As I helped Dad navigate his morning routine — bed to walker to bathroom to walker to the table in the extended kitchen he built with his own hands — the bathroom, admittedly an odd place for deep meaning to present itself, spoke to me. Modern cabinets and fixtures faded from my view as 50s-era linoleum and sinks reappeared and the shadowy figure of a very familiar-looking little boy appeared, perched on an antique training seat atop the toilet.

Shaking off the vision, I removed a soiled pair of the “special pants” we had to force on Dad last year and replaced them with clean ones. As I guided his halting footsteps toward the commode, the boy said, “He used to do the exact same thing for you in this very room.”

The realization transcended mere memories of the days when Dad was big and I was small. It was more important than that. Here I was, caring for my frail, incontinent father, not just in any bathroom but in sacred space, the same room where he had cared for me, given me baths, bandaged my knees and taught me to shave.

Dad does not often speak today and, this time, it was just as well. If he noticed the redness that was surely visible in my eyes, the redness that returns as I write this, he did not mention it.

Dad’s legs barely hold him up today, partly from age, partly from living 68 years with some kind of primitive cement-based compound that was inserted in his right shin in 1943 to replace a 4-inch piece of bone that had been shattered by a sniper’s tracer bullet. According to a hometown news report at the time, he had apparently run screaming and waving his arms down a Belgian hillside to draw the sniper from his nest, where the sniper was holding a company of G.I.s at bay. The small band of brothers did finally take the town; one small, forgotten component of the Allies’ victory at the Battle of the Bulge. “My buddy got the guy who shot me,” was the legend I grew up with.

His actual brothers once pointed out to me a three-story Pennsylvania house where they had lived, three-to-a-bed, during the Great Depression, apparently anxious to ensure I knew my heritage fell somewhere between courageous and nuts. “Your father used to do handstands on the top of that chimney,” they claimed. It was not fraternal joking; the story turned out to be true.

These are the kinds of memories that make tolerable the work of the family caregiver, a person continually aware, “This is a human being who, though approaching the end, was once young and self-sufficient, a breadwinner and parent, who coached Little League and met his life partner at a square dance, who was capable only a couple years ago of cradling his great-grandchild in his arms.”

Certainly, family caregivers work hard and grow weary, sometimes short-tempered. Yes, they often compromise their own health by putting someone else’s health needs first. Of course, they save the Medicare Trust Fund millions, perhaps billions, of dollars every year. I have written about these things with an air of “this is newsworthy” but, it turns out, they are secondary to the family caregiver experience.

What is primary is that ever-present awareness, “This shrinking body and slowing mind are not the full story of who this person is.” It would be a great gift if they could put across the full story to people who meet him at age 90 for the first time, people such as home health nurses, therapists and aides.

Family caregivers do not see a 90-pound 90-year-old, they see the soldier, the square dancer, the Little League coach. Whether dressing him or cleaning him or reminding him of his grandchildren’s names, there is no moment when the feats and legends of his youth are not vividly present, living not only in what is left of him but in the people who inhabited the house he built and made sacred by more than 60 years of memory-making.

Every time I walk him from the bathroom to the kitchen, I steal a look over my shoulder at the seemingly ordinary suburban bathroom. A little boy smiles up from his comic book at me and says, “Take good care of him. He’s my Daddy.”

Tim Rowan
December 7, 2011

To help cut through rumors and exaggerations, HCTR is going to take on a study of the Accountable Care Organization (ACO) concept that appeared in outline form in last year’s Patient Protection and Affordable Care Act (ACA). Where facts are available, we will pass them along. Where experts have paved the way before us, we will quote them, interview them, or let them write articles of their own.

This week, we begin with an analysis by longtime student of the way elected and unelected federal employees think, Jeff Lewis. We caught up with the founder and former owner of Lewis, Inc., a Baton Rouge-based home health care software company now a part of HealthCarefirst, to ask whether he is experiencing any degree of withdrawal eight months after leaving the industry that had been his life for over 25 years.

He says he has not returned to health care in any official manner, though he has had a few meetings with providers interested in bringing him on to help shape their future plans. But has not found the right role yet, which he says is no surprise because he sees the approach of a healthcare system that is very different from what we have today. If this paper is any indication then we have to agree.

Never one to mince words, Lewis told us when he offered to write the following article, “In the eight months since I left home care, I can’t say I have looked anyone in the eye who is going to be a part of the future of home care, based on what they tell me they are planning.”

A constant researcher, Lewis’ understanding of what has been presented so far from government and media sources seems to exceed that of many with whom we have spoken or whom we have listened to at conferences. Where specifics are still unknown, he clearly says so. Where well-established patterns from the past are likely to be repeated, he draws some conclusions as to how they will apply to this decade’s developments.

