Oct 3, 2012

Big Data and Brand Management

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Big Data: big opportunities or big problems?  While most of what I have read seeks to position this question in the context of anticipated investments in human resources and IT infrastructure, I have a different take.  I think the most critical and salient difference in determining whether Big Data has positive or negative implications for healthcare providers will depend primarily on whether and how effectively it is utilized and managed in organizational branding.

Part I ~ Implications of Big Data
In explaining this, let’s start with a look at just a few examples of where and how Big Data will impact healthcare organizations. 

Clinical and Epidemiological Research
Healthcare providers have long been cognizant of the important role that cutting edge clinical and epidemiological research plays in helping educate and prepare them to provide evidence-based care.  They are also aware of the tremendous burden that misguided and/or shoddy research creates on both their time and talents.

At a clinical level, Big Data means being able to utilize previously prohibitive quantities of biomolecular data to test relational hypotheses much faster, while at the epidemiological level it means being aware of social cause and effect relationships much sooner.  In either instance, the impact and expectations of what to do with more information at an accelerated rate will have a significant impact on healthcare providers, as well as patient-consumers.

Consumer Empowerment
There are already literally thousands of smart phone/tablet app’s available to help individuals manage there own care.  A quite natural focus among these has been to design applications targeting chronic disease management.  As the Boomer age wave grows, so too will that portion of the patient population that is not only adept but very conversant in using electronic data and information to be highly informed and highly motivated self-care advocates.

Transparency
Though Big Data is by far not the only force driving greater transparency of financial and operational performance metrics from healthcare providers, it will be the catalyst that transforms those metrics from merely data to usable information – and unfortunately, probably a good deal of misinformation as well.  Providers will have to be both cognizant and vigilant in assessing how this emerging trend will impact their market positioning.

Implications
The common thread of these three examples is what I call the Acceleration of Digital Chaos©.  More data is always beneficial to the extent that it creates greater awareness, enhances education, expands knowledge – and most importantly, creates wisdom.  But as we know, more data does not always lead to such hopeful results.  It also often leads to more confusion, more frustration – and worst, more risk of making critical decisions based upon faulty analysis.

Part II ~ The Importance of Brand Management
Wherever there is chaos and confusion that grows out of attempts to address a basic human need like healthcare, so too exists the double-edged sword of opportunity and risk: the opportunity to bring clarity amidst the chaos in the form of high-value solutions, as well as the ever present risk of making things worse.  And there too lies the associated challenge of branding: opportunities to leverage Big Data in ways that can greatly enhance the value of your brand – or facilitate its disintegration into a pile ashes.

To make sure Big Data serves your brand rather than destroys it will require an active awareness and understanding of where and how Big Data will intersect with Brand Management.  Several examples of these intersections are offered for your consideration.

Social Media
Social Media continues to grow in importance and relevancy to the healthcare industry.  Enter Big Data and now you have a tremendously powerful vehicle for gaining valuable information and insights on patterns and behaviors – of both consumers and competitors.  

To the extent a knowledge advantage can be gained through use of Big Data, that information can be used to help position your organizational brand in concert with consumer demands and expectations – and before competitors achieve that positioning.  I cannot think of a more important market-oriented investment that healthcare providers can make at this time than exploring and understanding how Big Data will transform the way data collected through Social Media can be used to competitive advantage.

Quality and Integrity
Examples in Part I above highlight the likely potential where Big Data will generate tremendous personal anxiety, confusion and frustration.  Take the average consumer-patient looking at knee-replacement surgery in the year 2015.  Armed with 30 published research papers on the advantages and disadvantages of different techniques; over 50 web site addresses stored in the web browser with pages and pages of performance data on surgeons;  15 different self-help iPad applications downloaded to determine the most effective means of post-survey rehabilitation.  You get the idea.

So the ability of healthcare providers to be perceptually positioned as a trusted resource to cut through all of the confusion and frustration will create substantial market advantages.  But, importantly, those healthcare providers that are able to achieve a sustainable advantage will not only facilitate a more efficient and helpful pathway through the confusion – but they will do so while backing it up with consistently higher quality care than competitors.  The two must go hand in hand.

Data Security and Corporate Compliance
I saved the most important for last.  This is a hugely tremendous risk to brand value that will be attendant to using Big Data.  We read of examples every day where patient data has landed in the wrong hands.  The consequences of being at fault – whether real or perceived – for a breach of data privacy and protection could erase years of investment in building your brand overnight.

Yet it is reasonable and plausible that a breach could happen despite the most advanced and diligent efforts of prevention.  In such instance, the organizational fallback position must be a strict adherence to corporate compliance policies that clearly make the protection of personal data the highest priority – not only in theory but in practice.

Please note this post is not by a stretch intended to be an exhaustive survey and consideration of either the ways in which Big Data will impact healthcare, nor the numerous ways in which it has the potential to impact healthcare providers’ brands.  It is intended primarily to help leadership teams of such organizations begin to perform their own assessment of how and where Big Data can have a Big Impact on their future branding efforts.

Cheers,
  Sparky

Filed Under: Brand Management, Editorials & Opinions · Tagged: , , ,
Shoots & Ladders and US Healthcare Delivery
Sep 26, 2012

Shoots & Ladders and US Healthcare Delivery

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imageI just wanted to share a quick thought before I lost it.  Do you remember playing Shoots & Ladders as a kid? Do you remember playing Shoots & Ladders with your kids?

