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IMPACT Act, VBP, Care Coordination and the SNF Landscape

Now into February, its time to take stock of the Post-Acute/SNF landscape, particularly as the same pertains to the evolutionary policy initiatives in-play and moving forward.  To start, there is little evidence on the horizon of an all-out retreat on the policy changes begat by the ACA.  While some framework is building to “Repeal and Replace” the ACA/Obamacare, the same will leave fundamentally intact, the changes started and wrought by Bundled Payments, Value-Based Purchasing, and the IMPACT Act.  The Republican majority, a smattering of Democrats, and the incoming Secretary of HHS have signaled support for these initiatives.  Should a Repeal strategy move forward any time soon, these elements, skeletal perhaps or whole in-flesh, will likely remain.

Reviewing thematically, these policy initiatives are centered on an intentional focal shift from episodic, fee-for-service payments to payments based upon performance.  Performance in each element is tied to cost and quality.  The objective is to create better outcomes (quality) in a more efficient manner.  Because these things are government policy, they are clunky – less than simple.  In some cases such as with Value Based Purchasing and readmission measures, the methodology is so cumbersome and disjointed (some diagnoses are OK, some are not) that a layman, even one well-educated, could have a hard time qualifying and quantifying an appropriate readmission (by diagnoses, by risk, etc.).

Below is a quick review of the current policy initiatives and what they mean for 2017 for SNFs.

IMPACT Act: The purpose of the Act is to create standardized reporting of quality measures and cost measures across the post-acute domain (HHAs, SNFs, LTCaH, IRF).  The objectives are to reduce avoidable readmissions to acute care settings and to create standardized, comparable quality measures to identify federal policy improvements and payment consistencies.  CMS of course, uses more floral language regarding the objectives and intent.  Ultimately, the translation of the standardized data allows CMS to target regulatory changes and payment initiatives that reward provider performance and streamline (a bit oxymoronic for government) payment systems (rate equalization models).  Below are the pertinent domains under the IMPACT Act

Quality Measures

  • Skin integrity and changes in skin integrity
  • Functional status, cognitive function, and changes in function and cognitive function
  • Medication reconciliation
  • Incidence of major falls
  • Transfer of health information and care preferences when an individual transitions

Resource Use and Other Measures

  • Resource use measures, including total estimated Medicare spending per beneficiary
  • Discharge to community
  • All-condition risk-adjusted potentially preventable hospital readmissions rates

Assessments

  • Functional status
  • Cognitive function and mental status
  • Special services, treatments, and interventions
  • Medical conditions and co-morbidities
  • Impairments
  • Other categories required by the Secretary

As is common in current health policy, reimbursement policy and other policy interweaves with laws such as the IMPACT Act.  Value Based Purchasing and  Quality Reporting for SNFs, integrates quality measure reporting and results along with readmission performance with incentives or penalties imputed via Medicare reimbursement for 2018.  Beginning in October of 2016, SNFs began to submit QRP (Quality Reporting) data via the MDS.  The first data collection period concluded on 12/31/16.  The Quality Measures reported and applicable under the IMPACT Act (cross setting measures) are:

  • Part A stays with one or more falls with major injury (fracture, joint dislocation, concussion, etc.)
  • Percent of residents with new or worsened pressure injuries
  • Percent of Long-Term Care Hospital patients with an Admission and Discharge Functional Assessment and a Care Plan that addresses function

The Claims Measures are:

  • Discharge to community
  • Potential preventable, 30 day post SNF discharge, readmission to hospital events
  • SNF Medicare spending per beneficiary

The Quality Measures are the elements that impute, based on performance, a reimbursement penalty in 2018 up to 2% of Medicare payments via a reduction in the SNFs reimbursement (rate) update.

Value Based Purchasing (VBP): SNFs are a tad late to this party as other providers such as hospitals, physicians and home health agencies already have reporting and measurement elements impacting their reimbursement.  Hospitals for example, have DRG specific readmission penalties (penalties applicable to common admitting diagnoses).  For HHAs, a nine state demonstration project is under way linking a series of measures (process, outcomes, claims) from the OASIS with customer satisfaction from the HHCAHPS to reimbursement via an accumulation tied to a Total Performance Score.  The measurement years (data gathered) beget payment changes (plus or minus) in outlying years – 2016 data nets payment adjustments in 2018.  The payment graduation increases over time (2018 = 3%, 2022 = 8%).

For SNFs, the VBP measure is 30 day, all cause, unplanned readmissions to a hospital. The measurement reflects a 30 day window that begins at the point of SNF admission from a hospital.  The 30 day window of measurement spans place of care meaning that the patient need not reside in the SNF for this measurement to still have an impact.  For example, a patient admitted to an SNF, subsequently discharged after 14 days to a HHA and then  readmitted to the hospital on day 22 (post hospital discharge) is considered a “readmission” for SNF VBP purposes.  CMS has offered guidance here regarding diagnoses that are excluded from the readmission measure.  Readers that wish this additional information can contact me via my email (on the Author page of this site) or via a comment to this post.  In either case, please provide a valid email that I can use to forward the information.

To avoid getting too technical in this post, a quick summary of how VBP will work is below (readers with greater interest can contact me as provided above for a copy of a Client Alert our/my firm produced last fall on VBP).

  • A SNFs readmission rate is calculated in separate calendar year periods – 2015 and 2017.  The 30 day readmissions (rate) applicable to an SNF is subtracted from the number 1 to achieve the SNFRM (Skilled Nursing Facility Readmission Measure).
  • The 2015 rate is called the Improvement Score and the 2017 rate is called the Performance Score.  Both scores are compared against a benchmark for the period applicable.
  • The benchmark equals 100 points.  The difference between the two (Improvement and Achievement) correlate to points plotted on a range – the Achievement range and the Improvement range.  The higher of the two scores is used to calculate reimbursement incentives or withholds – performance score.
  • Performance scores in terms of points correlate to reimbursement incentives/ withhold.  The maximum reduction or withhold is 2%.  CMS has yet to identify the incentive amount but under law, the amount must be equal in total value to 50-70% of the total withheld.  In effect, we envision a system that imputes a floor of minus 2% with points up to the threshold limit equaling a net of zero (plus 2%) and then climbing above the threshold to the benchmark (national SNF best readmission (average) decile).  This maximum level (and above) is likely to equal 100% of the available incentive.

The 2015 data is already “baked” but 2017 is just beginning. SNFs need to be diligent on monitoring their readmissions as this window is the Improvement opportunity.  Reimbursement impact isn’t until 2019.

Care Coordination: This catch-all phrase is now in “vogue” thanks to the IMPACT Act and VBP, along with the recently released, new Conditions of Participation.  The implication or applicability for Care Coordination is found in the new COPs.  Care Coordination elements are located in 483.21 (a new section) titled Comprehensive Resident-Centered Care Plans.  Specifically, the references to  Discharge Planning (Care Coordination) in this section are implementation elements for the IMPACT Act requirements.  Below are the regulation elements for Care Coordination.