With this article as a starting point, we will hear from other experts in future issues and report on rules as CMS releases them. Your reactions to Lewis’ analysis of the new world of ACOs, and the things home care and hospice providers and their technology vendors can be doing now to prepare, are welcome.

Introduction – Where we are in February, 2011
There is always a danger writing about something that changes almost on a daily basis. Even when writing for an electronic publication, by the time you read this paper, the details extant on the day I took this snapshot may have changed. Some of the ideas on which I based my conclusions about Accountable Care Organizations and payment bundling may have been invalidated by published specifics.

Nevertheless, we cannot wait forever to at least begin exploring general ideas so that we can begin to get a handle on some of the likely implications to home health providers. With that in mind, the primary purpose of this paper will be to take a high level view, which means it will be only marginally dependent on the specifics that will come later when policies are published.

First Major Issue: Why Bundle Medicare Payments?
The concept of payment bundling has many benefits, certainly for CMS and, presumably, for patients as well. The primary cost benefit arises from having one party responsible for the entire cost of a medical episode, however that might be defined. Today, under fee-for-service Medicare home health, we effectively have an open checkbook business model. Truthfully, it is a model that is structurally expensive beyond what any responsible, cost-focused party would pay.

To limit its costs, CMS must reduce the number of units of service and/or reduce the cost of each service. Though we are currently on a downward slope of cost per service, there is an effective limit to how low CMS can take the current episodic payment without measurably negative consequences to both care quality and beneficiary accessibility.

Granted, with new rules designed specifically to limit the number of episodes, CMS is already attempting to force the number of home health units of service onto a downward slope. However, enforcing new as well as existing rules requires CMS to have the energy, desire and manpower to effectively control the services each patient receives.

Second Major Issue: Who Gets the Payment Bundle?
As I see it, there are four drivers that determine which care provider is the best party to be given responsibility for each payment bundle. For many care episodes, these drivers will conflict. In such cases, expect CMS to select a responsible party – we like to call them the “bundle party” – through compromise…or by flipping a coin.

• Core Provider – The bundled payment will likely go to the core provider for each individual medical episode. If an episode is based on a hospital stay, such as after a heart attack, the hospital is the core provider because all other providers would be in supporting roles to what the hospital has already provided.
• Highest Cost Party – The bundle party will be the highest cost provider. This will be the provider with the greatest opportunity to control and retain the highest cost portion of the bundle. To be clear, by highest cost I mean highest cost within each bundle, not the highest cost recorded using today’s open checkbook model. For example, in today’s world, it is not uncommon for a patient to generate $15,000 in home care expenses over the course of a year but perhaps only $10,000 for one or two brief hospital stays. Under a new era of cost-conscious management, the bundle party is likely to trim home care expenses to as low as $5,000, at which point the hospital receives the payment as the highest cost party.
• Least Replaceable Provider – The bundle party will be the least replaceable party in the bundle. Who wants to be responsible for a bundle payment if there is an irreplaceable party involved that is sapping the bundle because they are not motivated to contribute to containing expenses because it is ultimately not their loss? An example of a difficult to replace party might be the case of a cardiac issue driving the medical episode. Here a cardiac practice group should take on the bundle because they will develop and maintain the least replaceable connection to the patient’s medical issue.
• Least Controllable - The bundle party will be the least controllable party in the bundle. Who wants to have the least controllable, and likely the most out of control, highest expense driver, sapping the bundle when it is not their own money being squandered? Who would want to own the bundle for a patient, inside an inpatient rehab facility (IRF) for example, who has an undetermined prognosis? The rehab facility itself might be the best ACO for that patient, possibly calling on home health to supplement its services after discharge and through the end of the medical episode.

If we apply these four drivers to many post-acute patients in today’s typical home care census, only the hospital is left to accept the ACO role. Even if another provider wanted to go to the mat against the local health care gorilla, patient by patient, the hospital can always claim it has an advantage because it will be working with its own people to contain total costs and produce good outcomes, an argument that will always keep it in Medicare’s good graces.

I say “many” instead of “all” or even “most” because there will be cases where the hospital is not the best choice. In the case of outpatient procedures, for one example, a surgery center or clinic would often be a reasonable alternative to allowing the hospital to control payment. An orthopedic practice might be the ideal fit for knee and hip replacement patients. The same situation applies to other specialties such as optical. For their patients they are the core provider as well as the highest cost, least replaceable and least controllable provider in the bundle.

There is even hope for home care providers to act as ACO on occasion because, for some community patients in today’s home care census, the home health agency could conceivably fill all four of our factors. Before getting too excited, however, consider that, when push comes to shove and revenue is involved, non-home care ACOs can be expected to target these patients as well.