Well I was thinking recently of how I would try and graphically depict  our current US Healthcare System to an alien with whom language would be a decided communication barrier – and this is the image that came to mind: a virtual salmagundi of disjointed pathways that individuals are required to navigate during periods in their life when they are least able to do so.  Throw in  the moving staircases of Hogwart’s Castle in the Harry Potter series, and you probably have a pretty accurate depiction of what our healthcare system looks like from a patient’s vantage.

Imagine though if the Shoots & Ladders game board were redesigned.  Instead of having equal squares representing a static and linear path that must be followed – left to  right, going up a row at a time, hoping that you get the care you need by landing on the right space and hoping you don’t get shot off into the wrong direction – what if there were one square (or better yet, circle) in the middle.  That would be where the player (patient) starts.

Then imagine we get rid of the ladders, because although they represent the benefit of jumping ahead in line, they also represent having to climb; and there are, of course, OSHA considerations.  Let’s instead keep the shoots, but make them work to our advantage.  Realign all the shoots so that they flow out from the center and to the several destinations that represent that element of the healthcare delivery system the patient needs.

Around the board then you have the physician’s office, the hospital, the clinic, the lab, the specialist’s office, post-acute/long-term care facilities …  You get the picture, and one can only take a metaphor so far when the subject matter you’re trying to explain has the reality of life and death attached to it.

Of course, what I am describing here is a holistic system of care delivery that puts the patient at the center of all providers and services – all the time; instead of being the center of attention of one provider at a time, 15 minutes at a time, as his or her time allows.  Instead of the patient having to navigate the system, the patient is surrounded by the system and controls the system.

So what has to happen to realize this vision? For starters, we need to find some common public policy ground as a nation.  What neither political party seems capable of accepting – motivations notwithstanding – is that being in the middle of a battlefield is worse than being on either side.  The inability, or rather unwillingness, to compromise is killing this country, and along with it the hope of having any type of a person-centered healthcare delivery system.  The winning-at-all-costs attitude that pervades our political conscious is quite ironically going to end up causing us all to lose a lot.

There are also substantial and difficult individual behavioral changes that need to take place in our country as well, and these aren’t confined to any individual constituency.  Providers need to tear down the silos that have long stood as obstacles to sharing knowledge and information.  Insurers need to accept those providers as partners in striving for shared goals and objectives.  And patients need to assume a much greater level of responsibility for their health – and the consequences of decisions made from which their health suffers.

Often lost in the political maelstrom that has become Healthcare Reform of the 21st Century are the underlying trends and drivers of which the Affordable Care Act was as much a codification of as it was the creation of any bold new initiatives.  Good things happen when people communicate effectively.  Healthcare costs less when production is streamlined and coordinated.  And people contribute their greatest talents when their environment is stable and they feel safe.  So simple even a four-year old could play the game.

Cheers,
  Sparky

 

Filed Under: Editorials & Opinions, Industry Trends & Drivers · Tagged: ,
Sep 15, 2012

“Ambient Despair”

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I started Sparky’s Policy Pub back in May because I believed it would be a productive and enjoyable means of sharing information, thoughts, opinions and insights on public policy issues likely to impact providers of affordable housing, aging services and post-acute/long-term care. 

Four months and 27 posts later, rather than write about the what, the how and the wherefore of healthcare policy, I want to pause and focus on the why.  The only significance of my chosen timing is the recent availability of an interview on Terry Gross’ Fresh Air: Advocate Fights ‘Ambient Despair’ In Assisted Living.   In this program she interviews Mr. Martin Bayne, a long time consumer advocate of long-term care – and current resident of an assisted living facility.

In the early 90s Martin started a web site called, Mr. Long-Term Care.  Back then while the world wide web was still in its infancy Martin was years ahead of his time in recognizing the tremendous value the Internet would offer in sourcing, aggregating and organizing content.  He embraced this vision by not only providing – but producing, through both written and audio interviews – what was widely recognized as the definitive online knowledgebase on all matters relating to long-term care in the United States.

I met Martin the way many did – through being first attracted to the tremendous resource that was Mr. Long-Term Care.  It became an indispensable means of quickly accessing statistics, research, opinion – anything that existed or was being developed to help better understand the market, operational and financial characteristics of the long-term care delivery system.

Fortunately for me, my relationship with Martin went beyond just accessing his web site.  In 1998 we cofounded the National Long-Term Care Policy Institute as a reflection of our shared passion for believing there was more needed to be done in terms of taking an honest, objective and candid look at what was working – and what was not working – in our delivery system.

To compare my passion to Martin’s beyond that, however, would be a disservice to him and his life’s work.  I wanted to see change – Martin has effected change.  Some years on now, I still look fondly on the time I spent working with him.  And while we each in our own way continue to fight the good fight, as you listen to Terri Gross’ interview, you will understand why my deference is not humility but personal pride in not only having had the opportunity to learn from Martin – but being able to still consider him a friend.

Cheers,
  Sparky

Click on Mic to listen to interview . . .

          

Filed Under: Audio Interviews, Consumer Advocacy, Uncategorized · Tagged: , , , ,
The Trouble with Avoidable Readmissions
Sep 6, 2012

The Trouble with Avoidable Readmissions

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183911-vlcsnap_2010_05_16_21h56m32s5As a Scot (my name is spelled with one, “t” because my father wanted to be sure I never forgot), I remember with both amusement and annoyance a line from the movie, Braveheart: “The trouble with Scotland is that it’s full of Scot’s.” As I see it, the trouble with trying to address healthcare costs through reducing avoidable readmissions is that there are too many readmissions. Bear with me . . .

