Pressure Mounts on SNF Performance

As a follow up to my post this past Friday, some additional political pressure aimed at assessing and improving safety and quality of care in America’s nursing homes has come in the form of a letter from Senators Bill Nelson (D-FL) and Charles Grassley (R-IA) to CMS chief Marilyn Tavenner. In that letter, dated April 2, the senators reference the now much discussed OIG report – Adverse Events in Skilled Nursing Facilities: National Incidence Among Medicare Beneficiaries – and challenge the CMS Administrator to reconcile the reported performance weaknesses with the current certification and survey process for nursing homes.

They went on to request an understanding of what steps CMS is taking to address the identified weaknesses in the survey and approval process. As has already been discussed, a primary means of response that CMS is counting upon is implementation of the long-awaited QAPI initiative, which will require SNFs to self-assess and critique their existing operational and clinical performance while developing a comprehensive plan to address and remedy identified performance gaps. And the resulting QAPI program of those facilities will then become subject to the state survey process.

The letter also referenced an IG report from November of 2013, Medicare Nursing Home Resident Hospitalization Rates Merit Additional Monitoring. The key finding of that report on which the senators focused was the noted variation in readmission rates across geographic areas (i.e., the associated hypothesis being that following existing best practices of better performing facilities could yield overall lower rates of readmissions – and thus lower costs to Medicare and Medicaid).

The upshot here is that SNFs now have giant targets on their backs. Provider advocates and trade associations now probably wish even more so that the QAPI regulations had not been so long delayed, as there might now be at least some political cover from being able to report work was already underway to assess these issues and challenges. Now when then QAPI regulations are released there will be heightened attention, focus and expectations of organizational compliance.

Bottom line for SNF organizations: if you haven’t started to familiarize yourself with QAPI, yesterday would be a really good time to start.


What’s Your Performance Improvement Strategy?

If you are a post-acute/long-term care provider still sitting on the sidelines waiting for a clearer understanding of how Healthcare Reform is going to impact your organization’s future, well then all I can say is, “Good luck with that – let me know how it works out for you.”

In an article published this past weekend (Medicare Seeks to Curb Spending On Post-Hospital Care), Kaiser Health News’s Jordan Rau reported on the wide variability in Medicare spending on post-hospital care across the county – and the attention that it is getting from CMS. Attention that is quickly turning to targeting: as in even more deeper cuts in reimbursement.
Several of the examples included:

Medicare recipients in Connecticut are more than two-times more likely to be admitted to a nursing home than residents in Arizona.

Medicare spends an average of $8,800 on a patient’s home healthcare in Louisiana – while spending $3,800 in New Jersey.

The rate at which beneficiaries receive post-acute services covered by Medicare in Chicago is three times the rate in Phoenix.

And the aggregate economic impact of variability in per capita spending is substantial. As the growth in post-65 age cohorts continues to accelerate both the inherent cost contribution (demand) as well as cost-push inflation (a result of seeking to satisfy that demand with scarce resources) is increasing. As reported in the Kaiser article, Medicare spending on PA/LTC, “has grown at 5 percent a year or faster in 34 of the nation’s 50 most populous hospital markets in recent years.”

The article goes on to describe the perceived reasons behind the variability that has captured CMS’s attention:

Misaligned incentives: Hospitals have not historically been economically impacted by the consequences of post-hospital care delivery, while PA/LTC providers have been incentivized to drive utilization based upon maximizing reimbursement rather than the appropriateness of the setting.

Information asymmetry: Very often PA/LTC referrals are a function of personal relationships and familiarity between those responsible for discharge planning and those responsible for marketing available beds.

Provider ambiguity: The evolution and confusion that today characterizes post-acute care services and settings (and the impact technology is having on care settings – e.g., telemedicine) often impairs market competition.

Lack of care coordination: While post-discharge readmissions have captured the popular media’s attention because of the ACA payment penalty, it’s the underlying lack of care coordination between acute and PA/LTC providers that results in cost inefficiencies extending well beyond avoidable readmissions.

These concerns, taken together with other indicators of potential waste and inefficiency (please refer to the article cited), will drive tremendous pressure in the years ahead to lower Medicare post-hospitalization expenditures (thus the chainsaw metaphor). How PA/LTC providers address these pressures will mean the difference between staying in business – or not.