  • Requires documentation in the care plan of the resident’s goals for admission, assessment of discharge potential and discharge plan as applicable
  • Requires the resident’s discharge summary to include medication reconciliation of discharge meds to admission meds (including OTC)
  • Discharge plan must incorporate  a summary of arrangements for post-discharge care including medical and non-medical services plus place of residence
  • All policies pertaining to admission, transfer, discharge, etc. must be uniform, regardless of payer source
  • Requires the facility to provide to resident/resident’s representative, data from IMPACT Act quality measures to assist in decision-making regarding selection of post-acute providers

The above elements are in Phase 1 meaning providers should be in-compliance by now (regulation took effect 11/28/16).

February 15, 2017 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , , , , , | 1 Comment

Post Acute Resolutions for 2017

With a new year upon us and (perhaps) the most amount of free-flowing health policy changes happening or about to happen in decades, it seems appropriate to create some simple resolutions for the year ahead.  Similar to the personal resolutions most people make (get healthy, lose weight, clean closets, etc.), the following are about “improvements” in the business/operating environments.  They are not revolutionary; more evolutionary. Importantly, these are about doing things different as the environment we are in and moving toward is all about different.

First, a quick overview or framework for where health care is and where it is going.  A political shift in Washington from one party to another foretells of differences forthcoming.  It also tells us that much will not change and what will is likely less radical than most think.  Trump and the Republicans can’t create system upheaval as most of what the industry is facing is begat by policy and law well settled.  Similarly, no political operatus can change organically or structurally, the economic realities present – namely an aging society, a burgeoning public health care/entitlement bill, and a system today, built on a fee-for-service paradigm.  Movement toward a different direction, an insight of a paradigmatic shift, is barely visible and growing, while slow, more tangible.  In short: where we left 2016 begins the path through 2017 and beyond.

The road ahead has certain new “realities” and potholes abundant of former realities decaying.  The new realities are about quality, economic efficiency and patient satisfaction/patient focus.  The former realities are about fee-for-service, Medicare maximization, and more is better or warranted. The signs of peril and beware for the former is evident via today’s RAC activity and False Claim Act violations pursuit.  Ala Scrooge, this is the Ghost of Christmas Future – scary and a harbinger to change one’s behavior or face the certainty of the landscape portrayed by the Specter.

So, resolution time.  Time to think ahead, heed the warnings, realize the future portrayal and make plans for a different 2017.

Resolution 1: The future is about measurable, discernible quality.  No post-acute provider, home health or SNF, can survive (much) longer without having 4 or higher Star ratings and a full-blown, operational focus on continuous quality improvement.  The deliverable must be open, clear and transparent, visible in quality measures and compliance history.  FOCUS ON QUALITY AND IN SPECIFICS INCLUDING HAVING A FULL-BLOWN, FULLY INTEGRATED QAPI PROGRAM.

Resolution 2: The future is about patient preference and satisfaction.  For too many decades, patients have gotten farther detached from what health care providers did and how they (providers) did it.  No longer.  Compliance and new Conditions of Participation will require providers to stop paying lip-service to patient centered-care and start now, to deliver it.  The new environment is no longer just what the provider thinks the patient wants or should have but WHAT the patient thinks he/she wants and should have.  TIP: Brush-up on the Informed Consent protocols! FOCUS ON PATIENT PREFERENCES IN HOW CARE IS DELIVERED, WHAT PATIENT GOALS ARE, AND THEIR FEEDBACK/SATISFACTION WITH SERVICE. 

Resolution 3: Efficiency matters going forward.  This isn’t about cost.  It is about tying quality to cost and to a better outcome that is more economically efficient.  The measurement here is multi-faceted.  The first facet is utilization oriented meaning length-of-stay matters.  The quicker providers can efficiently, effectively and safely move patients from higher cost settings to lower costs settings, is the new yardstick.  The second facet is reductions in non-necessary or avoidable expenditures such as via Emergency Room transfers and hospitalizations/rehospitalizations.  NOTE: This ties back to the first resolution about quality. MANAGE EACH ENCOUNTER TO MAKE CERTAIN THAT EACH OF LENGTH OF STAY IS OPTIMAL, AT EACH LEVEL, FOR THE NEEDS OF THE PATIENT AND THAT ANY COMPLICATIONS AND AVOIDABLE ISSUES (FALLS, INFECTIONS, CARE TRANSITIONS) IS MINIMIZED.

Resolution 4: The new world going forward demands that we begin to transition from a fee-for-service mindset to a global payment reality.  This transition period will represent some heretical demands. While fee-for-service dies slowly as we know it, its death will include interstitial periods of pay-for-performance aka Value-Based Purchasing.  Similarly and simultaneously, new models such as bundled payments will enter the landscape.  Our revenue reality is moving and thus, a whole new set of skills and ideas about revenue capture and management must evolve. RESOLVE TO STOP LOOKING AT HOW TO EXPAND AND MAXIMIZE EACH MEDICARE ENCOUNTER.  THE NEW REALITY IS TO LOOK AT EACH PATIENT ENCOUNTER IN TERMS OF QUALITY AND EFFICIENCY FIRST, THEN TIE THE SAME BACK TO THE PAYMENT SYSTEM.  REVENUE TODAY WILL FOLLOW AND BE TIED TO PATIENT OUTCOMES, ETC.

Resolution 5: To effectuate any kind of permanent change, new competencies need development.  Simultaneous, old habits non-effective or harmful, need abandoning.  The new competencies required are care management, care coordination, disease management, and advanced care planning.  Reward going forward will require providers to be good at each of these.  Each ties to risk management, outcome/quality production, and transition efficiency.  Remember, our rewards in the future are tied to efficiency and quality outcomes.  Advanced Care Planning for example, covers both.  Done well, it minimizes hospitalizations while focusing on moving patients through and across higher cost settings to lower cost settings. THIS IS THE YEAR OF BUILDING.  RESOLVE TO CREATE CORE COMPETENCIES IN ADVANCE CARE PLANNING, CARE COORDINATION AND THE DEVELOPMENT AND IMPLEMENTATION OF BEST-PRACTICE, DISEASE MANAGEMENT ALGORITHMS AND CARE ALGORITHMS IN AND ACROSS COMMON DIAGNOSES AND RISK AREAS (e.g., falls, skin/wound, heart failure, pneumonia, infections, etc.).

Resolutions 6: The world of post-acute is changing.  To change or adapt with it requires first and foremost, knowledge.  Too many providers and often, leadership within don’t understand the dynamics of the environment and what is shifting, how and when.  Denial cannot be operative and as Pasteur was famed to say, “chance favors the prepared mind”.  Opportunity is abundant for those providers and organizations that are up-to-speed, forward thinking and understand how to use the information available to them.  RESOLVE TO EDUCATE YOURSELF AND THE ORGANIZATION.  KNOW HOW THE 5-STAR SYSTEM WORKS.  KNOW WHAT VALUE-BASED PURCHASING IS ALL ABOUT.  KNOW THE MARKET AREA YOUR ORGANIZATION IS IN AND HOW YOUR ORGANIZATION COMPARES FROM A QUALITY PERSPECTIVE (MEASURED) TO OTHERS.  KNOW THE HOSPITAL PLAYERS AND THE NETWORKS.  KNOW YOUR ORGANIZATION’S STRENGTHS AND WHAT IMPROVEMENTS NEED TO BE MADE.