Avoidable hospital readmissions are the lowest of low hanging political fruit in the Healthcare Reform debate, representing an immediacy of opportunity to impact aggregate healthcare spending for very little political capital in exchange. The means of cost reduction is directly controlled by the Federal government – in the form of Medicare payment reductions. And the organizations identified as the culprit deserving of such reductions are those behemoth institutions of waste and inefficiency: the hospitals (yes, that’s sarcasm).

To be sure, there is substantial evidence where individuals discharged from a hospital stay wind up back in the hospital because of factors and events that could have been avoided. But avoided by whom – how – and at what cost? Healthcare providers of all types that will be impacted by the readmission penalty had better begin to understand the economic ramifications of how these questions are going to be answered.

As has been rather widely publicized – yet from my personal observation, up until just recently still largely ignored – the Affordable Care Act (ACA) included Section 3025: Hospital Readmissions Reduction Program. Section 3025 amended the Social Security Act such that it now requires CMS to reduce payments to IPPS hospitals with excess readmissions, effective for discharges beginning on October 1, 2012 (i.e., in a few weeks). Initially, the Program has established readmission measures for Acute Myocardial Infarction (AMI), Heart Failure (HF), and Pneumonia (PN).

Excess readmission ratios are calculated by comparing national average rates of readmission for patients discharged to a hospital’s individual experience while relying on a methodology endorsed by the National Quality Forum (NQF). I recognize this is a gross oversimplification, but all of the detail you could hope to find is now widely available – whether on the CMS site referenced above or many other organizations that have made such information available on their web sites.

For FY 2013, determination of the excess readmission ratio is based on actual discharges having occurred during the 3-year period of July 1, 2008 to June 30, 2011. According to a Kaiser Health News report, more than 2,000 hospitals will begin to see payment penalties under the program due to patients being readmitted within the 30-day threshold.  The overall anticipated impact of these penalties is approximated to be $280 million over the next year.

Not surprisingly, as with many aspects of the ACA, the Readmissions Program carries with it a great deal of controversy.  Many clinicians, including physicians, who are directly responsible for the care of those individuals represented by the statistics entering into the determination of a readmission penalty feel that readmissions are ultimately driven by acute medical needs – and patients that need to be in a hospital, well, they need to be in a hospital. Simple as that. Better to pay a relatively small penalty than have a patient die trying to avoid it goes the thinking.

Yet those involved in healthcare delivery on all sides (the clinical, the social, the community and the administrative) understand first-hand the reasonable and plausible goal that the Readmissions Program is seeking to address: a reduction in readmissions that are caused by insufficient and/or improper assistance and care available to the individual after being discharged from a hospital; i.e., the avoidable readmission.

Readmissions resulting from the natural progression of a disease state, comorbidities, unexpected and/or negative reactions to post-discharge treatment – there is legitimate concern that the Readmissions Program will interfere with clinicians’ ability to effectively manage their patients’ health in lieu of what are being considered unwarranted and unwelcomed outside influences and distractions. On the other hand, readmissions that result from a decline in condition owing to non-clinical factors, such as personal trauma associated with transferring and transitioning, the failure to follow a prescribed post-discharge treatment regimen (e.g., diet, exercise, medication), the inability to keep medical appointments – these are significant contributors to readmissions that PA/LTC organizations can have a significant impact upon.

But being able to determine cause in individual cases is going to be a monumental challenge that neither the ACA, nor the regulations promulgated for the Readmissions Program, adequately address. It is going to result in a lot of finger pointing on ward floors – and underneath the tables in board rooms. So we are left with two choices: do some more complaining and hope that the ACA is repealed (and replaced by an ultimately very similar Republican approach two or three years from now), or roll up our sleeves and be innovative in spite of the regulatory challenges.

For those PA/LTC organizations wishing to pursue the latter, I suggest they begin to invest immediately in the development of an operational infrastructure that will facilitate their ability to record, monitor and report the requisite data elements that can be used to evidence all of the contributing factors leading to hospital readmissions of the individuals under their care – clearly and unequivocally. Though, in theory, a large part of the impetus for the Readmissions Program is to engage hospitals in having accountability and responsibility for patients’ welfare post-discharge, as a PA/LTC provider I would interpret that reality as being given responsibility without authority.

Remember this: knowledge is power.  Before engaging in any type of contractual agreement with a hospital that ascribes financial responsibility for hospital readmissions, the PA/LTC organization must be in a position of negotiating strength.  That strength will come from the ability to know and understand – before the hospital does – the nature and root cause of a readmission.  Power will also come from the ability to support that understanding with evidentiary support.

The other integrated concept here, of course, is risk management.  The same knowledgebase that can be used to build negotiating strength can be used to mitigate the risks  – market, operational and financial – associated with hospital readmissions.

PA/LTC provider organizations stand to benefit in several ways from the Hospital Readmissions program.  The inherent demand generated by hospitals seeking to have greater control of post-discharge outcomes should be welcomed in light of trends away from institutionalized care.  The stronger voice many PA/LTC clinical staff have sought in dealing with hospital staff is getting a well-deserved boost.  And done wisely, there are new revenue opportunities available at a time when reimbursement is being ratcheted down at every turn.

As discussed above, however, there are also substantial performance risks that will ultimately bring down some organizations before all is said and done.  Don’t be one of those organizations.

  ~ Sparky

Filed Under: Editorials & Opinions, Hospital Readmissions · Tagged: , , ,
Aug 22, 2012

Community Health Needs Assessment

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TAKE NOTE: There is a new Form 990 reporting requirement for tax-exempt hospitals that nonprofit owners/operators of Inpatient Rehabilitation Facilities (IRFs) and Long-Term Acute Care Hospitals (LTACs) should be aware of – and begin preparing for very soon.

