Think­ing about grow­ing Kin­dred’s pri­mary-care doc ca­pa­bil­ity

Modern Healthcare - - Q & A -

Ben Breier is pres­i­dent and chief op­er­at­ing of­fi­cer of Kin­dred Health­care, a post-acute-care provider that re­ported $4.9 bil­lion in rev­enue in 2013. The Louisville, Ky.-based company op­er­ates tran­si­tional-care hos­pi­tals, nurs­ing and re­ha­bil­i­ta­tion cen­ters, and as­sisted-liv­ing cen­ters, with more than 2,300 lo­ca­tions. This month, Kin­dred for­mal­ized a $720 mil­lion deal to ac­quire Gen­tiva Health Ser­vices, a home health and hospice provider. Breier, who has served as COO since 2010 and pres­i­dent since 2012, pre­vi­ously served as pres­i­dent of Kin­dred’s hos­pi­tal and re­ha­bil­i­ta­tion di­vi­sions. Be­fore that he was an ex­ec­u­tive at Con­cen­tra and Premier Prac­tice Man­age­ment. Mod­ern Health­care re­porter Beth Kutscher spoke with Breier about the company’s plans to build its care-co­or­di­na­tion business, pre­pare for value-based pay­ments and eval­u­ate other part­ner­ships. This is an edited tran­script.

Mod­ern Health­care: What’s go­ing on in the post-acute-care in­dus­try, and how does the ad­di­tion of Gen­tiva help you re­spond to those trends?

Ben Breier: There have been a lot of pres­sures over the last cou­ple years for all parts of the post-acute-care in­dus­try. We have this mas­sive gray­ing of Amer­ica. Peo­ple are liv­ing longer and in many cases have mul­ti­ple chronic dis­eases. All of us have to fig­ure out how we can man­age this grow­ing pop­u­la­tion in a cost­ef­fec­tive, value-en­hanc­ing and con­sumer-driven way.

Kin­dred has gone through this in­cred­i­ble trans­for­ma­tion from a very siloed, in­sti­tu­tional-based set­ting to the point, with the com­bi­na­tion with Gen­tiva, where over 50% of our rev­enue is go­ing to come from non-in­pa­tient set­tings. We think a company that has broad na­tional scale and a plat­form of support-cen­tered in­fra­struc­ture, in­clud­ing deep lo­cal mar­ket pen­e­tra­tion, can be a provider of choice for hos­pi­tals, in­sur­ers and con­sumers.

MH: How will Kin­dred’s care co­or­di­na­tion work in prac­tice?

Breier: We have de­vel­oped this strat­egy at Kin­dred called Con­tinue the Care. It’s a three-step process. In the 25 or 30 in­te­grated mar­kets that we’ve des­ig­nated, we have de­vel­oped a full con­tin­uum of post-acute care. That may be a cou­ple of tran­si­tional-care hos­pi­tals, a cou­ple of sub­a­cute fa­cil­i­ties, and a cou­ple of in­pa­tient re­hab fa­cil­i­ties, home health, hospice, wrapped in with re­hab-care providers.

The sec­ond com­po­nent is we want to pro­vide care-man­age­ment ser­vices. That’s a pa­tient-care ad­vo­cate who is help­ing to move a pa­tient through­out the en­tire episode of care, mak­ing sure the pa­tient is mov­ing into the right part of the de­liv­ery sys­tem and that we’re man­ag­ing their med­i­ca­tions. Third, we want to test and im­ple­ment pay-for-value pay­ment mod­els.

In a num­ber of mar­kets we serve to­day, such as Cleve­land, In­di­anapo­lis, Bos­ton, Las Ve­gas, Dal­las, Hous­ton, Phoenix, Seat­tle and North­ern Cal­i­for­nia, we now have de­ployed the full suite of ser­vices. We have de­ployed the care-tran­si­tion pro­gram, and we are work­ing with pay­ers and con­sumers to move pa­tients through our sys­tem in a more ef­fec­tive man­ner. That is lead­ing us to the third piece of test­ing new pay­ment method­olo­gies. We are par­tic­i­pat­ing in the CMS’ bun­dled-pay­ment project in Cleve­land. We are tak­ing risk to­day with pay­ers in ways that in post-acute we never have done be­fore.