Happy 2017!  The beauty of a New Year is that somehow, we get a re-start; a chance to do and be different than what we were in the prior year.  For me, I like the CQI approach best which is more about constant evolution than a wholesale, got to change now, approach.  Success is about doing things different as realities and paradigms shift.  We are certainly, from a health care and post-acute industry perspective, in a paradigm shift.  Take 2017 and brand it as the Year to Become Different!  The Year of Metamorphosis!

January 4, 2017 Posted by | Home Health, Policy and Politics - Federal, Skilled Nursing | , , , , , , , , , , | Leave a comment

SNFs: Strategies to Mitigate Readmission and Rehospitalization Risk

Across a number of regulatory elements beginning this year (May/June through October), hospitalization and readmission rates (to) post-hospitalization from SNFs will be measured and ultimately, factored into the SNF landscape via reimbursement penalties and Star ratings.  Below is a quick summary of where and when the hospitalization/readmission issues come into play.

  • CJR – aka bundled payments for Hip and Knee replacement, began April 1.  The issue here is that readmissions post-hospital discharge count against the required measurement elements of cost and quality across the 90 day episode of care.  The impact is direct to the discharging hospital but in turn, can impact the willingness of hospitals to discharge to an SNF if the readmission risk is outside the regional quality benchmarks.  Poor performance can impact referrals, go forward partnerships and for those SNFs that can and will participate at-risk in Year 2, access to incentive payments.
  • SNF VBP Value Based Purchasing begins in July of this year with the first measurement period continuing through July of 2017.  Rehospitalization rates for SNFs will be measured (all cause, risk adjusted).  Beginning in October 2018, CMS will reduce Medicare A payments by 2% for SNFs that perform on this measure, below benchmark standards.
  • Five Star – in May/June of this year, new measures are added including rehospitalizations (plus hypnotic use, discharge home, decline in ADL status since admission, mobility in room).  The QMs will be rebased to incorporate these new measures.
  • IMPACT Act – Expected in the SNF PPS final rule for 2016 (April, data collection beginning in October 2017) are four new measures including rehospitalization upon admission and 30 days post discharge from the SNF.  The other elements are discharge to community, drug regimen review and average cost per beneficiary during and after the SNF stay.

Though I have cautioned facilities to pay attention to their hospitalizations/rehospitaliztions for some time now, it isn’t too late (almost) to get started; started in earnest!  Below are my top four recommended strategies to employ ASAP (not in any particular order) to mitigate post-discharge hospitalization risk and post-admission rehospitalization risk.

  1. QA Your Transitions: Every hospitalization/rehospitalization requires a QA analysis of the reasons why, whether such reasons were appropriate/inappropriate, what transpired at the hospital, and most important, what could be done (if anything) to change the events leading to the transition.  The latter element is part of the organization’s QAPI and begets staff training, system change, etc.  The key is to do a true root cause analysis.
  2. Staff Education: As my firm works with facilities constantly, we notice that the largest, single reason for care transitions out of the SNF to the hospital (ER, etc.) is a lack of staff competence in assessment and communication with physicians and families.  The inability to present a clear picture of the resident’s current condition, options, monitoring points, etc. creates confusion for the physician and a sense of insecurity for family, precipitating the transition if for no other reason than perceived “safety”. Plenty of tools exist (contact me for resources) from AMDA (physician communication protocols) to INTERACT.
  3. Advance Care Planning: Too often this subject is viewed as gathering advance directives (code/no code status, Living Wills, DPOaHCs, etc.).  While these are important the real crux or guts of this element is the discussion concerning specificity of care decisions, including hospitalization/care transitions.  Based on my and my firm’s experience, better than half of all care transitions to a hospital are avoidable with proper planning.  Up front, clear conversation with patients/residents and families regarding the SNF resources (what can be done in-house, etc.) and the risks of hospitalization can and will reduce hospital transitions (particularly ER visits).  I suggest developing a communication tool regarding the decision(s) and sharing it with staff, physicians and most important, patients and families.
  4. Algorithms and Pathways: These elements take the vagaries out of the care planning and care delivery process, eliminating what can be and typically  are, transition triggers.  For CJR, we built hip and knee pathways.  These translate to standardized careplans, address the advance care planning elements, discharge points, pain, skin/wound, etc. comorbidities.  As these elements are addressed pre-admission and within 24/48 hours of admission, a clear reduction in transition risk is present.  Likewise, build as many comorbidity (common) algorithms as possible. For example, I recommend pain, anti-coagulation, diabetes, CHF, depression, and bowel/constipation protocols as a start.  Depending on the SNF’s admission profile (typical case-mix), others may be more pertinent.  What we know is that too many transitions occur as a result of an unclear game plan and approach to resident/patient care leaving careplanning gaps, communication gaps, and treatment protocol gaps.

Concluding: A few caveats apply.  Reducing readmission and/or rehospitalization risk starts at a core facility/organization level.  My strategies above assume that the SNF has proper/adequate staff levels and adequate resources in terms of a solid therapy program, medical direction and physician staff.  Additionally, the SNF should have (by now) a functioning QAPI program in place.  Without such a program, the core QA function required to understand transitions and complete a root cause analysis is only an exercise.  Finally, one last tip.  Reducing hospitalizations/rehospitalizations is an organization-wide initiative.  It is not solely a nursing or social services function.  Every discipline has a role and when the root causes of transitions are analyzed it becomes clear quickly, how many little or seemingly minor pieces properly detected and addressed, contribute to reducing this risk element.

April 12, 2016 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , , , | 2 Comments

Leading Age Ohio Presentation

The slides/Power Point from my presentation at the Annual Conference for Ohio Leading Age titled “QAPI in Action/Ohio” is available on this post (below) and on the Reports and Other Documents page of this site.  Please feel free to download and distribute as desired.  Good to see everyone in Ohio!

QAPI in ActionOhio

August 29, 2014 Posted by | Policy and Politics - Federal, Skilled Nursing | , , , , , , | Leave a comment

SNFs: Five Compliance Issues to Pay Attention To

I don’t write a lot on compliance issues. Given the scope of my firm’s practice in this area, maybe I should.  My practice focus is more strategic, policy, research  and corporate development while compliance is the purview of another Sr. Partner and it is our largest practice area (by full disclosure, this practice area is headed by my wife).  In a recent meeting, we reviewed the list of common/current compliance issues, engagements, and information and speaking requests and determined that five compliance issues bear illustration via a post here.  These are not in order of importance but their appearance represents issues of current magnitude or issues where we see clients potentially putting themselves “behind the 8 ball” by not addressing the requirements properly.