Legal Mandate
The Patient Protection and Affordable Care Act, Section 9007, Additional Requirements for Charitable Hospitals, created Section 501(r) of the Internal Revenue Code.  Section 501(r), in turn, imposes new requirements on 501(c)(3) (i.e., tax exempt) organizations that operate one or more hospital facilities.  Hospital facilities as defined by the IRS include IRFs and LTACs.

Nonprofit providers of aging services, senior housing and non-hospital post-acute/long-term care – while not impacted directly by this mandate – will still want to be educated on the reporting requirements, as it will very likely have a significant impact on future community partnership opportunities with those care provider types.

IRS Guidance
On June 26, 2012, the Internal Revenue Service published in the Federal Register proposed regulations and a detailed preamble regarding the Section 501(r) requirements. In general, the proposed regulations require each hospital to meet four requirements on a facility-by-facility basis:
     1.  establish written financial assistance and emergency
          medical care policies,
     2.  limit amounts charged for emergency or other
          medically necessary care to individuals eligible for
          assistance under the hospital’s financial assistance
          policy,
     3.  make reasonable efforts to determine whether an
          individual is eligible for assistance under the
          hospital’s financial assistance policy before engaging
          in extraordinary collection actions against the
          individual, and
     4.  conduct a Community Health Needs Assessment
          (CHNA) at least once every three years (see Timing,
          below).

    In July 2011, the IRS issued Notice 2011-52, which provided conceptual guidance regarding the Section 501(r) CHNA requirement. The Treasury Department and the IRS are in the process of drafting proposed final regulations regarding the CHNA requirements. Hospitals preparing to meet the reporting requirements can look to Notice 2011-52 for CHNA guidance as if those proposed regulations were already in effect up until six months after the issuance of the final regulations.

Notice 2011-52 appears to permit the collaborative development of CHNA reports for individual facilities (i.e., to the extent plausible, utilize the same market knowledgebase).  Care must be taken, however, to distinguish the unique community needs of those facilities where appropriate: including uniquely defining each hospital’s targeted market (community). Separate implementation plans reflecting the individual operational characteristics of each hospital must be developed as well.

The IRS is also currently seeking comment on the portended advantages and efficiencies of allowing organizations with multiple hospital facilities to prepare a single CHNA for those properties. Each hospital will still be responsible for developing a unique community needs assessment. I believe the prudent approach at this juncture is to assume individual reports must be produced but to be cognizant of how those reports could be combined and integrated into a single report pending further guidance from the IRS.

Timing
The first assessment and adoption strategy (i.e., implementation plan) must have been completed within a three-year period that ends with the fiscal year commencing on or after March 23, 2012. For nonprofit organizations operating IRFs and/or LTACs this means having separate CHNAs and implementation plans completed and available to the public not later than that organization’s fiscal year-end date in 2013.  Failure to complete a timely CHNA for each facility could result in an excise tax of $50,000 per hospital facility and the risk of losing 501(c)(3) status.

Advice
Compliance with this new reporting requirement should be taken very seriously.  The undertones driving the mandate reflect largely bipartisan support of the Treasury Department’s challenging the reasonableness and plausibility of organization’s maintaining their charitable status in lieu of being able to evidence community benefit.  This is a phenomenon which largely exists outside of Healthcare Reform if you will.

For many nonprofit organizations, the consequences of losing tax-exempt status would be financially devastating – so there is a strong incentive to develop a CHNA that aggressively seeks to address identified community needs.  But those organizations must also be aware of the reality that programs created to address identified community needs will be scrutinized by the IRS in subsequent years to determine compliance with representations made in the plans of implementation.

Given what’s at stake and the inherent nature of work effort involved in creating the knowledgebase necessary to complete the CHNA, I believe it makes tremendous sense to integrate the CHNA process into organizational strategic planning.  For many organizations – though likely an unwelcome requirement – it nonetheless offers the opportunity to complete a strategic planning effort where budgetary constraints had previously prevented such effort from being a priority.

In addition – and of critical importance – whatever service and care delivery programming is planned for as a result of the CHNA process should be incorporated into the organization’s long-range and strategic planning.  At a minimum, such planning should be viewed as risk mitigation in assessing whether programs created through the CHNA process are economically feasible and sustainable.  I have previously written a white paper outlining a strategic planning framework that can be integrated with the CHNA reporting mandate (White Paper).

As always, I welcome any comments and questions.

  ~ Sparky

 

Filed Under: Community Health Needs Assessment, Helpful Advice · Tagged: , , ,
Aug 10, 2012

CCRCs: Healthcare Providers–Or Not?

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To be, or not to be – in the business of healthcare.  That’s the question continuing care retirement communities (CCRCs) are facing today – even though my anecdotal experience would suggest the board and c-suite leadership at many of those organizations have yet to be fully reconciled of such reality.

As reported by Alyssa Gerace in Senior Housing News, a recent panel discussion held at SHN’s inaugural Senior Housing Summit in Chicago on July 26th painted a concerning economic forecast for the future of the CCRC model.  Having been involved in near 50 CCRC project developments since the early 90s, I have some familiarity with that model – the good, the bad and what is apparently largely misunderstood.

For a segment of the senior population, typically over the age of 75, CCRCs are a very attractive retirement housing option. They offer the comfort and security of a community tailored to meet the physical and emotional needs of seniors, the social energy of a community setting and the critically important peace of mind that personal services, assistance and care are available, when and if needed, removing that potential caregiving burden from their adult children raising families of their own.