Issue #3: There Will Be Winners and Losers
Most home health agencies will be losers. I offer four strong reasons for this admittedly sad conclusion.

1. Demand is going to fall. Many current patients will not be assigned to home care by the bundle party; overall number of visits will decrease.
2. Revenue is going to fall. As demand decreases and especially as bidding and price negotiation take hold, revenue will fall. Financially weaker, less efficient organizations will not survive.
3. Profit is going to fall. The current aggregate Medicare home health margin will not be tolerated by actual businesses.
4. Competition is going to soar. Until the shakeout has run its course and supply and demand rebalance, there will be a period of unsustainable pricing as desperation for patients leads some agencies to submit unrealistic bids until they have to close their doors.

Some will lose right away
Considering these four reasons, look for three categories of home health agencies to join the ranks of losers very quickly under bundling.

• Agencies whose revenue stream has been dependent on long term patients will take a hard, early hit. Providers controlling the bundle will immediately impose more rational business practices.
• Agencies with poor quality outcomes will suffer as the whole concept of quality changes under a bundled payment system. Quality providers will be redefined as those who contribute to the quality of the whole medical episode. Quality of the home care component alone will become irrelevant. While trying not to sound too preachy, this is a systemic evolution whose time is way overdue.
• Agencies that are brain dead will become losers. Even though today they may be reporting excellent revenue, thanks primarily to brilliant marketing, these often larger agencies who have worked out a formula for success will find that today’s formulae are specific to today’s system. They will have little benefit when dealing with ACOs.

The Winners
While winners are harder to predict, I believe it is possible to identify core components that will be found within all winners.

Winners will be truly innovative home health agencies. It will be a whole new world, and an absolute footrace, during the opening quarters. Skills, techniques, strategies and tactics will each undergo rapid development once the game starts. This is going to be such a giant change and with such a huge range of competitive challenges, winners can only be agencies that figure it out again and again and again.

Winners will be the technologically connected agencies. I cannot imagine an ACO without its own medical record system, nor one that will not require all participating providers to subscribe to that system. How else can the ACO keep itself abreast, moment-by-moment, what is going on with its patients? And how else can it utilize its own data to improve its financial and medical success?

Winners will be the technologically controllable home health agencies. You may have the most brilliant computerized assessments and decision system in all of home care but you must not also believe that will be your key to success. Within 24 months, I cannot imagine any ACO, especially a hospital, placing value on what your proprietary home health software wizardry brings to the table. They will pat you on the head and teach you how to download their care plans and their decision trees from their systems for use with their patients.

They may be justified in doing this to you. Take unique patient blood pressure guidelines as an example. Not all blood pressures cause the same alarms with all patients. Patients are different in so many ways that one-size-fits-most will not be good enough when the ACO learns what works, at a higher level of specificity and based on more information than you have ever hoped to factor into your care and planning, for a specific patient.

This topic is worthy of a whole paper of its own. For the moment, suffice it to say that ACOs will expect you to store their patient data in their systems, not the other way around.

Specialists will likely be among the winners. Some patients are going to be riskier and some will require very specialized care. Specialists dedicated to their target patients will have higher value to the bundles. It might take a few financial burnouts for an ACO to realize the value of using specialists but red ink quickly creates motivation to find a better solution. Home care agencies able to deliver a solution could be ready-made winners.

All else being equal, providers who are first to build expertise will have the highest chance of surviving the first cut. This early expertise will be built on innovation, technology and ability to offer ACOs the clinical and process control they are certain to demand, all while delivering lower cost medical episodes with acceptable outcomes of all measures.

Issue #4: Home Care’s New Role
For certain types of patients, home care will almost always be a part of the bundle team, ether as a leader or a follower. While it may not be common today, home care will almost always share medical records with other bundle members, either as the owner or subscriber.

Unlike the effective isolation of its current role, home care’s new role will be in context with the entire train of medical services, past, present and future. It will be all about adding value to the medical episode through low cost and high quality.

New Home Care Model
Home care will no longer be on its own with occasional interaction with other parties. Home care will be a plug-in.

I like the plug-in metaphor because of the image of a self-contained unit that fits into a designed position. The learned-through-experience requirements of how the plug-in works as part of a larger provider machine will evolve into a system where a large number of home care providers are positioned to offer themselves to a large number of ACOs.

With this model, each ACO can access different providers simultaneously to serve different patients with specific needs. This model also allows an ACO to access different providers as their own needs change over time, as their needs vary among patients, and as local home care providers’ offerings improve over time.

If you are an ACO and a home care provider proposes that they can improve upon services you have been contracting from another provider, you are free to plug them into a few medical episodes to see whether they can deliver. Under this model the barriers to the ACO accessing a better home care value are very low. Efficiency, effectiveness, cost improvement and outcomes can remain on a perpetual improvement track.

