OSF HealthCare returns to its home care roots with PACE

OSF HealthCare is rethinking care for older adults nearly 150 years after the health system set down roots in Peoria, Illinois.

The nonprofit Catholic health system launched a Program of All-Inclusive Care for the Elderly program July 1, making it one of the latest health systems to offer the Centers for Medicare and Medicaid Services' program. OSF HealthCare's efforts provide a window into the benefits and pitfalls other health systems, such as Kaiser Permanente, could experience when establishing similar programs.

Related: Will growing pains hamper PACE?

PACE is a decades-old program that offers home- and center-based care to eligible people 55 and older. Participants qualify for skilled nursing care, but can still live in their communities.

There are more than 170 PACE organizations across 33 states that provide home care, prescription drugs, meals and transportation to participants. Enrollees can also go to approximately 300 neighborhood PACE centers for adult day services, recreation, medical care, dental care and laboratory services. PACE operators get paid fixed rates from Medicare and Medicaid to cover each participant and assume full risk for each patient.

Health systems are increasingly getting involved with PACE. Geisinger, Baptist Health and Ascension operate PACE programs in Pennsylvania, Arkansas and Michigan respectively. In March, Kaiser Permanente announced a joint venture with Town Hall Ventures to open two PACE programs in California next year. The Oakland, California-based integrated health system plans to launch PACE in various markets through partnerships with other health systems in the future.

About 70 new PACE programs are being developed by for-profit and nonprofit providers, and are expected to open within the next three years, said Robert Greenwood, senior vice president of communications and member engagement at the National PACE Association.

OSF HealthCare was one of five organizations, and the only health system, to receive a PACE contract from the Illinois Department of Healthcare and Family Services when it allowed providers to begin offering PACE this year. The other contracts went to smaller healthcare providers and a national for-profit PACE operator.

Launching PACE was a logical move for OSF St. Francis Medical Center, its flagship hospital in Peoria, said Nathan Pritzker, executive director for OSF PACE. As the largest health system in central Illinois, OSF has access to thousands of potential participants. It also owns 15 other hospitals throughout Illinois and Michigan that could potentially launch PACE programs in the future.

Pritzker said the closure of some skilled nursing facilities in central Illinois, combined with the region’s aging demographics, presented OSF with an ideal opportunity to keep older patients in their homes and bring care to them, just as the Sisters of the Third Order of St. Francis did nearly 150 years ago when they started providing care to those in Peoria and founded the hospital.

“We have always recognized that care is better in the home and the community,” Pritzker said. “When there is continuity of care that isn’t reactive, but proactive, patients do better.”

OSF HealthCare had advantages to tap into when starting a PACE program. The health system had existing assets it could tap to help reduce PACE startup costs that can run from $5 million to $15 million, according to Pritzker. It renovated a 10,000 square-foot adult day center in the heart of downtown Peoria to also serve as the PACE center. OSF reconfigured rooms for a laboratory, pharmacy, examinations and therapy.

OSF also owns a home health unit that it leverages for in-home care, as well as physician groups to provide primary and specialty care to participants. It has contracts with outside providers, such as dentists and ophthalmologists, for other services.

Still, Pritzker cautioned that setting up PACE isn't cheap or easy. Some PACE organizations have to build centers from the ground up, which can be expensive and delay the program’s launch. Others may also have to partner with health systems or hospitals to provide certain healthcare services to patients.

While OSF HealthCare's assets helped it quickly open a PACE program, Pritzker said there have been a few areas of turbulence while ramping it up. Only six patients are enrolled in the program so far; all were recruited from OSF’s adult day program. Pritzker said some people have resisted taking part in the program because they are unfamiliar with it. That attitude is likely to change over the next several months as the health system increases marketing and awareness of the program, he said.

Coordinating transportation has been another hurdle for OSF, as well as for some other PACE organizations.

OSF had to have buses available to transport patients when it launched the program, even though it only had a small number of participants. The health system owns three buses to carry participants to the center from their homes across three counties. Drivers also take them from the center to dental and eye appointments. Patients are coming to the center and leaving at different times, which requires careful coordination, said Clinical Director Tricia Silver. She thinks logistics could become even more complex as OSF adds new participants and additional buses.

Pritzker said the biggest challenge could be recalibrating the way OSF and PACE staff think about caring for these patients. Because the health system takes on full risk for participants, it is responsible for their health and well-being 24 hours a day, seven days a week. Pritzker said that reality hit home in late July when a series of tornadoes blew through central Illinois.

“A tornado might not have worried us previously, but that is a real worry for us now,” Pritzker said. “If there is a power outage and someone can’t get air conditioning or heat or running water, it’s ours to think through and come up with a solution. That is a different approach to healthcare.”

Pritzker said OSF also had to adapt to different state and federal regulations for PACE.

Greenwood said the three way-partnership beween providers, states and CMS is complex and can contribute to a lengthy application process. He said operating as a healthcare provider and a health plan can also be difficult for some PACE operators.

Pritzker said OSF HealthCare will take a “go-slow” approach to PACE as it expands, making sure staff gain a better understanding of the needs of participants and experience coordinating services. He expects program enrollment will reach up to 130 patients in about 18 months and turn a profit.

“I think PACE is one of the tools that healthcare systems are going to gravitate toward to deliver care in a sustainable, appropriate and attractive way for an aging population that really wants to remain in their home,” Pritzker said.