The fatal financial challenges faced by several CCRCs have been largely driven by economic realities beyond the control of those communities’ management teams.  Yes, there have been a few bankruptcies – isolated cases of weak and exposed capital structures, poor planning, mismanagement and a phenomenon the industry has always been challenged with: service creep.  But the economic malaise of the past several years has not been selective in its impact on any business enterprise involving real estate – and so it has not spared CCRCs.

Though understandably self-serving and a tad superfluous in its explanation of the development process, LeadingAge nonetheless prepared a very useful piece that effectively addresses this phenomenon of spotlighting the unfortunate exceptions in,  CCRCs Today: The Real Deal About Retirement Communities.  I refer Pub Patrons there rather than take up space here for a good rebuttal of media attempts to extrapolate isolated misfortunate into industry condemnation.

What concerns me about the future operational and financial viability of the CCRC model a lot more than market influences and capitalization, however, is the impact of Healthcare Reform.   In explaining why this concerns me, it might be helpful first to provide a short summary of how CCRCs contact with residents for post-acute/long-term care.

CCRCs generally contract with individual residents under three agreement types:
Type A: Life care ~ residents typically pay an initial entry fee (often a significant portion of which may be refundable) and a monthly fee that is adjusted for cost-of-living, but if in need of assisted living or nursing care pay no additional fees of any significance.
Type B: Modified ~ the difference from Type A is that some additional payment is required for assisted living or nursing and the amount depends on the nature of the agreement (e.g., there may be a number of free days provided before payment is required or a percent discount from full rate per diems).
Type C: Fee for Service ~ residents requiring additional care pay the full amount for that care, the same as if they had moved in directly to assisted living or nursing without having first been a resident of the CCRC, though priority access to that care may be provided them.

In my experience over the past decade, new project developments have consistently migrated away from Type A contracts to Type C in an effort to avoid the actuarial risk of providing healthcare to an aging population without the contractual means to significantly realign the revenue base generated by that population as a reflection of caregiving costs above what had been projected.  This has been a trend bolstered by the relative lack of success of long-term care insurance policies and annual healthcare inflation.

But even CCRCs that contract with residents under a Type C arrangement – and this is especially true for nonprofits (of which LeadingAge estimates comprise over 80% of all properties) – assume a consequential market and brand risk of being expected to provide healthcare to residents that may not be able to afford that care.  As noted above, the security of having access to personal assistance and nursing care as and if needed has been a fundamental part of the CCRC’s value proposition.

Healthcare Reform is going to significantly increase and accelerate these risks.  So, my counsel with respect to how CCRCs seek to strategically position themselves as healthcare providers is therefore clear: go all in or get out.  I believe the prospective economic benefits of going decidedly in either direction is a plausible strategy for long-term financial sustainability.  I believe trying to hang out in the middle until the dust settles, short of having a substantial endowment, is a recipe for financial disaster.  I have identified below several of the more compelling ramifications of Healthcare Reform to be cognizant of as those leadership teams contemplate this reality.

Intense cost pressures: although the contractual arrangements to provide nursing care at CCRCs most typically include some form of direct payment from the individual receiving care (i.e., whether through an entry fee, monthly fee or per diem fees – or some combination thereof), most communities still have significant exposure to Medicare and Medicaid.  As I have written here before, these payment sources will continue to see tremendous pressure to control aggregate spending on national healthcare, regardless of what happens politically this fall and into 2013. 

And, as of now anyway, accepting these payment sources exposes organizations to the ACA’s future reporting and transparency mandates, which need to be seriously understood and considered.  On the other hand, it is highly unlikely that future quality of care outcomes (which will directly impact revenue) can be met without incurring annual increases in direct caregiving labor costs well above general inflation.  All healthcare providers are going to have to struggle with how to reconcile that which cannot be reconciled.

New care delivery models: ACOs, medical home models, insurance exchanges, payment bundling, the potential redesign of Medicare Advantage Plans – as these models are implemented they will have an unquantifiable impact on the healthcare buying behaviors of CCRCs’ targeted market populations. They will also impact historical patient referral patterns. One can only hypothesize at this juncture the ramifications of these impacts – but to remain economically sustainable means aggressively and proactively monitoring and understanding how these care delivery models will affect an organization’s operations and financial viability.  It also means actively developing clinically-based relationships with other healthcare providers in those organizations’ markets.

Home and community-based services: Primarily driven by market demands, this appears to be an area where CCRCs have been most proactive (e.g., the CCRC Without Walls concept). But from what I have seen so far, most of the interest and activity has been in socialization, hospitality and personal/home care services. If wanting to stay in the business of healthcare, CCRCs should learn quickly what it means to be part of a community-based integrated care delivery network where revenue is tied to clinical quality performance standards that depend, in part, upon other healthcare providers through contractual relationships.  As an aside, I cannot envision a future viable business model for a CCRC that stays in healthcare and does not include home healthcare as a core element of its care continuum.

Infrastructure investments: to be a competitive provider of post-acute/long-term care in lieu of healthcare reform is going to mean having the operational, clinical and technological infrastructure necessary to assess payment risk, monitor and report on outcomes in real time, be effectively positioned to negotiate capitation contracts and be ever vigilant in assessing the emerging local market dynamics of healthcare delivery.  This is an expensive proposition that in all likelihood cannot be funded out of operations: meaning the necessary investment will require either use of equity, incurring debt or leveraging the infrastructure of other healthcare providers in the market through contractual relationships.