Home care will plug into a larger care plan, join a larger care team and thus gain a larger care perspective. As a plug-in provider, however, home care will be replaceable during a patient’s care cycle, especially during stable periods. Except for when home care acts as the ACO, home care will be viewed as “on the team” rather than “having the patient.”

New clinical implications
Reducing ACH will no longer be an absolute demand for hospital-based ACOs. Planned ACH will be expected if it lowers total cost and patient risk. Keep in mind that a returning patient inside a bundle period will not be a new admission. Gone will be all of the administrative cost of an additional admission and discharge. If a hospital is the best place for a patient at a certain moment then that is where they go, without hesitation, as there is no associated loss.

With more appropriate cost allocation, hospital ACOs will likely have no reason to have their bundle patients avoid short stays. Expect to see a completely new calculation than today’s fully loaded ACH cost and admittance commitment calculation. Some of today’s needless hospitalizations for things like administering Lasix might sometimes be viewed as best practice under bundling. We just cannot know until we start doing it and someone runs the new calculation to find out.

Caution: Pity the agency that is not always aware of every patient’s whereabouts and condition. While your bundle patients might not be “yours” in the sense they are your Medicare patients today, once home care takes the ball it should expect to be held accountable until it hands the ball off to someone else, giving them complete control. No fumbles. No stumbles.

Another major clinical implication is that software will have to have plug-in clinical support. Your current software might have the most advanced clinical support on the planet, but it will be up to the ACO to decide how they want each patient handled. And maybe they don’t care about your assessment at all, insisting rather that you execute their assessment that supports their medical record, which in turn supports their clinical management tools.

Along with plug-in clinical support will come plug-in decision thresholds. One-size-fits-all is out the window. “Sure her blood pressure is high. It’s always high. Call us only when it reaches the levels we set in her chart. And if you miss when her blood sugar reaches the level we also set in her chart, you’re fired!”

Issue #5: The Need for Hospital Agencies

Reasons against
One possibility is that hospital ACOs will all have their own home care agencies and have no need for other agencies. The problem is that binding, exclusive relationships between an ACO and one specific agency denies access to best current practices.

And it denies access to the best current prices.

Basically, it is hard to really squeeze one of your own. Decisions about outsiders can be as cold-blooded as the situation calls for. And when push comes to shove, as CMS tries to drain the profit out of bundling, it might become very cold-blooded very quickly. The need to access the best home care services during a period of high innovation will require the ability to shift without regard for who is left behind. So why have your own agency when its cost will likely be higher and its innovation lower?

Reasons For
The primary reason for a hospital ACO to have its own home health agency is that this agency will likely be the first that the ACO can trust to perform as demanded. They will also likely be the first agency able to share a medical record for technical, legal, and policy reasons.

Another factor to consider is that they will likely be the first party able to navigate channels within the hospital for access to important information about the patient.

Issue #6: Getting the Business
Relationships will likely win new business on day one but only performance will matter by day 90.

At some point the process of being the home health plug-in for individual patients could be based on bidding. While that is a scary thought for a home health provider, using an approved bidder system could result in the best long term success of the ACO.
Bid selection could be based on cost and recent performance.

I expect the ACO payment to be based on a mixed formula of DRG and something like the PPS grouper. The ACO could simply send that formula information to their approved bidding home care providers and accept the lowest bid for that particular medical episode. At that point the chosen home care provider would be on the hook to provide all services the ACO has included in the contract.

There would be no need to require a specific number of visits, type of clinician, minimum time per visit, etc. Taking care of the patient will be all that matters and adding requirements like the above will only increase costs that must be factored into bids. “Take care of the patient in these ways and be as innovative as you can be to make your bid, and our cost, as low as possible, all while delivering the outcomes we demand.”

Bidding brokers
Depending on how complex the bidding process becomes, brokers could appear who would handle bidding for agencies and provide critical feedback or consulting to increase bid success. As I have modeled the brokering process, it appears quite likely that hosting software vendors might be best positioned to become brokers.

Issue #7: The New Role of Software
Having the wrong software or incompatible software will likely be a deal killer sooner rather than later.

Subscribing to a medical record will be a requirement. For agencies with their own ACO, hosting a medical record will be a requirement.

Software vendors who host the servers or processing for their clients, including web-based products, might have an advantage in executing the complex feeds and interactions with outside medical records and patient thresholds. If my experience as a software company owner is a good measure, connecting systems will be a frustrating process for you and for your software vendor. But it comes with the job and it is what vendors do.

If any national attempts to develop a standard medical record can succeed in time, software vendors will then be able to focus on supporting innovations developed by providers. Otherwise a large portion of the effort by software vendors will be spent trying to build their own walls and pierce the walls of others. Proprietary medical records could be one of the largest barriers to fully utilizing and appreciating home care as an industry.

