Historically, hospitals and health systems have operated somewhat autonomously, treating patients with acute needs, discharging them to the next level of care, and turning their attention to other patients who require immediate intervention. However, there are several evolving dynamics prompting hospitals and health systems to look beyond their walls.
As reimbursement has started to shift away from volume and toward value, hospitals and health systems are seeing the merit of partnerships with skilled nursing facilities, home health agencies, and other post-acute organizations to improve quality and reduce costs. Likewise, now that hospitals are on the hook for patient outcomes for 90 days post-discharge, they are focused on ways to limit unnecessary readmissions to avoid penalties, and post-acute providers may be helpful in this regard. Hospitals may also be looking to outsource services that augment the hospitals’ core competencies. Or, perhaps the health system wants to offer a more convenient experience for patients receiving certain types of care, such as dialysis.
Although post-acute relationships can have value, many acute care organizations are not accustomed to establishing and sustaining these kinds of partnerships. This action brief, sponsored by Option Care, outlines the benefits of a well-designed post-acute relationship and the key steps involved in building one.
The Advantages of Pursuing a Partnership
A well-considered affiliation can offer many rewards. For instance, it can ensure smoother care transitions between acute and non-acute settings, which extends the level of care from the hospital to the post-acute environment. This can result in shorter lengths of stay and a reduced likelihood of hospital readmissions.
In addition, it can be less expensive to deliver certain types of care outside of the hospital, so a solid relationship with a post-acute provider can lower care costs while maintaining quality, putting a health system in a good position to navigate emerging care models.
Post-acute partnerships can also yield a better use of resources, allowing the hospital to pay more attention to things that support core competencies while relying on the external provider to oversee areas that maybe aren’t as critical to the hospital’s mission and goals, but are still necessary. For example, if there is a specialty the hospital would like to offer, but the frequency of that service does not warrant a fully staffed department, then working with an outside entity can be valuable. Due to the provider’s deep expertise, the ability to leverage economies of scale, and incorporating best practices gleaned from other relationships into day-to-day operations, the external provider is able to deliver top-notch care at a lower cost than the hospital could if it kept the service in house.
Depending on the arrangement, patient satisfaction could go up as well, especially if organizations can shift care out of the acute setting and into the home. Provided the quality remains high, it stands to reason that more patients would prefer to be treated in the home, if possible. Having arrangements where that can happen would increase patients’ positive perceptions of the hospital.
“The bottom line is that the nature of health care is changing, and hospitals and health systems have to do things a bit differently than what we’re accustomed to in terms of quality, cost, scale, and patient expectations,” says Robert S. Shapiro, CFO for Northwell Health in New York City. “It’s a different world, and it’s time to recognize the change and embrace it.”
Strategies for Building Post-Acute Partnerships
Although every arrangement is different, there are some key steps organizations can take to set the stage for success.
Assess cultural alignment. As with any affiliation, the more a hospital’s culture and values align with a post-acute provider’s, the stronger the relationship will be. As such, it is essential to evaluate how the two cultures will mesh before starting down the path to partnership. This may involve meetings between organization leaders or on-site visits where hospital representatives observe how post-acute staff approach the patient encounter and enable continuous high-quality care.
“We have never launched a partnership with an organization that had a culture we felt would not blend in with our health system,” Shapiro says. “It always starts at the top: The CEOs must be on the same page. If the leadership doesn’t work well together, then the partnership can fall apart. Sometimes it’s helpful to be direct and say, ‘OK, this is what we want to do. Let’s sit down together and figure out what you agree with, what you don’t, where there should be changes, and who should be in charge of making those changes. It involves a lot of listening, as well as discussion. That’s what makes these relationships work. If, during these conversations, you can’t reach an agreement, then it’s best to just walk away—sometimes the timing isn’t right or the objectives don’t fully align, and that’s OK. Better to find that out early while you can still extricate yourself.”