  1. Emergency Disaster/Preparedness Plan: In December of last year (2013), CMS issued a proposed rule that will significantly update the requirements for providers to address all elements of Emergency Preparedness (storms, earthquakes, active shooters, infectious disease outbreaks, etc.).  While final Conditions of Participation are forthcoming as comment periods were extended, providers who have yet to start on a path toward compliance will find themselves startled by how lengthy and daunting the route toward compliance is. This process is a complete revamp of anything prior.  Attached via link is the CMS Preparedness checklist: https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertEmergPrep/Downloads/SandC_EPChecklist_Provider.pdf   Clearly, the larger the organization the greater the length of time and preparation required to complete the plan.  As of this writing, the significant majority of the providers we connect with regularly are not in compliance and worse, haven’t started a process toward compliance and/or, haven’t paid attention that this new requirement is forthcoming.  Note: This requirement applies to virtually all providers that participate in Medicare and Medicaid including hospitals, home health organizations, hospices, and yes, Assisted Living Facilities if the same receive resident care funding via Medicaid waiver programs (Home and Community Based Services).  Anyone wishing additional info. or templates on this requirement, contact me directly via a comment to this post with a valid e-mail address or via the contact info. on the Author page of this blog.
  2. CPR/Advanced Care Planning: In October of 2013, CMS issued new survey guidance to SNFs and State Survey Agencies requiring that all SNFs provide CPR to residents who wish resuscitation and that each SNF have a program and process in-place to assure adequate trained individuals, the communication and education of residents regarding the availability of CPR and the rights of residents to execute Advance Directives including no-code orders.  Effectively, CMS has said that a facility must provide residents access to CPR if desired, 24 hours per day, 365 days per year and no longer will “no code” policies suffice or “911 policies” be permitted.  This regulation went into effect 30 days after it was published though we are just beginning to see enhanced enforcement.  For SNFs there are many nuances to consider including the issues around resident transportation, activities outside of the facility, etc.  As the SNF, without a complete discharge or transfer to another provider for specific care (hospital, ER, etc.) is still responsible for the care of the resident, CPR trained individuals must be available (and the SNF must assure availability) when residents are transported to physician visits, on therapeutic (recreational) outings, etc.  Again, as with the Emergency Preparedness requirements, we continue to see a large number of SNFs unaware of this requirement and not in compliance by the documentation and trained staff requirements across the resident care continuum.  The original CMS memo on this issue is here : http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-14-01.pdf
  3. QAPI: I have written about this topic in an earlier post ( http://wp.me/ptUlY-fa ) and posted a PowerPoint from a presentation I did last fall on the Reports and Other Documents page of this site.  While CMS has not yet set a hard date for SNFs to be compliant with a QAPI program, one is forthcoming.  Like the Emergency Preparedness requirement, QAPI is not a simple “paperwork” fix.  Meeting the requirement takes time and requires commitment fromf the entire organization plus an enhanced engagement from residents (via input), families/loved ones, and community.  Additionally, with pay-for-performance forthcoming (competitive bidding/Quality Measures), facilities that are not actively engaged in a QAPI effort are today, behind and falling further behind.  Illustratively, we have clients that have had their proverbial compliance Bacon “saved” by having a fully functional QAPI program in-place (QAPI minutes, data, etc. were used to show surveyors that issues were addressed, monitored and continued to be monitored – particularly QIS friendly).  The take-away is that SNFs need to get on their QAPI journey now and build, build, build!  Again, anyone needing additional resources that aren’t on this site or direction, feel free to contact me via comment or e-mail (on Author’s page).
  4. Care Transitions: SNFs that aren’t actively monitoring any and all transitions of their residents to other providers, especially hospitals, are placing themselves at- risk; competitively and from a reimbursement perspective.  While the latter has yet to arrive, it is coming as CMS will, under ACA mandated pay-for-performance rules, begin to reduce Medicare payments for SNFs that re-hospitalize and hospitalize unnecessarily, Medicare residents.  Additionally, as bundled payment models expand and ACOs increase, SNFs that cannot control their transitions are at competitive risk; the risk that they will be precluded from various alliances, ACO models, etc. In May of 2003, CMS issued enhanced survey guidance for hospitals via updated interpretive guidelines on discharge planning, focused on re-admission reductions.  In order for SNFs to continue to garner referrals and position themselves for competitive success in the near future (and survival), a focus on care transitions is paramount.  Attached is the link to Interact – a good resource for transition monitoring and reductions tools: http://interact2.net/
  5. Medicare Therapy Billing: This issue is on the OIG’s radar, in their 2014 work plan and forward on the audit agenda for CMS.  SNFs that ignore this issue are asking for potential significant problems including False Claim Act exposure (it is illegal to bill Medicare for services not medically necessary).  SNFs need to have an audit step engaged, periodically reviewing claims against the MDS, the careplan, nursing documentation, etc.  If an SNF is using a contract therapy provider, this audit step is even more critical.  Remember, SNFs cannot cede liability for fraudulent acts committed as a Part A provider to a contractor.  Additionally, most therapy contracts we see (virtually all) limit the therapy company’s liability (indemnification) for rejected claims to the cost of the therapy billed to the SNF. In other words, while the entirety of the stay or large portions thereof are deemed non-payable to the SNF by CMS (or a CMS auditor), the SNF will recover from the therapy provider, the cost of therapy billed to the SNF for the stay – the rest of the RUG revenue is gone!  In short, SNFs cannot nor should ever allow, their therapy contractors immunity from routine outside audits of their care provision, their MDS coding, their documentation, etc.  This is a big and growing compliance risk area for SNFs and knowledge and simple systemic audit tools are a big step toward keeping this risk low.  For additional insight on this area and resources, contact me directly via e-mail or post a comment on this article.

June 19, 2014 Posted by | Skilled Nursing | , , , , , , , , , , | 2 Comments

QAPI: What’s it all About?

Last week I spoke at two joint provider-surveyor training conferences regarding QAPI or more specifically, how it really works and what it looks like in “real-time”.  QAPI is a new survey requirement for SNFs; fully expanded to Quality Assurance, Performance Improvement.  Up until recently, SNFs were required by federal conditions of participation to have a Quality Assurance function, though the same requirement was ill-defined.  The definition evolving today is QAPI which really isn’t new or all that vogue.

For SNFs that have undergone JCAHO or CARF accreditation, you know what (or should know) QAPI is.  Its core is measurement of key resident care outcomes, tracking the same, and then improving care delivery processes to improve outcomes.  Key areas in SNFs today are Falls, Psychoactive Drugs, Wounds/Pressure Sores, ADL Decline, etc.  QAPI also integrates education, staff input and resident input/satisfaction as elements to identify and measure, performance and improvement.

My first encounter with QAPI (we didn’t call it that at the time) was 20 plus years ago when I was the CEO of a large post-acute/seniors housing system and we tackled JCAHO accreditation.  Briefly, back then, we developed and instituted a process of identifying key resident clinical outcomes, service outcomes, audit steps, and then process improvement/performance improvement teams.  We developed resident/family survey processes, tracking tools, and a committee structure to review performance, identify gaps in service, and conduct education and improvement projects.  Suffice to say, accreditation went famously as did numerous re-accreditation surveys throughout my career.

Since then, I have taken this same system to clients and continue to see similar results, when the system is used appropriately (principally, good compliance and good care outcomes).  It is a bit labor intensive at first but not expensive.  Any organization can use the methodology and modify accordingly, including using it as a core tool for planning, etc.

Below is my core framework for a functional QAPI program (call it whatever you want).  Like any recipe, customization is somewhat required based on the organization’s size, resident mix, etc.

