Bundled Payment

Prepping for Maternity Care Bundles

January 9, 2017 11:36 am

Many healthcare leaders think episode-of-care payments make sense for maternity and newborn care, but few know how to make them work. Those at the forefront of this payment innovation share what they have learned.

An influential group of healthcare leaders puts it bluntly: The resources spent on maternity care services are not leading to the highest value.

Instead, there are too many Cesarean deliveries, too many preterm births, and too many early elective inductions, all of which increase the need for neonatal intensive care services. The infant mortality rate in the United States is higher than in 38 other countries. The maternal mortality rate has doubled in the last 30 years.

The Health Care Payment and Learning Action Network (HCPLAN), a collaborative group of private and public stakeholders convened by the Department of Health and Human Services to advance the use of alternative payment models, thinks the current payment system is partly to blame for the nation’s poor track record of maternity and newborn care. In a white paper issued recently, HCPLAN recommends the use of episode-of-care (i.e., bundled) payments to incentivize the use of evidence-based practices.

HCPLAN’s work group includes top executives from many major health plans, although payers thus far have been slow to push for maternity care payment reform. Devising a new way to pay for an episode that may last 10 months or more, involves a wide range of providers, and starts with one patient and ends with two is a daunting task.

But now that HCPLAN has published recommendations on how to get started, purchasers intend to jump on them. “We want to capitalize on the momentum,” says Brynn Rubinstein, senior manager for the Transform Maternity Care initiative at Pacific Business Group on Health (PBGH).

That group, representing Walmart, Boeing, and many of the nation’s other largest healthcare purchasers, hopes regional and national pilots to test episode payment for maternity care will start soon, because its members are not satisfied with the value they are getting. Combined maternal and newborn stays account for more than 20 percent of hospital stays—and the wide variation in costs does not correlate with outcomes.

“PBGH feels it’s the role of the purchaser and the employer to kind of pound the table and let plans know that the time is now,” Rubinstein says. “While there are many obstacles to navigate, they are all challenges that can be overcome.”

Providers and Payers in Partnership

Since 2008, Geisinger Health Plan, based in Danville, Pa., has been proving that the theory behind bundled payments for maternity care holds up in practice. The plan uses bundled payments for maternity care delivered at Geisinger Health System, where standardized care processes have reduced the total cost of care.

“If you decrease your early elective delivery rate and your C-section rate, you end up decreasing your NICU days and the other high-end costs that tend to happen to babies born too early,” says John Bulger, DO, chief medical officer of Geisinger Health Plan and CMO for population health for the health system.

That said, perinatal bundles are among the most complex in Geisinger’s suite of ProvenCare episode-of-care packages. The design team identified 103 unique best-practice measures that are tracked for every patient; if a mother begins her care with Geisinger in the first trimester, there are as many as 300 opportunities to deliver those measures to each patient. By comparison, Geisinger tracks 19 best-practice measures—and 40 opportunities to deliver them—for patients who receive coronary artery bypass grafts.

But standardization—a hallmark of care transformation—does work for maternity care, Bulger says. “It changed the culture in the obstetrics department to focus more on quality and focus more on processes of care—more on what they needed to do versus what they did not need to do,” he says. “Our early elective delivery rate has been essentially zero for six-plus years, and we saw our C-section rate go down fairly quickly as well.”

Physicians in the Lead

Like most maternity care leaders, Sean C. Blackwell, MD, chair and professor in the Department of Obstetrics, Gynecology and Reproductive Sciences at McGovern Medical School at UTHealth in Houston, thinks physicians must be the “accountable entity,” responsible for designing and directing maternity care and for dividing the payment among providers in the bundle.

That’s why his department—roughly 80 OB/GYNs who belong to a large independent physician practice—is in a two-year pilot with a Medicaid managed care plan that covers roughly half of all births in the Houston area. Finding the right mix of quality measures, payment incentives, and care protocols to succeed in a bundled payment contract is going to take time, and Blackwell, who also serves as chief of service for obstetrics and gynecology at Children’s Memorial Hermann Hospital, wants to figure it out.

Through the pilot, Blackwell (pictured at right) gained access to data about the actual cost of care for a given pregnancy. The data made clear to him that a truly cost-effective maternity bundle must also include ancillary costs such as laboratory testing, medication use, and fetal imaging, all of which have potentially high costs.

Another lesson learned: The actual spend on physician services may need to increase for avoidable—and expensive—hospital admissions and readmissions to decrease.

“Even though OB/GYN physician services may only represent 10 percent of the total cost of maternity care, the physicians are the captains of the ship who are making not only clinical care decisions that affect maternal and newborn outcomes but also decisions regarding utilization of services within the hospital,” Blackwell says. “Reducing the frequency and/or severity of preterm birth is by far the number one opportunity to decrease costs of maternity care and improve outcomes.”

Reducing unnecessary Cesarean deliveries is the second-biggest opportunity for improving health and reducing costs.