When selecting a potential partner, it can be a good idea to start by reaching out to known organizations. “Perhaps you’ve worked with the entity before, or it has a reputation in the community,” says Shapiro. “The more you know the organization and are familiar with its strengths and weaknesses before you start the relationship, the easier the partnering process becomes.”
Some specific things to keep in mind when getting a sense of a post-acute provider’s culture is the organization’s commitment to quality, cost reduction, transparent communication, data sharing, patient-centered care, use of technology, and so on.
Hospitals should also assess whether the organization is self-aware and regularly reviews its own performance. Although the health system will want to monitor the potential partner’s performance as well, the post-acute provider should be doing its own assessments, proactively bringing forward issues that may be of concern. When an organization is committed to continuous improvement, it can be an indicator that the partner is receptive to change and implementing best practices.
Consider a joint partnership. Although there are many ways to set up agreements with post-acute organizations, some of the strongest tend to involve joint ownership and joint representation on the board. In these instances, the health system can be more directly involved in the provision of post-acute services while relying on the partner’s experience in the space. In these arrangements, leadership roles are often clearer because they are usually 50/50.
That said, less formal relationships can also be beneficial; however, both organizations must be intentional about how they stay focused on their shared strategic goals. There must be executive buy-in from both sides of the agreement and detailed guidelines on how the partnership will proceed.
Establish expectations up front. “A crucial step in creating and maintaining these kinds of arrangements is to be transparent about expectations,” says Vincent Pryor, executive vice president and CFO for Edward-Elmhurst Health, a three-hospital system based in Naperville, Ill. “You want to be clear about the clinical outcomes you’re looking for, as well as how you want patients to be handled and treated. It’s not just about the clinical processes and procedures but also the total patient experience.”
To adequately set expectations, there should be a good deal of up-front communication and then frequent monitoring and collaboration throughout the relationship. “It’s critical to establish feedback loops so each organization can give and receive feedback on what’s working, where there are concerns, and how they each can improve and enhance the system for the patients they serve,” Pryor says. “It’s also important to look beyond merely defining what the post-acute provider can bring to the table but outline what your organization can as well. For example, if my hospital is going to work with an institution to drive efficiency, then how do I make sure that there are a greater number of patients coming to the post-acute facility’s door? In other words, if we’re trying to drive more costs out of the system, how do we provide more patients to our partners so they can make the arrangements financially viable? In the future, this may come down to narrowing our network, but we still must stay within the Center for Medicare & Medicaid Services’ rules of choice and provide options to our patients. Right now, we can tell patients who we’ve partnered with and let them know we have a degree of comfort and confidence with those providers, but we still must offer choice outside of our preferred network. That’s where the challenges come in.”
Organizations should also decide how frequently they are going to meet to discuss issues and proactively mitigate risks. “We meet with all of our post-acute providers,” Pryor says. “We have formal leadership meetings on a quarterly basis to go over metrics and general trends, but then direct care staff meet with post-acute care providers on a weekly basis to get feedback on specific patients and talk about concerns on both sides.”
Define metrics. A vital part of establishing expectations involves defining key performance indicators (KPIs) that both organizations can use to gauge whether their relationship is working. These can be measures that are nationally benchmarked or ones the two parties create on their own. Either way, both entities should agree on measure definitions before starting to collect and compare data.
The advantage of widely accepted measures is that they can be compared to a national standard. Not only will this allow organizations to track their performance over time, but they can get a sense of where they fit compared with their peers. Note that if a post-acute organization meets or exceeds the national average, that may be a good indicator of the quality of care the organization provides.
In some cases, there may not be an appropriate benchmarked measure available, and a hospital may have to work with the post-acute provider to identify the right criteria for assessing performance. In this instance, both parties may want to come together for a whiteboarding session to determine which metrics would best reflect the relationship. As long as both parties agree to the definitions and collection methods, they should be able to effectively compare data.