Conclusions: How to Prepare Now
Be the best you can be right now. We know nothing about when bundling might actually start and how long it might take to encompass a majority of Medicare patients. PPS was “right around the corner” when I entered home health in 1985 but did not arrive for another 15 years. Today’s Medicare financial crisis will not allow the ACO transformation to wait 15 years. One the other hand there is an unimaginable amount of work ahead for CMS and its contractors to get it started.

• Understand that your current relationships might not survive to see day one. When things get tight, it can all come down to numbers. Friendships thrive in times of plenty; cold business decisions take over when times are tough. Bundling does not promise to be a time of plenty.
• Start seeing your patients as though you were the ACO for each patient. While you cannot change your practices today in any significant way, try to do some modeling and see what you learn.
• See the bundle from the ACO point of view. How long would you keep home health for your patients? What other service areas would you access if total cost and success was your responsibility?
• Start imagining your agency without the current Medicare home health restraints because the ACO patients are not going to be under the Medicare home health benefit. Where are the bundle-likely, non-homebound patients who could benefit from home care?
• Keep thinking about all of this but be sure to read all of the published and coming studies on potential roles for home care. Some really smart folks are working on this. And equally smart folks are working on it from the hospital point of view, the SNF point of view, the IRF point of view, etc. If home care really provides the value we have promoted, then these folks will be factoring home care into their potential roles too.
• As in the run-up to any major change, cash will be king. Cut costs and preserve cash. The transition will require clear thinking which can be difficult with severe red ink.
• For many home health providers this might be a good time to plan the best exit from Medicare. All of your current patients are not going to suddenly disappear; rather their allocation of your services will likely be severely constrained. With that new constraint it is hard for me to imagine retaining anywhere near our current number of providers. Yes, we have been here before. Reality strikes hard. This is not a time for numeric delusion or denial.

In closing, the need for home care is not going away, regardless of how the government pays for it. I liken home care to the National Guard, which is effectively an army of trained medical professionals. Though located coast to coast, they need no desk or brick and mortar to do their job. That job could be almost anything this country needs a medical army to do. Highly intelligent, highly experienced, and on wheels. What’s not to love?

For a presentation of some of the big picture implications of bundling, see what the Long Term Care community is saying:

http://www.dobsondavanzo.com/clientuploads/Dobson%20Long-Term%20Care%202011%20Policy%20Seminar%202.9.11%20FINAL.pdf

This was the message delivered to a standing-room-only audience during the annual Southwest Regional home health care conference, “Catching the Dream of Home Care,” held last week in Albuquerque. The presenter, Scott Flowers, is a project director for EQ Health Solutions, the Medicare QIO for Louisiana. His topic, “Care Transitions Community Collaborative: Working Together Across Care Settings,” described how 3-year pilot projects in 14 states have already begun to have a dramatic effect on rehospitalization rates. (see sidebar)

The cost to Medicare of hospital readmissions within 30 days of discharge is staggering, Flowers said. Nationally, 17.6% of Medicare beneficiaries are re-hospitalized with 30 days. The Medicare Payment Advisory Commission (MedPAC) believes that up to 76% of those readmissions may be preventable, representing a potential annual savings to Medicare of over $12 billion.

Home care’s message to hospitals should be to point out that, of Medicare beneficiaries who are readmitted with 30 days, nearly two-thirds, 64%, receive no post-acute care between discharge and readmission. For those who do receive some form of post-acute care, Flowers reported, readmission rates have been seen to drop as low as 5.3%.

Editor’s note: It is important to point out that the well-publicized 29% national average acute care hospitalization (ACH) rate for home care, which ranges from lows in the teens in some states to highs of nearly 40% in other states, cannot be compared to the 17.6% rate that Mr. Flowers uses. There are two reasons. One, home care’s rate is based on PPS payment episodes and considers, therefore, returns that occur during a full 60 days instead of 30. Second, it measures all hospital admissions, not merely re-hospitalizations that follow a recent discharge.

Understanding the cause

Flowers holds both MHA and MBA degrees and is a “Lean Six Sigma Black Belt.” He approaches the project strategically, starting with an analysis of rehospitalization’s drivers:

• Data fragmentation
• Inappropriate end-of-life care
• Medication issues
• At-risk patients not properly identified at discharge
• Lack of post-discharge follow-up
• Lack of disease-specific protocols
• Lack of patient self-management
• Lack of community awareness

Multiple re-admissions have been found to be a smaller but nevertheless costly problem, Flowers reported in Albuquerque. Of those re-admitted within 30 days, 20% return more than once. 15% have two re-admissions; 3% return three times and 2% are re-admitted four or more times.