Tax exempt status: Though Section 9007 of the Affordable Care Act requires that only hospitals having tax-exempt status complete a Community Health Needs Assessment, how long will it be before a similar requirement is mandated for nonprofit CCRCs – especially when consideration is given to the average wealth and incomes of the populations served by many of these communities across the country.  Being licensed as a nursing care provider with tax-exempt status will ultimately require addressing the justification of that status in terms of how the CCRC benefits its surrounding community.

These are a few of the important considerations that come to mind when contemplating whether TO BE or NOT TO BE in the healthcare business.  I know there are quite a few CCRC organizations that have already recognized this reality and are proactively planning to stay in healthcare.  I have had the very good fortune to have worked with a number of them.  One thing I found they have in common: they each have assumed a decidedly outward looking vantage with respect to their future strategic positioning.

For better or worse, they have embraced the reality that being (staying) in healthcare very much means being proactively integrated into the surrounding community and healthcare provider network.  The resultant consequences of that reality may not create an attractive positioning for some CCRC organizations – and the resident populations they serve.  This is completely understandable and in many cases ought to be thoughtfully anticipated.  Those organizations may be much better served by moving toward an active adult model.  But they should get out of the healthcare business now, before it’s too late.

  ~ Sparky

Filed Under: CCRCs, Editorials & Opinions · Tagged: , ,
Aug 2, 2012

Can Big Data Rescue Long-Term Care Providers?

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Big Challenge
Yesterday, the Alliance for Quality Nursing Home Care announced the release of a new study from Avalere Health, which projects a $65 billion cumulative reduction in Medicare funding of skilled nursing facility reimbursement over the next ten years. The cuts are projected to result from implementation of the Affordable Care Act’s productivity adjustment ($35.3 billion); the regulatory case-mix adjustment enacted in FY 2010 ($17.3 billion); a CMS forecast error adjustment in FY 2011 ($3.2 billion); and the sequestration provision of the Budget Control Act ($9.8 billion).

Several news sources have picked up the Alliance’s press release and noted those states with the highest levels of projected annual cuts, e.g., Florida ($370 million), California ($350 million), Texas ($240 million), Illinois ($240 million), New York ($220 million), Pennsylvania ($200 million) and Ohio ($200 million).  I don’t think the aggregate comparisons are necessarily very useful because there are a host of other considerations that should be included to truly understand the relative impact of these reductions on individual SNF providers in each of these states.  What is quite meaningful, however, is the stark reality the industry is facing: the decade ahead will see tremendous operational and economic challenges as providers try to accommodate the demographic realities of increasing demand at the very same time less resources are available to cover costs.

Big Data to the Rescue?
In the July 2012 issue of HealthLeaders Magazine Philip Betbeze writes about Healthcare’s Big Data Problem.  Well, it’s a problem in so much as substantial obstacles still stand in the way of being able to use healthcare data more effectively – and more pointedly, to the real time benefit of operational, financial and clinical decision making.

If I could sum up that challenge it would be this: how do you take an unparalleled amount of disparate  data (e.g., demographic, operational, financial, clinical) and meld it together into a warehouse of information, such that the various elements of that information can be combined, compared and contrasted in ways that reflect and then empower the distinctive thought processes of clinicians, managers and executive leadership of healthcare organizations?

As the article points out, some very encouraging progress is being made to overcome this challenge, including something called, “natural language processing technology,” which integrates clinician notes from the patient’s EMR into the aforementioned information warehouse.  This could be a huge step forward because it has the potential to address a major obstacle sited by many clinicians: i.e., the ability to effectively capture and later be able to quickly recall and share ad hoc note taking that is such a critical component of a patient’s record.

When looking at the path from data to actionable knowledge it is important to remember that data becomes information only after it has been collected, aggregated and organized.  Information becomes knowledge through analysis.  Knowledge becomes wisdom through synthesis.  Wisdom is the foundation of economically beneficial decision making.  Unfortunately, effectively navigating the winding path from raw data to informed decision making has a lot more to do with human nature and individual personalities than it does with the ability to store and manipulate binary data bits.

The Big Idea
So what does this have to do with post-acute and long-term care? As many providers are beginning to realize – and some I dare say, even accept – the economic future of healthcare delivery is going be built upon value-based incentives and risks.  Ultimately, the distinctive difference between financial sustainability and going out of business will depend on the ability of direct service and care workers – whether that is the medical director or the food service aide – to make real-time decisions that allocate the organization’s resources in ways that add value and minimize risk.

Empowering those individuals with the requisite knowledge (see above) to make those decisions more quickly, more confidently and more in alignment with the organization’s value-based mission will create competitive advantages that lead to comparatively stronger financial performance under value-based contracting and integrated care delivery models.  This is a critically important consideration to have in mind when beginning to explore potential relationships with other healthcare providers in your market. 

It is likely that many if not most post-acute/long-term care providers will have to link into and utilize the Big Data solutions of more formidable acute care organizations.  In doing so, PA/LTC organizations must be in a well-informed position so that they can clearly articulate how such solutions must serve them and their direct service and care workers as a prerequisite to their adding value to an integrated delivery network.  It fundamentally has to be a core element of the negotiating process.

So my advice to the leadership of PA/LTC organizations is straight forward: if you don’t yet realize and understand the impact that emerging Big Data solutions will have on how well you are strategically positioned to compete in a value-driven world of healthcare delivery and integrated models of care – learn quickly.  Or, as an alternative, find someone you trust who does – and listen to them.

That’s what I think, anyway.  Would love to hear what you think!