Depending on the nature of the partnership, the measures will differ. Skilled nursing facilities, for example, will have different measures than home care organizations, and there will also be various ways to assess the performance of specialty care organizations that focus on one type of care, such as dialysis or infusion services.
That said, there are some common measures to consider.
Length of stay (LOS). If there is a smooth transition between hospitals and post-acute providers, the hospital’s LOS should go down over time. Checking to see if the skilled nursing facility’s LOS has dropped is also valuable—particularly for organizations that are participating in bundles. Overall, a shrinking LOS could be an indicator of efficiency, care quality, and safety and security.
Acute care readmissions. As mentioned before, hospitals are concerned with limiting the likelihood that patients will unexpectedly return to the hospital. Keeping an eye on this metric is key to seeing if that aspect of the relationship is working.
Volume of patients sent to the emergency department (ED) within three days after hospital discharge. This measure digs a little deeper into the effectiveness of care transitions. If there is a poor transition or things get lost along the way, there is a much greater chance that the patient will end up in the ED shortly after admission.
Infection rates. This can be an indicator of patient safety and care quality.
Patient satisfaction. “No matter what relationship you are in, you want to make sure that patient feedback on the experience is positive,” says Edward-Elmhurst’s Pryor. “This information can come through surveys, focus groups, feedback lines, and so on.”
Time until the start of care. For agreements with home care agencies, it may be helpful to collect information on when the agency begins care. Not every patient discharges during the week between 9 a.m. and 5 p.m., so hospitals should be sure that their home care partners are beginning care within 24 hours of discharge, even if that means starting on the weekends.
Response time. This is another valuable home care metric. When a patient calls an agency, the organization should respond within two hours. Not only does this demonstrate how quickly the organization can intervene, but it also may be an indicator of how well the organization avoids ED visits. If a home care agency is prompt about responding, it can often intervene before the patient’s condition sours to the point that an ED visit is necessary.
Accepting patients within one hour of request. Some hospitals require potential partners to commit to accepting a patient within one hour of referral. This prevents post-acute organizations from tentatively accepting patients and then dropping them when they receive a more straightforward case.
Cost of care. This is sometimes a hard measure to collect, but organizations that can gather the information get a sense of the value of the post-acute service. If the quality is high, acute readmission rates are low, and the cost of care is low, then that demonstrates a high-value partnership.
After deciding what to collect, the hospital and post-acute provider should agree on collection frequency and methods of communicating the information. It’s important to achieve a balance between staying on top of performance and overburdening staff with too much data collection. Also, when thinking about how to communicate information, organizations should consider ways to make the data visible, easily understandable, and informative so leaders can quickly identify issues, possible risk points, potential solutions, and so on. An electronic dashboard may be an ideal solution for communicating data.
Gain buy-in from staff. To realize a successful long-term partnership, organizations not only have to be committed at the leadership level but also must gain buy-in from front-line staff. Physicians, nurses, and other direct care providers must be familiar and confident with the post-acute partners and aware of the value they bring. “To get staff on board, you need to begin and end discussions with the fact that you all want to do what’s best for patients, and that the post-acute organizations with which you have relationships will be fully capable of sustaining high-quality care and doing what’s in the patients’ best interests,” Pryor says. “That message has resonated well with our staff and physicians. It’s also about being transparent about the numbers. Demonstrating that not all post-acute providers are alike and that there is significant variation between them will reinforce the point that it is valuable to limit the variation to produce better outcomes. We don’t expect our employees, staff, or physicians to do something without understanding why. So, we try to be transparent about the rationale, the benefits to patients, and the outcomes we’re trying to achieve.”
Embracing the Idea
Post-acute partnerships are no longer something that’s nice to have—hospitals and health systems that hope to effectively function in value-driven arrangements, avoid penalties, improve quality, and reduce costs need to get on board with these types of ventures. By seeking organizations with similar values, setting expectations, defining performance measures, and keeping lines of communication open, hospitals and health systems can be successful in these relationships, which ultimately benefits patient care.
About Option Care
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