Start

  • Create a simple Mission statement and policy for your committee. This should come from the highest level of management in the organization including the Board or the Ownership elements.
  • Identify a Committee including all elements/disciplines of care – Nursing admin and staff including CNA representation, Administration, Social Work, Dietary, Activities, Therapy, Medical Care/Medical Director, others as warranted.  Add a community member of two as well – an outsider with core health care knowledge is best.
  • Select a committee chair – should be someone who can effectively run a meeting and keep people accountable.
  • Develop a record keeping and minute taking function – a committee coordinator or secretary.
  • First tasks for the Committee: Decide a meeting structure, rules, frequency, roles, etc.
  • Identify, via the Committee, key elements to start monitoring – areas of weakness, opportunities for improvement, etc.

Next

  • Conduct and audit or assessment of the organization, utilizing an outside source to do the work.  I recommend a Mock survey as the best tool to use.  Have the findings reviewed by the Committee.
  • Develop a series of indicators based on the audit findings – a dashboard with benchmarks.  If Falls are identified as a weakness, start with the raw number.  Response times same thing (call light wait times).  Use actual data and unambiguous, easy to understand outcomes that are readily measurable.  I suggest only a few at the beginning and add more as the process progresses.
  • Assign improvement tasks to groups or sub-committees to review processes and recommend changes.  Find the “core” or “root cause” for non-satisfactory results.  Set a time-table for the analysis to be completed and recommendations made to the Committee.
  • Educate the organization staff, all levels, about what the Committee learned from the audit, what it is measuring and where the process is headed.  Be as open and as candid as possible without violating any confidentiality rules. Solicit input during the education sessions.

Up and Running

  • Plan on continual repetition of the above process.  Even when indicators achieve an ideal level of performance, keep monitoring.  Always review and always audit.
  • Integrate feedback loops – resident/family satisfaction surveys.  I suggest starting with paper surveys and focus groups.  I also encourage adding other point-in-time systems such as a customer comment “hotline” and e-mail box.
  • Produce visible results that are open to all staff – show how things work and how they improved.
  • Add focused audits on unique or separate issues highlighted by feedback loops.  Families may identify certain care or service elements that no one else has.
  • Schedule continuous outside audits – annual mock surveys, complaint mock surveys, billing audits, careplan audits, etc.  Run the findings back through the Committee.

Over time, the best practices I have seen focus primarily on education and repeat “testing” mechanisms.  It is impossible for an organization to audit its self so partnerships with an outside resource are critical; a trusted resource that is skilled and efficient (readers who need referrals here, please e-mail me at the address provided on the Author page).

Below and in conclusion, is my “must have” elements to create a really functional, viable QAPI program.

  • Top management engagement including if applicable, ownership or governance.  These folks must buy-in and must be stakeholders.
  • Broad committee representation, not necessarily filled with management personnel.  Front-line individuals must be part of the committee.
  • A methodology for integrating customer feedback.
  • A defined audit partner and a system of audits.  I like to see three routine audits – billing, documentation related to billing (especially Medicare/Medicaid) and compliance.
  • A record-keeping function/communication function.
  • A process that ties in policy review and approval, research, physician performance, education at the committee level (grand rounds, journal club review, etc.).
  • A process that can evolve and tie to compensation for senior management, gain sharing programs, and other reward systems.

My Power-Point presentation from the two-day training sessions is available to readers, for download, on the Reports and Other Documents page of this site.

September 20, 2013 Posted by | Skilled Nursing | , , , , , , | 2 Comments

Assisted Living, PBS and the Lessons Learned

Since last week, I’ve fielded a number of questions/inquiries stemming from the PBS segment on Assisted Living.  Interesting, a number of the queries have come from sources tangential to the industry (policy folks, trade associations, advocacy groups, etc.).  Thematically, these sources are looking for answers as to “why” and “what can be done”.  Aside from ill-advised regulations, my perspective is the best fix is an industry driven effort.

One could over-simplify by saying, “don’t take anyone as a resident that needs more care than can be or should be provided in Assisted Living” but that’s not practical.  Residents change throughout their stay, sometimes rather abruptly.  The most complex changes, and those that represented the focus of the PBS piece, are cognitive and behavioral.  While medications exist to ameliorate or control certain behaviors, the medications have side-effects and are ideally, the final, last course of behavior management.  In all instances, behavior medication should only be given in a setting where a Registered Nurse is present and assessments and monitoring can occur (remember, only Registered Nurses can assess by license authority).

The lessons learned or should have been learned and the counsel I have provided to clients and inquisitors alike is as follows;

  1. Be clear with residents and families on admission, what kind of staff are on-site and immediately available.  This communication should frame then, the services that can and will be provided.
  2. Be clear with resident physicians on the same information.  Don’t encourage or allow physicians to become comfortable with providing orders for PRN (as needed) medications if the same medications require a professional assessment prior to administration, unless the facility has RN coverage on each shift.  Effectively, this means that PRN orders for anxiolytics, hypnotics, anti-psychotics, narcotics, etc. are inappropriate without access to an RN for an assessment.
  3. Beef-up pre-admission screening and assessments with qualified, licensed personnel to fully understand, prior to admission and re-admission, the care needs of the resident.  In many cases, I advise going to the resident’s current place of residency prior to admission.
  4. Make certain that any public (written in particular) or oral representations of Assisted Living as an alternative to nursing home care are gone and certainly, not made or implied. Assisted Living is not a substitute for institutional care if the institutional care is truly required.
  5. Create specific assessment and re-assessment periods to address care changes more frequently.  I like quarterly reviews for Memory Care residents and no less than semi-annual for Assisted Living (non-Memory Care).  I also like mandatory 30-45 days post admission, again at 90 days and then semi-annual.  I also like this schedule to repeat whenever a resident is hospitalized and returns or returns after an SNF stay.
  6. Utilize evidence-based, best practice protocols for AL and Memory Care.  AMDA is a good resource.  Provide physicians with the information as well.
  7. Develop and utilize, a solid orientation and training program for staff.  For Memory Care, there are some good resources available today from Leading Age, AHCA and ALFA.  For facilities and organizations that are heavily invested in Memory Care, I also recommend exploring and using, TCI or CPI to augment training (specialized training in dealing with aggressive and combative behaviors).
  8. Be focused on staff levels based on care needs of residents.  If increasing or integrating more professional staff is not an option, be vigilant on discharge planning or transition planning.  Bottom-line: If you can’t effectively meet resident needs 24/7, say so and start discharge planning.  Have sufficient numbers of staff trained and available, even PRN if required, to address resident care challenges.

For facilities/organizations capable of going to the “next” level, either by size or by financial status, I recommend the following as true “game-changers” for Assisted Living.