Cheers,
  ~ Sparky

Filed Under: In the News, Information Technology · Tagged: , , ,
Jul 30, 2012

Medicaid Coverage of Nursing Care in Tennessee: Prudent, Rationing or Inevitable Reality?

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In an article published yesterday in the Washington Post, Guy Gugliotta writes about a new Medicaid policy in Tennessee, which seeks more efficient alignment between reimbursement and cost settings (my interpretation). 

This is very likely an important bellwether of state Medicaid policy that will be repeated in some fashion or other in other states, and it has unsurprisingly been met with a fair amount of controversy and concern.

Operating under a Section 1115 waiver from CMS, TennCare is the State of Tennessee’s Medicaid program, providing health care for 1.2 million with an annual budget of $8 billion. TennCare utilizes a managed care model that extends coverage to additional populations who would not otherwise be Medicaid eligible, while seeking to maintain a consistent level of quality care.  Tennessee has one of the oldest Medicaid managed care programs in the country, having begun on January 1, 1994. It is the only program in the nation to enroll the entire state Medicaid population in managed care.

On June 20th of this year TennCare released a new Nursing Facility Level of Care Guide outlining programmatic changes to its CHOICES program, which, “are designed to target Nursing Facility services to persons with higher acuity of need, while simultaneously making Home and Community Based Services more broadly available.”  This is the subject of the above-referenced article.

With this initiative TennCare seeks to increase the Nursing Facility Level of Care criteria necessary for Medicaid eligibility to a level it believes to be more in line with criteria used in other states while providing a less costly benefit for those individuals who will no longer qualify under the new criteria.  The new criteria are being applied prospectively, so no one currently qualifying for nursing care will be affected.

Under the new eligibility criteria three groups are established:
Group 1: Individuals eligible to receive care in a nursing
                  facility (NF) and requesting care in a NF;
Group 2: Individuals eligible to receive care in a NF but
                   requesting home and community-based services
                   (HCBS) in lieu of receiving care in a NF; and
Group 3: Individuals not eligible to receive care in a NF,
                   but “at risk” of NF placement and requesting
                   HCBS in the TennCare CHOICES program.

Group 3 is the population of concern and being debated from a policy perspective.  These are individuals that may have qualified for nursing care coverage under previous criteria and been eligible for HCBS cost coverage at a level commensurate with the cost of coverage in a NF.  Now the annual benefits available to this population will be $15,000.

From a consumer advocacy perspective the concern is that many individuals in Group 3 will not receive adequate services and care because the $15,000 benefit is not sufficient.  From a state policy perspective the concern is trying to allocate finite resources in a fashion where those individuals with the greatest need are afforded the ability to receive care that meets those needs.  In short, pub patrons, welcome to Healthcare Public Policy in the 21st Century.

From a pragmatic vantage, the initiative in Tennessee has very important ramifications for providers of community-based services and post-acute/long-term care.  This is an initiative that is certain to hasten the trend toward HCBS and away from care in institutional settings.  It is a threat to projected demand for long-term care in NF settings – and it is a threat to projected reimbursement levels available to HCBS providers under Medicaid.

It seems to me that any healthcare provider wishing to include the Medicaid population in its targeted market in the future look now at how to integrate BOTH NF-based care AND HCBS in its care continuum if it wishes to be economically viable and sustainable.  What do you think?

Cheers, 
~ Sparky

Filed Under: In the News, Medicaid · Tagged: , , , ,
Jul 26, 2012

Pub Chat # 4: Community-based Care Transitions Program

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In this edition of Pub Chat I interview Lori Peterson, founder and Principal of Collaborative Consulting.  Lori has been directly involved in helping to facilitate several successful Community-based Care Transition program applications, and she shares with us her insights about what it takes to put together a quality CCTP application.

For more information on the Community-based Care Transitions Program visit the Center for Medicare and Medicaid Innovation web site.  To contact Lori directly, e-mail here at Lori@collaborativeconsulting.net or call 866.332.3923.

Click on Larry’s mike below to hear this interview:

Cheers,
     Sparky

Filed Under: Audio Interviews, Community Based Care Transitions Program · Tagged:
Jul 23, 2012

Healthcare Reform Depends on Home Healthcare

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As shared in this space last week, the Council of State Home Care Associations recently completed a five-month project that was designed to gain a better understanding of how well home healthcare and hospice agencies are prepared for Healthcare Reform.  Artower Advisory Services published the summary findings and observations of that report here.  Note that throughout this post I refer to, “home healthcare” without intending to be ignorant regarding the variation in terminology and services and care provided by agencies of different types (e.g., home care, skilled home health, private duty, hospice, etc.).

Now that the survey is over and results published, I wanted to take a moment and share some background behind my passion for working with and supporting the Council’s efforts and, more generally, the home healthcare industry.  In a nutshell, I believe that if the goals of Healthcare Reform are to be achieved, there are two areas where success will be most important: Wellness and Prevention – and Home & Community-Based Services.

The former because finite resources simply cannot afford to save people from themselves forever, and the latter because the age wave will require a more efficient and effective consolidation of services and care in non-institutional settings.  And, promisingly, I believe there are great opportunities where home and community-based services can be effective in promoting and facilitating wellness and prevention – across all age cohorts.

Shortly after the March 2010 passage of the Affordable Care Act I created a reference document that summarized and organized the various programmatic funding opportunities available to organizations both directly and indirectly involved with healthcare delivery.  What struck me at the time – and does to this day – was the number of instances where home healthcare was specifically identified as a potential recipient of funding pursuant to its role in helping to facilitate the intended benefit of such initiatives.

