternative payment models of the future.
 

As Chief Clinical Officer, Dr. Birkmeyer is responsible for clinical performance across the organization and helping hospital partners succeed under value-based payment models.


 

Dr. Robert Bessler founded Sound Physicians in 2001. As Sound’s chief executive officer, he ensures the organization seamlessly partners with hospitals, community providers, and payers to drive meaningful performance improvements while maintaining quality of care and patient satisfaction throughout the 90-day acute care episode.
 

Sound Physicians is a leading healthcare organization with a reputation of improving quality, satisfaction, and financial performance for partners nationwide. Sound combines a high-performance model with engaged clinicians to drive reproducible results across the acute episode of care through emergency medicine, hospital medicine, critical care, anesthesia, telemedicine, and physician advisory services.