  1. Contract with a “house doctor” or Medical Director.  Build a system that integrates elements of medical oversight and engagement with your resident population and staff.
  2. Expand the care team to include social workers, in Memory Care a psychologist or psychiatrist (or RN extender), a dietician, qualified activities professionals, and rehabilitation therapists.
  3. Employ a building or program administrator with appropriate degrees and training plus a demonstrable history of working in a post-acute/long-term care environment.  Paying a bit more is worth it for someone with appropriate training and education.
  4. Become active participants in state and national trade associations.  Encourage staff to participate as well.  I also encourage networking with other professional organizations such as the Alzheimer’s Association.
  5. Hold regular family meetings or focus groups to both inform and solicit feedback.  I like at least semi-annual.
  6. Connect with a local home health provider for staff augmentation when residents need more care, temporarily or until discharge.  I also recommend connecting with a hospice agency.
  7. Contract for pharmacy consultations on all residents and if possible, have a pharmacist as a resource to Memory Care staff.

Final Word: Communicate and be clear with residents and families regarding the services that are “truly” available and where the “appropriateness” line resides for the organization/facility.  Don’t ever extend beyond what staff can provide and what the organization is capable of delivering on a consistent almost constant basis.  Recognize that resident care needs change and that limitations exist as to what ALFs can and should provide.  Be clear, be compassionate, and be honest – within the community and the organization.

August 6, 2013 Posted by | Assisted Living, Uncategorized | , , , , | 1 Comment

Emeritus/PBS and a Window on Assisted Living

PBS is planning on airing a segment tomorrow (Tuesday, July 30) on its program Frontline, highlighting Assisted Living care in the United States (titled “Life and Death in Assisted Living”).  Much of the content focuses on Emeritus and other large, for-profit operators.  A link to the PBS website follows as summary to the broadcast. http://www.pbs.org/wgbh/pages/frontline/pressroom/frontline-propublica-investigate-assisted-living-in-america/

I have seen a first-run of the program on a pre-release basis finding it fascinating, troubling, accurate and inaccurate all at the same time.  The core takeaway that I found relates to an issue I have written on, lectured on and consulted on for a number of years now.  This issue dominates the conundrum that is Assisted Living.  The issue is what I label as “appropriateness”.

Routine readers and followers of mine know that I am of the opinion that the Assisted Living industry is essentially over-developed in most major markets.  By over-developed I mean more units than true “appropriate” demand.  The PBS piece reflects this to a learned viewer.  Like Hospice, the true niche’ for Assisted Living and particularly, Memory Care in Assisted Living, is rather small if we apply the “appropriateness” criteria.  Taking the analogy a bit further (Hospice and Assisted Living), the fraud trend that has enveloped a major portion of the Hospice industry via primarily Vitas (and others) bears striking similarity between the PBS/Emeritus feature segment; a large supply of outlets, a drive for continued earnings growth, and a lack of truly appropriate patients and/or residents to fuel the occupancy/encounters required to support continued earnings growth, increasing sales, etc.

While I realize the above is a bit esoteric, the logic is economically sound at all ends. More is often not better and the principal of diminishing utility is easily visible, especially to the customer when supply exceeds demand in health care. The plain fact of the matter is that the Assisted Living market has flourished due to a drum-beat fallacy that it is a suitable replacement in many regards, for structured institutional care.  This myth is perpetuated by policy makers who crave relief within their Medicaid programs (transition nursing home residents from institutional care environments to assisted care facilities and save big money).  It is perpetuated by senior care advocates.  It is fostered by marketers for AL companies that ply families with a mixed message of phenomenal care in non-nursing home settings, etc. In the end, no matter what the rhetoric, the reality rises – appropriateness.

Before anyone assumes that I am a basher of the Assisted Living industry, think again.  I have run Assisted Living facilities, developed them and consult for Assisted Living operators, investors and developers.  Like Hospice, I think Assisted Living is phenomenal, when used and structured “appropriately” (there’s that word again). The problem is that the “appropriateness” definition has morphed and incorrectly so.

Assisted Living is a growth industry primarily because it remains essentially unregulated in terms of development and minimally regulated in terms of operating.  True some states are a bit more rigid than others but for the most part, building an Assisted Living facility is primarily a capital-raise challenge as opposed to a licensing challenge. The sole impediment, once capital is available, is community zoning ordinances in most states.  Even then, working with most communities and through zoning is not an insurmountable challenge.  With a fueled belief that an onslaught of baby-boomers will chew-up unit supplies (these boomers not yet even close to Assisted Living age profiles), units spring forth.

As units sprung forth, what many developers and operators first noticed is that the promised circle of consumers was a bit “short” for occupancy targets.  No problem.  Thus, a re-labeling or re-purposing began to take shape.  Turn the excess into Memory Care via new labeling and plow another niche’.  This re-purposing worked enough to beget a new trend; build new Memory Care Assisted Living units.  Fueled by all of the same non-realities as mentioned before and a rather simplistic and easy development environment supply of Assisted Living and Memory Care cranked-up.

By definition in most states, Assisted Living and Memory Care is a non-skilled environment.  To that point, most operators don’t consistently staff a registered nurse or other skilled personnel on a daily basis and to this point, they aren’t required to by regulation.  The typical model includes varying degrees of professional or licensed presence ad hoc as opposed to directly purposed.  In this ad hoc system, professional staff act more like consultants rather than direct caregivers.  Most states don’t require a specific license or education component for the building administrator or manager; typically a minimal training or vocational course with a test.  I have literally encountered Assisted Living managers who have a high-school education and were formally, food service personnel or in one rather larger organization, a failed insurance salesman.  His training consisted of a three-day state endorsed program, followed by a multiple choice test earning him a “license”.  He was hired despite never running a facility or working within an elder care environment. The company brought him in as a “trainee” and promoted him within three months to a manager of a 70 unit facility; Assisted and Memory Care.

Where the industry challenges lie are at the appropriateness level.  Assisted Living is appropriate, properly structured, for residents requiring minimal to no direct professional care.  It exists to provide a structured, non-institutional environment and care level that includes meals, ADL care, cueing, activities, and wellness.  The bulk of the care can and should be provided by non-licensed, non-professional individuals.  Correlating to regulatory requirements current in most states, this is the basic premise and thus, definition.  Given today that in many locations, supply of units exceeds individuals who truly require this minimal level of direct care, operators in need of occupancy and revenue, introduce higher-care level residents.  Since the regulatory environment is minimal and structurally, ill-equipped to monitor the number of Assisted Living facilities, operators could freely expand the “appropriateness” criteria to suit their business needs.  Unfortunately, as the PBS segment implies, the infrastructure for many operators (particularly staff levels, skill and training levels) didn’t adjust to the actual care needs of residents.

It is important to note, not all operators are guilty or frankly even the majority, of stretching the appropriateness definition and when more challenges arise, they have staff and programs in-place to adjust their care accordingly.  As in hospice, the typical bad-actor pattern is apparent arising from a fundamentally flawed business model, incongruous with the customer.  I like profit and so do my clients, including my non-profit clients.  The problem arises when profit becomes too short-term, short-sighted and drives all decisions separate from the underlying needs of the customer.  As in Hospice for certain organizations, the economic realities of the industry that is Assisted Living , primarily supply and demand, are working against it.  What I fear most for the industry is a regulatory back-lash that like all back-lashes regulatory, will be onerous, ill-conceived and punitive for the providers doing it “right”.