And what also struck me at the time was the hugely important role that home healthcare must play in the evolution of care delivery models under Healthcare Reform.  There are several compelling reasons in support of this belief.  There are also significant obstacles in the way of realizing the potential of these opportunities.  I will discuss each, in turn, below.

Compelling Reasons Underscoring the Importance of Home Healthcare

Policy Advancements
First, and perhaps most important, is the continued public policy advancement that is moving US healthcare delivery away from institutional settings to individuals’ homes.  Driven by a confluence of consumer preferences (i.e., especially of the Baby Boomer Generation), desire to reduce unsustainable capital costs and recognition of the health benefits home-based care can offer, policy initiatives at both the state and federal levels have steadily been moving toward a redistribution of public funding toward home-based care, and this is certainly reinforced in the Affordable Care Act.

Valuable Positioning
Second is the existing knowledgebase that home healthcare providers possess.  They already have established business models, market intelligence, operational capabilities and the clinical acumen necessary to identify, plan and implement integrated care delivery models that bring services and care into the home.  This “ahead-of-the-curve” positioning can offer substantial advantages to home healthcare agencies as they seek to become  a valuable conduit between acute care providers and patients as part of integrated care delivery models.

Alignment with Community-Based Solutions
Third, they are quite naturally already community-based.  One of the most highly attractive programs thus far in the implementation of the Affordable Care Act has been the Community-Based Care Transitions Program.  While other healthcare provider types are in the community, home healthcare agencies very much are the community.  They are ideally situated to leverage the knowledge and awareness gained from caring for individuals in the very homes that are the foundational elements of those communities.

Ability to Transcend Care Delivery
Finally, taken together, private duty, home care, skilled home healthcare and hospice agencies represent a wider transcendence of individual service and care than any other provider type.  From providing the occasional, and as-needed, personal care services (i.e., assistance with various activities of daily living) to intensive, ‘round-the-clock medical care, home healthcare agencies are excellently positioned to facilitate holistic and integrated care delivery.

Industry Challenges

But as the ORASI© survey identified, there are substantial challenges that must be overcome if home healthcare agencies are to successfully take advantage of the opportunities presented.  Some of these challenges are within the purview of organizations to develop strategies for overcoming, while others represent exogenous considerations beyond their direct control.  Thus, to a significant degree, the latter represent important future public policy considerations that must be addressed if the desired benefits from home healthcare are to be realized.

Challenge: Fraud & Abuse
The home healthcare industry has been its own worst enemy for nearly a generation now.  The inability to self police perceptually damaging fraud and abuse has resulted in a giant target on the industry’s back that has been manifested in burdensome regulations, which have often appeared to be throwing the baby out with the bathwater.  Although widely accepted that the isolated actions of a few have resulted in broad brush castigation, perception is reality: and the reality is this is a daunting challenge the industry must address square on before it can hope to be strong participants in integrated care delivery models.

Challenge: Producing the Necessary Labor force
Home healthcare is quite obviously a very labor-intensive business.  Unfortunately, the dichotomy of projected future demand for caregivers and cost constraints holding down the ability to gain a competitive advantage through wage differential is likely to get worse before it gets better.  This phenomenon will likely be the greatest driver of industry consolidation in the near future.  Organizations that are better able to recruit, train and educate and then retain the highest quality caregiving staff will ultimately have success over competitors.

Challenge: Over Reliance on Technology
Not unique to home healthcare is the belief (hope) that technology – both care-oriented (e.g. supportive, remote monitoring,  tele-health) and information (e.g., electronic medical records, communication, operational functionality) will provide great opportunities to increase productivity and efficiency.  This is a belief that I fear will end up costing a lot of agencies their businesses.  While technology certainly offers great promise, successful agencies will recognize it for what it is: an enabler of people and processes.  If the requisite investments are not made in the latter two, expenditures on technology will only hasten the burden of financial unsustainability under Healthcare Reform.

Challenge: Non Home Healthcare Provider Acceptance
In order for home healthcare agencies to be effective participants in a world of integrated care delivery they must be able to partner with other healthcare providers in ways that add value to both those organizations – and, more importantly, their patients.  Healthcare in the US for far too long has been dominated by silos of care segmentation.  Getting different provider types to work together and across disciplines is going to require a tremendous amount of personal discomfort on the part of healthcare providers – and it is going to require a major leap of trust, particularly in the sharing of patient information.  For better or worse, the burden of building that trust rests largely on the home healthcare industry.

Policy Considerations

The home healthcare stands at the precipice of a tremendous opportunity to be the primary facilitator of innovation and the catalyst of sustainable change in how healthcare is delivered in the United States.  It is strategically better positioned than any other care provider type to embrace the underlying concepts of Healthcare Reform embodied in the Affordable Care Act.  It is also functionally and pragmatically better positioned than any other provider type to implement the several programmatic integrated care delivery initiatives of the Act.

But as identified above, the industry faces substantial challenges.  Without being able to make the requisite investments in infrastructure, knowledgebase, technology and – most importantly – caregivers, the industry will not be equipped to fulfill these expectations.  Thus, it is vital that future public policy recognize the importance of providing adequate funding necessary to develop the industry into the national care delivery network required for success.  Not only does the home healthcare industry’s success depend upon it – but the successful implementation of Healthcare Reform under the Affordable Care Act depends upon it.

  ~ Sparky

 

Filed Under: Editorials & Opinions, Home Healthcare & Hospice · Tagged: , , , ,
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