Five Take­aways

How To Win Un­der Bun­dled Pay­ments

Modern Healthcare - - THE WEEK AHEAD -

More and more hos­pi­tals are en­gag­ing in value-based models that put them at fi­nan­cial risk for poor out­comes or ex­cess costs, and re­ward them for ef­fec­tive and ef­fi­cient care. But do they have strate­gies in place to help them limit and man­age ex­cess costs?

Dr. Don­ald Fry, ex­ec­u­tive vice pres­i­dent for clin­i­cal out­comes man­age­ment at MPA Clin­i­cal So­lu­tions, pre­sented his rec­om­men­da­tions on how hos­pi­tals can pre­pare for these un­knowns dur­ing a webinar on April 18. The en­tire webinar can be ac­cessed at ModernHealth­care.com/Bun­dledPay­ments.

1 In­tel­li­gent bun­dles in­her­ently link qual­ity and cost

Strong bun­dled pay­ment pro­grams re­ward ef­fi­ciency and pe­nal­ize over-utiliza­tion of re­sources by set­ting a bud­get. Providers who don’t use their re­sources op­ti­mally un­der these pro­grams are pun­ished with ad­verse out­comes that lead to ex­cess costs and smaller mar­gins. “If you bring cases in with ad­verse out­come rates that are less than what the model would iden­tify, you have in­creased mar­gins, and if you un­der­uti­lize re­sources and have in­creased ad­verse out­comes as a con­se­quence, the pay­ment model will pun­ish you. It is a prospec­tively risk ad­justed bud­get,” Fry said.

2 De­ter­mine the risks that come with your pa­tient pop­u­la­tion

Each pa­tient is in­trin­si­cally dif­fer­ent, and some pa­tient char­ac­ter­is­tics that in­flu­ence out­comes are be­yond the con­trol of providers. Even if a pa­tient may not in­cur any com­pli­ca­tions dur­ing their stay, their treat­ment costs may be higher than av­er­age if they pre­sented with a highly se­vere case. Bun­dle bud­gets should ac­count a wide range of case sever­ity, build­ing po­ten­tially higher costs into the sur­gi­cal war­ranty.

3 Pre­pare for bumps in the road with a sur­gi­cal war­ranty

Providers and pay­ers must build a sur­gi­cal “war­ranty” into their to­tal prospec­tive pay­ment that an­tic­i­pates a cer­tain rate of ad­verse out­comes and the cost that comes with them. This pro­vides a fi­nan­cial cush­ion for the hos­pi­tal and guards against “cherry pick­ing” of pa­tients be­cause it pro­vides a strong re­ward for high-qual­ity care of a high-risk pa­tient. The war­ranty must ac­count for any­thing that could be re­spon­si­ble for ex­cess costs, in­clud­ing the costs and con­se­quences of death, pro­longed length of stay and post-dis­charge deaths, among other pos­si­bil­i­ties.

4 Know your out­comes

Hos­pi­tals and sur­geons need to know their per­for­mance and how it bench­marks with their coun­ter­parts across the na­tion. Providers should get a grip on pain man­age­ment is­sues, in­fec­tion rates and co­mor­bidi­ties that can lead to ad­verse out­comes. Pa­tients with high-risk co­mor­bidi­ties could in­cur com­pli­ca­tions that need to be ad­dressed in post-dis­charge fol­lowup and man­age­ment. “Not pay­ing at­ten­tion to those de­tails could have pro­found and se­ri­ous eco­nomic reper­cus­sions,” Fry said.

5 Iden­tify post-dis­charge stake­hold­ers so that you can col­lab­o­rate on care

Physi­cians and hos­pi­tals must work to­gether to re­solve post-dis­charge com­pli­ca­tions be­fore they re­quire read­mis­sion. Over half of pa­tients read­mit­ted within 30 days didn’t see a physi­cian after dis­charge, per MPA data. Evolv­ing models are likely to ex­tend the read­mis­sions met­ric to 90 days after dis­charge, Fry said, as over 40% of ad­mis­sions oc­cur in days 31 to 90. Providers need to be aware of their post-dis­charge out­comes if they in­tend to en­gage in bun­dled pay­ments.

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