July 29, 2013 Posted by | Assisted Living, Senior Housing | , , , , , , | Leave a comment

Five Things Every Healthcare Executive Should Focus On: Updated, Revised

More than two years ago I wrote a post regarding “five” things every SNF administrator should focus on and lo and behold, a reader asked late last week if I would revisit this subject.  She (the reader) is not an SNF administrator so she asked if I could focus more globally; sort of a “best practices” approach.  While each health care industry segment has its nuances, in reviewing my travels, the challenges and successes leaders have, where failures occur, and where careers are made and sustained, I quickly found commonality in approaches and focused competencies.

Healthcare leadership is complex and very dynamic.  The alchemy is nearly one-part inquisitor, one-part psychologist, and one-part theoretician.  Those that do well and thrive, regardless of industry segments, are today “global” thinkers capable of transitioning to tactician seamlessly.  They are outcome oriented and know the pieces of the puzzle well enough to be bull**it proof.  They think and act as if synergism is their main duty and they understand (acutely) the law of unintended consequences.   Bottom line: They see cause and effect and constantly seek ways to shorten the distance between the two.

Industry issues aside regarding changing reimbursement, regulation, etc., the focal core that I find as key and thus, displayed in action by the successful executives is as follows.

  1. Quality: This is an oft used buzzword but very skilled and successful executives can articulate this for their business immediately.  In healthcare, quality is all about tangible outcomes that patients experience.  Going one step deeper, quality today is also about a measurable outcome at a particular cost.  In my economist jargon, this is about utility and warranty.  Utility is maximized in healthcare when the payer and the patient receive a desired, tangible outcome at a market or below market price.  Warranty in healthcare is about the outcome’s sustainable benefit to the patient and the payer.  Technical yes but this theory is a key focal area for healthcare executives.  Think about it tangibly in light of today’s issues.  Hospital executives need to understand this because it impacts re-hospitalizations.  The outcome must match the warranty or in other words, the care must be complete such that avoidable readmissions are low or non-existent.  For SNF executives, the same holds true but with a slight twist.  The SNF executive must deliver excellent care all while minimizing the risk areas that lead to re-hospitalizations such as infections, falls, and medication errors.  As a core competency, the best executives I work with didn’t wait for the government to tell them to reduce their falls, reduce their re-admissions, etc.  They knew these issues years ago and had already understood the relationships between quality or utility and warranty.
  2. An Outside-Inside View: Where I find failings in healthcare leadership it almost always starts with executives that believe their challenges and their industry are utterly unique.  They not only bought the healthcare executive manual but they memorized it.  They seek only peer knowledge or interaction, often I believe to validate that “they” are doing the same thing everyone else is doing.  Alas, the story of the Lemmings on their way to the sea is cogent.  What I see as key competency among the best is that they have an “outside-inside” view competency.  This outside-inside view is characterized by looking beyond their industry at analogous problems or issues and seeking solutions that are applicable.  Yes, healthcare is unique but certainly not so unique that strong parallels in marketing, customer service, project management, systems design, etc. can’t be found via other industries.  Across my career, the best ideas I’ve used came from other industries – not healthcare.  I simply altered the concept to fit the situation.  Philosophically, “the coolest things in life exist in places where their aren’t any roads”; a quote from a former camp counselor to my son.  Developing this competency is all about forcing oneself to explore well beyond the industry noise, rhetoric and ideologies.
  3. Small Spaces and Closet Organizers: As odd as this heading sounds, it makes sense to me when I see it applied.  The industry has run through its hey-day where bigger was better and, “if you build it, they will come”.  Really strong executives today have learned how to creatively adapt and re-adapt and they realize the core competency of “revenue contribution” per square foot is the new reality.  This competency area is all about revenue maximization and in a go-forward universe of revenue stagnation via reimbursement cuts and flat payments, using space efficiently and keeping the closets organized rather than overflowing with stuff not needed nor ever used, is the requirement.  Gone are the days where more is better or additional lines of inventory make sense.  This focus is truly a trend from manufacturing where realities on plant size, productive capacity and just-in-time inventory came to roost many years ago.
  4. The True Meaning of Health Policy: This is about the Paul Harvey requiem; “the rest of the story”.  Health policy impacts are point in-time in terms of regulatory implications and reimbursement implications but woven together, a trend is evident.  This competency area is about knowing what the policy trends are, where Medpac is going and why and how the enterprise led should position accordingly.  I have written repeatedly that regardless of regulation and new laws like the PPACA, core issues about entitlement financing, sustainability of funding, etc. will beget certain and permanent changes in health policy.  Ignoring these realities and the resulting policy trends is akin to committing hara-kiri with a butter  knife; no one blow is fatal but the culmination of all blows leads to a slow, painful death.  Much is trending right now regarding networks, ACOs, bundled payments, pay-for-performance, accountability, fraud, etc.  Knowing not only the implication of each but how the same is directing the future is a core executive competency.
  5. Freakonomist: OK, I’m stealing from a book title here but the point is simple: Healthcare executives need to understand at a certain level, core human behavior and economics.  I’m not talking about finance or reimbursement but behavioral economics.  One of the major problems or arguably, the single most demonic problem with healthcare today lies in the axiom that “what get’s rewarded, get’s done”.  We have lived too long on the native belief that acute, fee-for-service, episodic medicine or care is how the U.S. health system thrives.  Thus, we have overspent and over-taxed the system without regard to a potential breaking point.  We have arrived at such a point.  Today’s healthcare executive must realize this core reality and to survive and thrive, re-define his/her leadership to developing systems and services that prevent utilization or revise utilization to more of a minimalist plane.  Those that embody the philosophy that “better is better” rather than “more is better” will understand this innately.  This competency is about “solving” core problems and not chasing root, flawed ideologies of the past.  Profit and success will come via innovation and system-thinking not from finding new ways to exploit Medicare and Medicaid.

November 13, 2012 Posted by | Assisted Living, Home Health, Hospice, Senior Housing, Skilled Nursing | , , , , , , , , , | 3 Comments

Presidential Debates and the Core of Health Policy

Tonight marks Round 1 in the three-part series of presidential debates.  Why Round 1 is interesting, aside from the political points and positioning each side craves (in his favor) is that this round is supposedly focused on domestic issues. Deficits, tax policy, education and yes, health policy will no doubt work through each candidate’s comments.  As debates aren’t really a debate, moreover a synopsis of highlighted ideas and a reference guide to potential political ideology, its important for viewers at the very least, to understand the gravitas of current health policy issues facing each candidate.  Neither will delve into detail tonight but both will crack the door and offer a peek into their “politically” framed policy agenda.  Some of this will be a re-hash of what we already know and some, a nuance yet divulged.

What strikes me as a tad odd is that little true substance exists for either candidate when it comes to health policy and the major issues facing the economy and the country going forward.  Perhaps the Obama camp believes it has laid out its cards via the ACA. Perhaps the Romney camp believes that its cautious embrace of the Ryan plan is sufficient to paint a contrast and thus, a different direction.   Substance from both camps is sorely lacking.  With the issues today, the “devil is truly in the details”.