MH: What per­cent­age of your rev­enue is com­ing from th­ese value-based con­tracts?

Breier: It’s still un­der 5%, but we see that grow­ing ex­po­nen­tially over the next five years.

MH: Can a post-acute-care provider as­sume full risk on its own or do you need to part­ner with a pri­mary-care or acute­care provider?

Breier: Do­ing things on your own is be­com­ing tougher and tougher. The U.S. sys­tem can­not af­ford to have every­body try and be ev­ery­thing to every­body. We think hav­ing part­ners who un­der­stand the niche they’re sup­posed to play is ul­ti­mately go­ing to be the most suc­cess­ful. That said, you need to have a co­or­di­nated ef­fort. Physi­cian in­put on care uti­liza­tion is go­ing to be the most im­por­tant part of the strat­egy. If you don’t have

the physi­cians in­te­grated and aligned in their in­cen­tives, none of this will come to pass.

Once you have the doc­tors on the pri­mary-care side, you need both an acute and a post-acute set of ser­vices and you need that to be co­or­di­nated so peo­ple are talk­ing to each other.

MH: As you build this care-co­or­di­na­tion and pay­ment-for-value strat­egy, are there other business lines that you need to be in?

Breier: We’re in six now, and each has its own com­plex­i­ties. When you take those six and you try to co­or­di­nate it and get them talk­ing to each other, that is the next level of com­plex­ity.

We don’t want to be ev­ery­thing to every­body. We have the hu­mil­ity to know that it’s re­ally hard to run th­ese busi­nesses. Hav­ing more of a pres­ence in the physi­cian side, par­tic­u­larly the pri­ma­rycare side, is prob­a­bly where we will con­tinue to think about grow­ing. We like the as­sisted-liv­ing space a lot, but I’m not sure that you’ll see us do any­thing there in a mean­ing­ful way. For the most part, we now have ev­ery­thing else on the posta­cute side un­der our roof with the com­bi­na­tion with Gen­tiva.

MH: What are your plans for the Sil­ver State Medi­care ACO?

Breier: We did the trans­ac­tion this past spring. It’s the first time we have taken an own­er­ship po­si­tion in an ACO. This is a physi­cian-driven ACO that cov­ers about 12,000 Medi­care lives, and we think that’s go­ing to grow sig­nif­i­cantly. We’ve got about 180 pri­mary-care physi­cians in the net­work to­day, and th­ese are mostly in­de­pen­dent physi­cians in the Las Ve­gas mar­ket.

We’re learn­ing a lot about how to man­age an ACO, cre­ate trans­parency around where pa­tients are and where they need to go, man­age data and make sure physi­cians feel en­abled to man­age pa­tients more ef­fec­tively. This a pi­lot for us as we think about ex­pand­ing our ACO foot­print across the coun­try. The ini­tial re­ac­tion from physi­cians and the ini­tial data we are gen­er­at­ing on man­ag­ing care more ef­fec­tively has been very com­pelling.

MH: Has the Oba­macare Med­i­caid ex­pan­sion made a dif­fer­ence for Kin­dred in terms of pa­tient vol­ume and pay­ment?

Breier: Much of what we saw in the sec­ond quar­ter con­tin­ues into the third quar­ter in terms of the con­tin­ued shift in our own mix into the Med­i­caid pop­u­la­tion. A lot of the Med­i­caid in­creases we are see­ing are com­ing from those states that are ei­ther far along in im­ple­ment­ing their Med­i­caid-Medi­care dual-el­i­gi­ble pro­gram or that have ex­panded Med­i­caid to low-in­come adults. As I said in my earn­ings call last quar­ter, at our short-term acute hos­pi­tals you see the self-pay­ing pa­tient num­bers go­ing pre­cip­i­tously down as they are re­placed with Med­i­caid pa­tients. A lot of those pa­tients who are now pay­ing pa­tients are en­ter­ing the post-acute world. That has cre­ated rel­a­tive strength in vol­umes in our year-overyear vol­ume growth.

MH: Does whether or not a state has ex­panded Med­i­caid in­flu­ence your business strat­egy in terms of which states you want to be in?

Breier: It could, but it hasn’t yet.

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