After several years of anticipation as well as trepidation, the paradigm shift in health care from fee for service to value based has begun in earnest. On April 1 CMS kicked off the so-called "bundled payment initiative" for total knee or hip arthroplasty. The pilot program affects hundreds of hospitals which account for about a third of these procedures. The program sets a target payment based on the hospital's historic costs. Providers, including surgeons and post acute care providers, are payed on a fee for service basis. However, at the end of the year, if aggregate billings exceed the target, the hospital must REIMBURSE Medicare for the difference.
As I discussed in another recent post, this pilot madates hospitals and health care systems focus on integrating workflows across the full continuum of care, including the post acute space.
The total joint bundled payment initiative clearly incentivizes hospitals to reduce costs by decreasing length of stay (LOS) and reducing costly readmissions. Hoping to drive down the LOS in the pilot, in 2017, Medicare will waive the current rule requiring a three night acute hospital stay before transfer to a skilled nursing facility (SNF). Post surgical patients who need assistance with walking, live alone or lack sufficient assistance at home and require daily therapy are typically discharged to a SNF for a short term (1-2 weeks) stay focussing on rehabilitation. For patients with better mobility and a reasonable support system, an even more cost saving discharge is directly to home with home health care (HHC) services, particularly PT and nursing care as required. High quality post acute home nursing care and chronic disease management should reduce the risk of acute hospital readmission within the 90 day bundle time frame. It's likely that the best opportunity for hospitals and health care systems to achieve the savings required to beat CMS targets is in the post acute care arena.
Since Medicare will continue to pay surgeons and rehabilitation providers on a fee for service basis, hospitals with salaried physicians and ownership or strong affiiliation with rehabilitation facilites or HHC agencies would seen to be best positioned to control the cost of care along the entire spectrum from pre-admission through rehabilitation. However, all hospitals and health care systems will need coordinated, integrated workflows through the full continuum of care to manage resources, costs and ultimately, achieve the best outcome for the patient.
A cohesive electronic health record (EMR) built with clinically relevant workflows and caregiver friendly interfaces which spans the acute and post acute phases of care functions as the backbone of this emerging transition to value-based care. For joint replacement, acute care workflows addressing venous thromboembolism prophylaxis, management of medical comorbidity (e.g., diabetes), postoperative pain and acute physical and occupational therapy offer potential to shorten LOS and reduce unnecessary inappropriate costs. As LOS decreases, implementation of well designed clinical workflows in the post acute phase of care is particularly critical to optimizing patient outcomes while controlling costs. Post acute caregivers are under increasing pressure to document their work and demonstrate its effectiveness. Health IT needs to provide easy access to regularly updated evidence informed clinical decision support and user-friendly interfaces to facilitate documentation and track outcomes.
When I began clinical practice of rheumatology in the 1980s, the average length of hospital stay for knee or hip replacement was about two weeks. We are now down to about two days. The critical role of first rate home health care in this achievement cannot be underestimated.