When thinking about performance improvement as a vehicle to address this challenge remember this: more than any other singular criteria, successful PA/LTC organizations that survive the next decade will have learned to trade on value. Value in healthcare is quite simply the patient’s satisfaction with the care delivery experience divided by the cost to provide that experience (with the notable understanding that a patient’s satisfaction is typically augmented by their families’ satisfaction). With or without the Affordable Care Act, that is where the industry is headed.

But what does it mean to, “trade on value?” To help Pub visitors begin thinking about that I have provided a few fundamental questions that you might want to ponder – or discuss with colleagues:

  1. What’s most in demand?
    If Medicare, Medicaid and private insurers were to evaporate tomorrow, what core service offerings that you provide would be the most likely to still generate revenue? What distinguishes those services from others?
  2. Where do we fit in the care continuum?
    Forget the fancy charts and graphics of think tanks and consultants showing you where you fit. Think about the patients you care for every day from the perspective of their overall care experience: where does your organization provide the greatest value to that patient’s recovery along the care continuum?
  3. Who wants to work with us?
    How do potential partners in your market determine their value? Based on that understanding, can you enhance their value? What are the risks that you would lower it? Can you effectively address those risks?

  4. How do we protect and enhance our core value?
    In healthcare, more than any other industry, the innate ability to produce value is primarily attributable to direct caregivers. What should you be doing today to ensure you protect that most valuable resource? And what should you be doing tomorrow to help those caregivers increase the value you provide to patients?


WARNING: Rough Waters Ahead

This is a self-promotional blog post, but the connection to healthcare public policy is clear enough.  Just this morning Erskine Bowles and Alan Simpson released a new plan that seeks to find some balance between the polar opposition of the Republican and Democratic parties over fiscal management.

Their approach would cut $600 billion from Medicare and Medicaid and raise $600 billion in new tax revenue from ending or curbing deductions and tax breaks. It would also include $1.2 trillion in cuts to discretionary spending, along with cuts in cost-of-living increases for social security, farm program and civilian and defense retirement programs. 

The Obama Administration has discussed supporting $400 billion in cuts to Medicaid and Medicare, while the House GOP considers any new revenue a nonstarter.  The self-serving political intransigence of the two parties is unlikely to abate any time soon.  But the metaphorical swirls of focus and attention, like water in a sink flowing toward the drain, are clearly zeroing in squarely on further Medicare and Medicaid cost containment.

Healthcare providers are going to have to double down on lowering expenses while concurrently reacting to market and regulatory forces that are driving demands for improved outcomes, higher safety and better quality.  In reaction to this tremendous challenge, Artower Advisory Services has partnered with StrategyDriven Enterprises to create a new product offering that can accelerate the efforts of healthcare providers to meet these challenges.

The Value-Driven Performance Improvement Model© leverages StrategyDriven’s knowledge and expertise developing and implementing performance improvement models in the nuclear power industry to give healthcare providers the tools they need to improve efficiency, enhance production and improve outcomes while lowering costs (i.e., increase patient value).

Please take a moment to read our new White Paper, which describes the V-D PIM in detail (just click on cover page, below).


Performance Measurement Systems Cover

Pub Chat No. 2: Mark Testa ~ The Data-Driven Future of Healthcare

In this second installment of Pub Chat I am posting an interview with Mark Testa, the Vice President of Quality & Analytics at Catholic Health Services in Miami, Florida.  Mark is a Six Sigma Master Black Belt trained at Motorola and now responsible for planning, designing and implementing quality and process improvement strategies at CHS.

With or without last week’s SCOTUS decision to uphold the Affordable Care Act the healthcare industry – including post-acute/long-term care providers – has been steadily seeking to make greater use of Lean and Six Sigma methodologies in quality and performance improvement.  There are a lot of talking heads out there running around promoting the future of, “Data-Driven Healthcare.” Frankly, I don’t think many of them understand what that really means – and this is an area where having a little bit of knowledge may be more detrimental than continued ignorance if bad resource investment choices are made.

So I thought it would be helpful to provide some basic understanding of these concepts, as well as several suggested resources where you can learn more about quality and performance improvement in healthcare.  I hope you enjoy the interview, which you can listen to by clicking on Larry’s microphone, below:

  ~ Sparky

Recommended resources to learn more about Quality, Performance Improvement and the applicability of Six Sigma principles to Healthcare:
ASQ ~ Lean and Lean Six Sigma in Healthcare
Quality Digest
Lean-Six Sigma for Healthcare: A … Guide to Improving Cost and Throughput
Six Sigma in Healthcare: Today and Tomorrow (HIMSS)