During the 3-year, federally funded pilot, grantees in the fourteen states (see list at right) will focus on patients with three diagnoses: heart attack survivors (AMI), Congestive Heart Failure (CHF) and pneumonia. Flowers found that Louisiana’s recidivism rate for all three conditions is 19.05%, with CHF patients having the highest average, 27.79% and pneumonia the lowest at 18.92%. AMI is in the middle at 23.74%.

Using a combination of techniques, including coordinating with post-acute care services and training nurses as health coaches, EQ Health Solutions is targeting five Baton Rouge area hospitals. Though it is too early to report meaningful results, Flowers said he and his colleagues expect to show significant progress at the project’s two evaluation points, at 18 and 24 months, approximately September, 2010 and March, 2012.

Preliminary results, which Flowers emphasized do not yet lend themselves to extrapolation, show that EQ has accepted about one-fourth of referred patients into their program, 188 of 714. They do not accept patients from managed care plans, who live outside the study area or who are discharged to nursing homes. Within that group, 30-day re-admissions are at 5.3% after nine months, which brings the region’s overall rate down from 18.68% to 17.51%

EQ’s detailed approach

To further reduce re-admissions for the three selected diagnoses, — plus COPD, which was added to the CMS list at EQ’s discretion — in the project’s five targeted hospitals, Flowers explained, the Louisiana QIO has selected tools matching the above-listed re-admission drivers:

• Medication management
• Plan of Care
• Post-discharge follow-up
• Bridging nurse support with “Transition Coaching”
• Clinical protocols
• Information transfer
• Community engagement and education
• Early identification of high-risk patients

“Transition Coaching” is the lynchpin

According to Flowers’ definition, Transition Coaching is carried out by nurses but does not involve care, nor does it interfere with any care services the patient might have following discharge. Using a model developed by Dr. Eric Coleman, of the University of Colorado Health Sciences Center, Transition Coaching focuses on “empowering the patient with the tools they need to navigate the healthcare system after discharge.”

Patient-centered tools include medication reconciliation, discharge plan of care, making follow-up appointments and recognizing red flags. Flowers emphasized that the nurse-coach never makes the follow-up appointment — and, in fact, does not do anything the patient can be taught to do for him/herself — but talks the patient through the process, encouraging them to take reminder notes along the way. “Transition Coaching reinforces the discharge plan of care established by the treatment team,” he elaborated. “It does not do for the patient.”

“The coach visits the patient in the hospital and completes a first coaching session at the time of discharge,” Flowers continued. “Subsequent telephone contacts occur on post-discharge days 2, 7, 14, 21, 30 and 45. Each session focuses on the post discharge plan of care, medications, post discharge follow-up and red flags.”

Bringing home care on board

Asked whether home health care providers might have a place in EQ’s program, Flowers stated that many home care agency personnel have already attended Transition Coaching training. Several of these have added coaching as a complementary service to standard skilled nursing. Agencies are using EQ-provided tools such as medication reconciliation forms, a handout explaining red flags for re-hospitalization and a patient personal health record. “Coaching services are not billable,” Flowers clarified. “Agencies cover them within their PPS reimbursement.”

He made sure to point out, however, that there is a financial benefit to deploying health coaches, not only to the hospital but potentially to the home care agency as well. The first way to analyze a less obvious benefit such as this is to consider patient census.

Currently, 25% of hospital patients are discharged to home care and 1% to hospice but fully 44% go home with no follow-up care services. One question Flowers hopes his company’s demonstration project will answer is whether increasing the percent of discharges to home health and hospice will reduce a hospital’s re-admission rate.

“Reducing acute care hospitalization rates does not cost, it pays,” he believes, supporting his assertion with Lousiana figures. “At an average RN hourly wage of $30.32, and an estimated three hours spent managing transfer and resumption of care (ROC) reporting, hospital re-admissions cost Lousiana home care providers $2,735,803 every year. Perhaps not all of this amount is avoidable but, according to findings revealed in a recent, 35-state ACH record review, only 56% are appropriate. 44% of all acute care hospitalizations were judged to be avoidable. Eliminate inappropriate hospitalizations and Louisiana home care agencies save $1,203,765.”

Scott Flowers concluded his presentation with the suggestion that home care agencies use his formula to calculate their own potential savings. “Do not forget to add to that total whatever additional revenue you can forecast after you convince hospital discharge planners to further reduce their re-admission rates by increasing the percentage of patients they discharge to home health care.”

For a home health care provider’s sales and marketing department, the implications are significant. There is no point telling the hospital they should use your services because you will help them shorten their average length of stay. Instead concentrate on promoting your ability to keep patients from returning. For administrators, make sure you can perform according to your marketing staff’s promises.

