Recently, a director of case management at a large urban for-profit hospital said to me: “Managing post-acute providers is like Quantum Mechanics. In Quantum Mechanics there is a principle called the Observer Effect.” He went on to explain that when scientists measure small particles, just the act of observing these particles changes their behavior. After using the Cortex Platform for a year to evaluate post-acute providers in real-time, he felt their performance had changed simply because it was observed in real-time. Specifically, post-acute providers were collaborating on the harder edge cases in readmission risk—at points of transition and after discharge.
Reducing readmissions has become a group effort, with penalties impacting many stakeholders directly and indirectly in the post-acute continuum. For fiscal year 2018, Kaiser Health News has estimated that CMS will withhold $564 million in payments to hospitals under the Hospital Readmissions Reduction Program (HRRP). CMS is currently withholding 2% of Medicare payments to skilled nursing facilities and starting in October 2018 will give increased reimbursement rates to top readmission prevention performers while keeping 30%-50% as a savings to Medicare. Accountable Care Organizations participating in Advanced Tracks 2 and 3 are eligible for bonuses or penalties, based in large part around performance in preventing readmissions.
High-risk Medicare patients are a challenging group to identify because so many different factors exist that can influence risk, including which post-acute providers are caring for patients after discharge. Referral decisions are often made by case management and discharge planning personnel who lack the tools and data to choose the best providers. Some are relying on self-submitted data from post-acute providers.
How to Compete with Other Healthcare Providers
As a former nursing home administrator, I spent countless hours preparing graphs and charts of outcomes and readmissions performance to share with local hospitals and payers. I often worried that I would calculate my rate different from other providers in my region also seeking to be part of these preferred networks. Candidly, this process was cumbersome and felt awkwardly punitive.
Forming preferred networks among post-acute providers has become a go-to strategy for payers, hospitals, and even the post-acute providers themselves. Sometimes these are formal ACOs, but often these networks are more informal post-acute collaborations. Administrators of these networks need tools to measure members and evaluate their performance in real-time.
Additionally, the tools need to standardize how performance metrics are calculated before making membership decisions. For example, the readmission rate of each post-acute provider should be calculated in the same way.
More importantly, in addition to reporting metrics on the negative outcomes of post-acute partners, collecting and comparing positive outcomes can be constructive.
Critical Success Metrics Use Case
In Salt Lake City, UT, one hospital has forged ahead in creating a preferred post-acute network based on outcomes reported in the Cortex Platform. Later this year, this hospital plans to narrow its list of “preferred” post-acute providers, a list shared with patients at the time of discharge. In addition to creating a preferred network for patient referrals, the hospital will be able to explain why specific members were chosen as preferred. To get to this point, the hospital spent 12 months gathering real-time data, watching trends, and managing outcome performance. Yes, the hospital tracks readmission rates in real-time. But just as important, many of the metrics are more positive:
- Average Length of Stay
- Satisfaction Rate
- Average Stay Cost (SNF only)
- Days to First Visit (Home Health only)
- Post-discharge Physician Follow-Up
- Prevented Readmissions
Even before narrowing to a preferred network, preliminary estimates show that this hospital has seen a reduction in readmissions by 10-15% compared to the previous fiscal year. Imagine their results next year when patients avoid discharge to facilities that are not providing the best outcomes.
Although previously a nursing home administrator, I am now co-founder at Cortex and lead our Product Strategy and Security. The hospital in the case above utilized the Cortex Platform to track these performance metrics in real-time, along with providing a central hub for case managing more complex cases. Cortex is the CRM for healthcare networks.
As we have learned from the Observer Effect, and put more succinctly by Peter Drucker: “You can't manage what you can't measure". Self-submitted spreadsheets are not a viable long-term measurement strategy for readmission performance. Gathering performance metrics in real-time on network members is the best way to ensure that patients are being referred to the locations where outcomes are more likely to be positive.