Let skilled-nurs­ing providers take risk in bun­dled-pay­ment demon­stra­tion

Modern Healthcare - - COMMENT - By Mark Parkin­son

We face a Medi­care cri­sis. Mil­lions of baby boomers are reach­ing an age where they de­pend on the pro­gram to meet their health­care needs.

At the same time, the gov­ern­ment is still strug­gling to con­trol health­care costs. This isn’t a new prob­lem, but it is one that we must ap­proach strate­gi­cally and united as an industry if we in­tend to find a so­lu­tion.

There has been a re­cent pal­pa­ble change in the way our lead­ers are now ap­proach­ing this is­sue. HHS Sec­re­tary Sylvia Mathews Bur­well and her team at the depart­ment set goals this year that re­flect a new mind­set and are spot on: We must make the shift from financial in­cen­tives for more ser­vices to pay­ments that re­ward high-qual­ity out­comes. And while it is en­cour­ag­ing to see en­su­ing poli­cies that are re­flec­tive of this ap­proach, there are ar­eas of con­cern.

Con­sider the re­cently pro­posed rule from the CMS to mea­sure the ef­fec­tive­ness—in a demon­stra­tion—of bundling pay­ments for joint re­place­ments in pa­tients’ hips and knees. The pro­posal makes sense in that it rightly rec­og­nizes that putting providers at financial risk and cre­at­ing in­cen­tives for lower costs and bet­ter out­comes will work. The de­fect in the pol­icy is that it al­lows only hos­pi­tals to take on the risk.

A bet­ter pol­icy would be to not only test a rule with hos­pi­tals at risk, but also al­low skilled-nurs­ing fa­cil­i­ties to take on the risk by eval­u­at­ing a post-acute bun­dle. For the bet­ter part of 30 years now, skilled-nurs­ing providers have been pre­par­ing for a time such as this— adapt­ing and in­no­vat­ing to meet the chang­ing needs of older Amer­i­cans. Three fac­tors af­firm the tim­ing is right for this:

The cost sav­ings po­ten­tial in Medi­care is on the post-acute side, not with hospi­tal stays. A 2013 In­sti­tute of Medicine study ex­am­in­ing the cause of vari­a­tion in Medi­care spend­ing found that 73% was in post-acute­care ser­vices. Un­der the cur­rent pro­posed rule, the acute providers are re­spon­si­ble for and at financial risk for the en­tire cost of the episode. In re­al­ity, their abil­ity to re­duce costs is lim­ited. A post-acute bun­dle, man­aged by ex­perts in posta­cute care, of­fers the best chance to de­liver cost sav­ings.

Skilled-nurs­ing providers are ready and will­ing to take on this task. To­day’s skilled-nurs­ing fa­cil­i­ties have changed sig­nif­i­cantly, be­com­ing places where peo­ple go to get well and re­turn home. They now treat more than 2.3 mil­lion res­i­dents each year on a short-stay ba­sis. Th­ese are peo­ple who have been in the hospi­tal, need some re­ha­bil­i­ta­tion, get it at the skilled-nurs­ing fa­cil­ity and then go home. The fa­cil­i­ties have a proven track record of suc­cess in this area, some­thing HHS should take ad­van­tage of. The fa­cil­i­ties also have stepped up in the cur­rent HHS vol­un­tary bundling pro­gram. Of the 1,906 providers in the pro­gram, more than half (56%) are within skilled nurs­ing. Th­ese are providers who are em­brac­ing bun­dled care and have vol­un­tar­ily stepped up to be a part­ner with HHS. They should not be shut out of manda­tory bun­dles.

The CMS should use mul­ti­ple demon­stra­tion projects to de­ter­mine the best pos­si­ble pol­icy. A demon­stra­tion pro­gram is meant to test mul­ti­ple mod­els and de­ter­mine which is most ef­fec­tive. In this vein, there are mul­ti­ple ac­count­able care or­ga­ni­za­tion mod­els as well as mul­ti­ple bundling mod­els.

So how does it make sense to test only one manda­tory bun­dle? It doesn’t. No one idea alone should be a part of the demon­stra­tion. It makes the most sense—and would pro­vide bet­ter ef­fec­tive­ness out­comes—to test both an acute and post-acute bun­dle. The CMS is un­likely to achieve the best re­sults with­out test­ing all plau­si­ble ap­proaches.

We have an op­por­tu­nity. That op­por­tu­nity is to de­liver high-qual­ity care to Amer­ica’s aging pop­u­la­tion while re­duc­ing costs through proven, ef­fec­tive spend­ing pro­grams. I’m op­ti­mistic that we can have a last­ing im­pact on the way we as providers de­liver health­care if we ap­pro­pri­ately im­ple­ment the smart changes be­ing con­sid­ered in Wash­ing­ton.

‘We have an op­por­tu­nity … to de­liver high-qual­ity care to Amer­ica’s aging pop­u­la­tion while re­duc­ing costs through proven, ef­fec­tive spend­ing pro­grams.’

Mark Parkin­son is pres­i­dent and CEO of the Amer­i­can Health Care As­so­ci­a­tion and the Na­tional Cen­ter for As­sisted Liv­ing.

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