These findings have been around since published in 2000 by P.A. Taheri, D.A. Butz and L.J. Greenfield of the University of Michigan Health System, Division of Trauma Burn and Emergency Surgery. Because of possible mis-information about how home care saves costs to payers, it is worth reviewing their findings. We have reprinted here an executive summary. The complete report is available online. Go to http://www.journalacs.org/inpress and search on the author’s names.

BACKGROUND
Hospital cost containment, cost reduction, and alternative care delivery systems continue to preoccupy health care providers, payers, employers, and policy makers throughout the United States. The universal metric for gauging the success of these efforts is hospital length of stay (LOS). Reducing the LOS purportedly yields large cost savings. The purpose of this study is to assess precisely how much hospitals save by shortening LOS.

STUDY DESIGN
We reviewed the cost-accounting records of all surviving patients (n = 12,365) discharged from our academic medical center during fiscal year 1998 with LOS of 4 days or more. Actual costs were identified through the University of Michigan cost-accounting system. Individual patient costs were broken out on a daily basis and then decomposed further into variable direct, fixed direct, and indirect categories. The population was analyzed by determining the incremental resource cost of the last full day of stay versus the total cost for the entire stay. The data were also stratified by LOS and by surgical costs. An analysis of all trauma patients was then performed on all patients discharged from the hospital’s adult level I trauma center (n = 665). Costs were determined on specific days, including admission day, each ICU day, day of discharge from the ICU, and each of the last 2 days before the discharge day.

RESULTS:
The incremental costs incurred by patients on their last full day of hospital stay were $420 per day on average, or just 2.4% of the $17,734 mean total cost of stay for all 12,365 patients. Mean end-of-stay costs represented only a slightly higher percentage of total costs when LOS was short (e.g., 6.8% for patients with LOS of 4 days). Even when the data were stratified to focus on patients without major operations, the $432 average last-day variable direct cost was only 3.4% of the $12,631 average total cost of care. A focus on the trauma center helps to explain this phenomenon. For our trauma center, variable direct costs accounted for 42% of the mean total cost per patient of $22,067. The remaining 58% was hospital overhead (fixed and indirect costs). The median variable direct cost on the first day of admission is $1,246, and the median variable direct cost on discharge is $304. Approximately 40% of the variable costs are incurred during the first 3 days of admission.

CONCLUSIONS
For most patients, the costs directly attributable to the last day of a hospital stay are an economically insignificant component of total costs. Reducing LOS by as much as 1 full day reduces the total cost of care on average by 3% or less. Going forward, physicians and administrators must deemphasize LOS and focus instead on process changes that better use capacity and alter care delivery during the early stages of admission, when resource consumption is most intense.

Strategic use of modern technologies and a willingness to update agency policies can help lower a home care provider’s rehospitalization rates. This is the conclusion of a new report, “Homeward Bound: Nine Patient-Centered Program Cut Readmissions,” published by the California HealthCare Foundation.

Though coming from a California-based organization, the report offers nine examples drawn from hospitalization reduction efforts across the country. HCTR received permission from CHCF to bring readers two of the report’s nine stories with direct relevance to home care. This week, we go to Denver. Next week, New York City.

Colorado Foundation for Medical Care (CFMC) is the Medicare Quality Improvement Organization (QIO) for Colorado. It convened representatives from three North Denver providers — St. Anthony’s Central Hospital, clinicians from its Senior Clinic, and Centura Home Health Agency — for a CMS demonstration project that ended in December 2008.

The senior clinic, which is based at St. Anthony’s Hospital and cares for frail elderly people, is part of an IPA, managed by the medical services management company, Physician Health Partners. The target population for the North Denver pilot was all of the Senior Clinics hospitalized patients with Medicare coverage, both fee for service and managed care.

The roll-out and planning process for the pilot took about six months, and the care transitions intervention itself lasted another six months.CFMC recruited St. Anthony’s Hospital as its closest partner, and together they recruited Centura Home Health Agency. CFMC provided the setting where the team could collaborate on planning and implementing the Coleman Care Transitions Intervention. The team included the head hospitalist, SNFists,* geriatricians, discharge planners, IT support and medical services management company representatives.

Dr. Jane Brock, chief medical officer for CFMC, said the Colorado QIO played a critical role in “structuring the implementation framework” and providing technical assistance. She believes that in a fragmented healthcare environment, someone — preferably a neutral entity — needs to play this role, to help disparate providers come together to build community and develop workable approaches to care transitions.

The North Denver participants were enthusiastic about the chance to problem-solve together, she reported. “The most productive thing we did was to create a time and place for providers to come and talk to each other about what they know. We had the idea, provided a little bit of facilitation and coffee, and they really did the work.”