The plain facts remain unchanged and unaddressed by either party and thus, by either candidate.  The entitlements in this country, especially Medicare and Medicaid are unsustainable, underfunded and consuming the entirety of the income tax revenue flowing into the government’s coffers.  The net result is that this country prints debt obligations and relies on the power of a central banking system and a moribund world economy to keep debt costs low (via interest rates) and thus, repayments viable – for now.  Repetitively, we print new debt to fund the payments on existing debt plus our new debt.  We have become so used to looking forward with unreasonable projections of a recovery period and phantom GDP growth that somehow, we believe the political pundits and the rhetoric that the hemmorhagic problems within our entitlements can be solved with band-aid solutions.  We willingly deny the world realities confronting us in Greece, Ireland, Spain, France, and Italy instead, buying a failed story of omnipotence and a belief that the European issues are somehow “different”.  Wrong.

The frank reality of today is that the health care system in the U.S. has become a governmental entity unto itself and thus, a whole new economy.  Unfortunately, the incentives are poorly and incorrectly aligned and the revenues uncorrelated to actual population needs for health and services required.  Neither candidate has come close to addressing this reality.  The Obama plan does nothing to “reform” health care spending or to change the relationship between spending and care delivered.  If anything, it creates a new entitlement so ill-conceived in funding that it requires the country to print even more debt to fund.  While it does attempt to solve an issue of assuring some form of health insurance for everyone it does so at a cost that isn’t covered by any credible source of revenue, sans debt.  At the core, the system remains as flawed as it always was with new layers of red tape and bureaucracy that only increase the gap between care services, cost and ability to pay.

The Romney approach is as flawed.  It too places “ear-rings on the pig”, focusing on expenditure controls as a solution.  Like the Obama approach, it falls short of addressing what is truly wrong with the system and relies solely on a less government is better approach.  Kudos to Romney for at least recognizing that some path of privatization provides more hope for a sensible outcome than interventionist government.  Negative points however, for not recognizing that some interventionism is required to realign the incentives and to change the policy framework.  Without some direct intervention, merely shifting the problems horizontally won’t solve anything.

What we need and should hear is painful and yet simple.  The painful part is that revenues must go up and that means tax collection.  It also means that we must address the growing percentage of people in this country whose “intake” from the government is greater than their “input”.  This gap creates apathy and disengagement and it is demonic at its core.  As we have seen in Europe, a diet rich in entitlements leads to bloat and too much bloat creates stagnation and ultimately, civil and economic discord.  Apply austerity isn’t the answer but it is the only thing governments can do.  Common sense is the answer but to get there, we need to be clear where the issues lie and how the fixes will create winners and losers.

In the U.S., the path toward entitlement reform starts with identifying who truly needs ‘what” and then, developing a system for distribution of the “what” and proper, simple payment systems that fairly compensate those that provide the “what”.  Gone must be all current definitions born out of times in history that no longer are relevant.  Eligibility ideology must be the first thing to change and quickly.  Next, we need to get “real” about the “what” and who pays.  Bioethicists such as Daniel Callahan and Arthur Caplan and economists and researchers such as Uwe Reinhardt and the folks at Dartmouth Atlas have done significant work in this arena.  We need to embrace quickly, their work and that of others who have researched how health care is used and by whom.  Moreover, we need to look closely at the relationships between utilization and incentives or payments.  Dr. Gawande’s piece published in the Atlantic points this out famously.

Being in and around health care now for thirty years and an economist by training, it is apparent that so much can be done quickly and efficiently, albeit not without some pain and definitive leadership from Washington.  We must be willing to identify the elephant in the room and to start to clean-up after it.  Our delivery and our focus is not only wrong but it is wrong-headed.  Simple economics tell us that “what gets paid for or rewarded gets done” and thus, we spend disproportionate sums on acute, episodic care at the expense of where the real issues lie.  We are an aging society and one fraught with chronic disease.  Our systems and our payments fail to address these key realities.  While our population ages, our supply of physicians trained to treat elderly patients is stagnant and in real numbers, dwindling.  Primary care is needed in huge amounts yet no incentives exist for the system at present to train sufficient numbers and to pay adequately.  The process of medical education and payment is horrendously skewed.  I have heard from all too many physicians in training that the debt to earn ratio is too prohibitive to enter primary care and certainly, geriatric care.

We need to begin to pay well and directly, for prevention and treatment of chronic conditions and proportionately and over-time, less well for acute episodic care that on its face, against the lower cost of prevention, is a negative return.  I am not suggesting eliminating but reducing the incentive to accurate and tested correlations of necessity and payment.  I doubt that one or perhaps even a dozen less heart centers in major metropolitan areas would change the level of care and in fact, may improve it as the efficiency created by focused and known volumes at centers of excellence will produce better returns and likely better outcomes.  Certainly, the opportunity cost of prevention applied and early treatment produces a far greater return (for less resources) than care that is delivered in “earnest” and in “crisis”.  This stuff we know.

My top ten, not that either party is listening, quick initiatives that make simple policy and economic sense are hewn through observation and in the trenches work.  For what they are worth and happy debate watching!

  1. Make the purchase and annual premium payments for the purchase of Long-Term Care insurance fully deductible – not subject to itemization.
  2. Until we can reform Medicare, up the eligibility age for fee-for-service Medicare to 68 and require anyone younger, non-disabled, to enroll in a Medicare Advantage Plan. Pay the plans at 92% of the fee for service rate and allow them to keep any excess profit – stop quibbling here.
  3. Subsidize physician education through grants for any primary care physician at the rate of 50% of the cost of their medical education.  For geriatricians, the subsidy should run to 75%.
  4. Re-balance physician payments to more adequately pay for Medicare patients at real rates and get rid of the insane “meaningful measures” garbage.  Fix the sustainable growth formula by abandoning the whole thing and going to a cost plus formula that is simple and correlated to real practice data.
  5. Reform at a national level, the medical liability system in the U.S.  Create hard caps and a sole administrative system (like mediation or arbitration) for adjudication.
  6. Reinvigorate and complete the core goal of HIPAA – a single, standard claim form.  No other form for any private or governmental claim can be used in the U.S.
  7. Change Medicaid funding and eligibility to a per person funding status with a simple, core benefit structure.  Allow states flexibility to expand coverage but only if the state funds the expansion.  The core funding status should be 50/50.  Allow high-risk Medicaid patients to enter a national health risk pool that requires third-party management of their care and directs their care to high quality, low-cost centers.
  8. Publicly post cost and quality data that is meaningful and consumer oriented.
  9. Target with national education and information, the top five chronic diseases.  Employ private, third-party agents skilled in managing chronic illness to target this issue with outcome targeted payments – some up-front, some from savings.
  10. Re-base all provider payments with an up to date, modernized payment system that is outcome driven.  Reform regulatory oversight for providers to a completely privatized accreditation system that is focused entirely on patient care outcomes versus insane regulatory standards.  If providers can measure-up and reduce costs but still provide meaningful, standard outcomes, all the better.  The hospital systems, the SNF system, the home care system, the hospice system under Medicare is so convoluted and disconnected from patient outcomes and care requirements that it produces fraud, incents poor behavior and disproportionately rewards unnecessary care.

October 3, 2012 Posted by | Policy and Politics - Federal | , , , , , , , , | Leave a comment