The team members met regularly to work on common processes for streamlining and standardizing communication, information-sharing and transfer of medical responsibility. They focused initially on process mapping to improve and standardize the discharge process. To reinforce this collaboration, CFMC facilitated site-exchange visits between hospital emergency department nurses and nursing homes, and home visits for discharge planners.

In keeping with the Coleman Care Transitions Intervention (CTI), the North Denver partners collaborated to create and fund two nurse transition coach positions to carry out the intervention — a nurse case manager from the hospital, and a nurse from the home health agency (funded by the hospital system).

Preparing the patient for a post-hospital outpatient appointment is one of the four pillars of the CTI model. However, North Denver Geriatrician Dr. Thomas Cain noted the critical PCP hand-off can be “lost in the CTI model” without a way for hospital providers to coordinate with the outpatient physician.

To address this, the project brought providers together to develop reliable processes and communications strategies for safe transfer of medical responsibility, including prompt transfer of needed information. They agreed to use text messaging from the hospital to notify the PCP of a patient’s discharge. Dr. Cain observed that texting is less disruptive than a telephone call but more visible than a fax or e-mail. As of June 2009, a few hospitalists and outpatient physicians were testing the approach. To ensure that patients can see their physicians within a day or two of discharge, St. Anthony’s Senior Clinic builds time for same-day appointments into its schedule.

Within six months, this pilot project made a measurable difference in readmission rates. Thirty days after discharge, 13% of coached patients had been readmitted, compared with 20% of uncoached patients. Even more striking, at 60 days, coached patients were half as likely to be readmitted as the uncoached ones.

Looking Ahead

The success of the North Denver project led CMS in August 2008 to launch a three-year “Care Transitions Theme,” across 14 QIOs, which are responsible for bringing multiple local providers together to work on improving care transitions — much as CFMC did for the North Denver pilot. CMS selected CFMC as the QIO support contractor (QIOSC) for the 14 states. Thirteen, including North Denver, chose to use the Coleman Care Transitions Intervention model.

A second hospital has joined the North Denver project. Its steering committee includes providers from several settings, a large employer, an and-of-life facilitator and a Medicaid representative.†

The new project is open to all Medicare fee-for-service beneficiaries in specified zip codes who meet project criteria. The group hopes to prioritize patients with both a chronic disease requiring daily self-management (primarily heart failure, COPD, or diabetes) and a mental health diagnosis such as depression. Coordinators chose this target group because while local readmission rates for heart failure patients are lower than average due to effective post-hospital care, local data show that persons with both a mental health diagnosis and a serious chronic disease have significantly higher readmission rates.

The expectation is that coaching will have a large impact for such patients, giving them needed support for the tasks involved in maintaining their health after discharge. The project is testing the training of social work interns and community leaders, most of them seniors, as transition coaches.

The expanded implementation will begin with targeting patients on telemetry units within each hospital. The group believes that localizing the intervention to a specific unit will help set a standard protocol for involving coaches in discharge planning that can be more easily expanded as participants become familiar and comfortable with the intervention.

*SNFists serve a role in a skilled nursing facility comparable to that of hospitalists in a hospital.

†Colorado Foundation for Medical Care, Care Transitions — NW Denver Community, www.cfmc.org/providers/providers_pcc.htm.

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Do you have a program that is helping to limit re-hospitalizations? We want to hear from you.

We would like to hear about it. This is the place to tell your stories about a home care patient’s return to the hospital, especially one that you were powerless to prevent.

I have heard stories about patients being hospitalized for reasons that were completely beyond the control of their home care provider, sometimes completely unnecessary. But the provider is dinged for it anyway.

I want to hear these stories, publish them, use them to increase the industry’s insight and awareness and help everyone out. Naturally, we need you to leave out your name and everything that might identify your patient. Address your story to tim@homecareful.com.

In coming issues, we will expand on this service to include other stories. The more the experience shocked you, the more helpful it will be to tell it to the entire industry.

• Have you had medications stolen from your patients?
• Have you had patients neglected?
• Have you had family members do insane things?
• Have you had physicians who wanted to increase hospital census?
• Have you had physicians ignore your warnings?
• Have you had hospitals discharge inappropriate patients?

All of these things, and worse, are happening to patients every day. We need your help to compile a list of the ways in which others make it difficult for you to do what you do best, care for patients.

CMS and government planners might not get around to your neck of the woods very often. Sometimes it seems as though the only way they know what you do is through cold, raw numbers. By cataloging the hospitalization reasons you experience every day, perhaps someone in Washington or Baltimore will understand your world better as they calculate your outcomes.

The door to the Homecareful website is open. Use it! Tell Tim about a few of your hospitalizations that were going to happen no matter what you did. We are all in this together.