“Strategies such as adopting clinical pathways and managing lengths of stay all require physician partnership,” Blackwell says. “It is unrealistic to believe hospital leadership can do this unilaterally. If hospitals are going to successfully decrease the cost of their care, they must be aligned with their physicians and have shared incentives related to cost and quality.”

Beyond that challenge, the data disconnect between payers and providers will take some effort to resolve. For example, health plans tend to use quality measures that are relevant to their own reporting requirements but that may be unrelated to physician care or outside the control of the OB/GYN physician. Thus, physicians and payers must come to agreement on what constitutes high-quality obstetrical care and what measures are important. Both sides must compromise, Blackwell says.

“Many of the measures that are feasible to use will be imperfect or suboptimal, and measures that are more ideal may not be easily obtainable or laborious to assess and track,” he says.

During the first year of the two-year pilot, Blackwell’s group did not make substantial changes to care processes or focus on reducing costs of care. Rather, the year was devoted to gathering baseline data for quality measures and analyzing the payers’ data to understand the overall costs associated with maternity and newborn care so that a better care model could be designed.

“When you think of all the good things that doctors and midwives and nutritionists and diabetes educators and lactation consultants can do to improve outcomes, we have got to redesign the care and the payment model so those things are appropriately valued and people can invest in them,” he says.

Blackwell is committed to working through the many challenges associated with maternity bundles because he believes a bundled-payment approach will be widely adopted. But he doesn’t think it will be easy.

“The learning curve is just going to be tremendous here,” he says.

Health Systems in the Lead

Providence Health & Services, one of the largest not-for-profit health systems in the country, does not yet have a bundled-payment contract for maternity care, but it has spent the past four years getting ready for such an arrangement.

“Payment administration is a very challenging aspect of moving toward bundled payment,” says Laurel Durham, regional director of perinatal services, Providence Women and Children’s Services. “We’ve been focused on the clinical pathway as a first step in addressing payment reform.”

Based in Renton, Wash., Providence serves five western states. Midwifery care is offered throughout the system, but a unique midwifery model has been developed in the Portland area. Starting in 2012, the Portland midwife clinic began using its product development methodology to bring the Triple Aim goals to maternity care. 

“We found that we could incorporate group appointments and add doulas and social workers,” says Durham (pictured at right). “And we could have a team-based model of care that allows everyone to work at the top of their license. By focusing on the patient experience, we increased patient satisfaction while reducing cost.”

In 2013, Providence piloted its “pregnancy care package” in a single clinic in Portland. The package is designed to coordinate care from prenatal services through labor and delivery to the postpartum and post-discharge phases. The care team, which is anchored by certified nurse midwives, includes nurses, doulas, patient navigators, a consulting OB/GYN physician, and social workers. The pregnancy care package operates within Providence’s larger footprint in Oregon, giving patients easy access to the system’s services and resources.

During the pilot year, women served in the pregnancy care package model had a Cesarean rate of just over 20 percent, compared to a national average of 32 percent. In its first year, the pregnancy care package, which gives women options for pain management during labor, resulted in an epidural rate that was 23 percent below the national average, and just 1 percent of women had early elective deliveries. 

Durham believes the lower epidural rate can be attributed to two factors. “Rates were lower in part because these pregnancies were lower-risk and among women who wanted to have low-intervention births,” she said. “Additionally, the pregnancy care package provides the support these women need to achieve their birth experience goals.” The cost of services provided through the pregnancy care package was 15 percent less than in the traditional care model, while patient satisfaction scores were in the 98th percentile.

Since then, the pregnancy care package model has expanded to three women’s clinic locations and two hospital delivery sites, making it a convenient option for any woman living in or near Portland. Delivery volume has grown dramatically, and Providence continues to innovate to make the package attractive. For example, workgroups defined the scope of practice for doulas to support patients throughout the continuum of their birth experience, including a Cesarean section when necessary and postpartum. 

Even as they optimize their care delivery model, Providence leaders see the barriers facing payment reform. For example, doulas provide support to women who want nonmedicated births, allowing them to avoid epidurals. Although doula services are bundled into the pregnancy care package model, some health plans do not cover doula services outside of this bundled approach.

“We need to find a way to determine the value of navigators, doulas, and the integration of behavioral health services in maternity care,” Durham says. “Those are really important parts of pregnancy care, and it will be challenging for this to spread rapidly without addressing the value they provide, and subsequently, payment.” 

Another question: Although the HCPLAN workgroup and others recommend designating OB providers as the “accountable entity” that accepts a bundled payment for maternity care, Durham thinks that function can be handled by a health system, with OB providers leading the process.

“A health system can help provide the infrastructure many providers would need to manage a bundled payment model,” she says. “If they are paid and then have to allocate payment to others who were involved in the care, it becomes really complicated from a logistical standpoint.”

Lola Butcher writes about healthcare business and policy topics for several HFMA publications.

Interviewed for this article: Brynn Rubinstein, senior manager for Transform Maternity Care, Pacific Business Group on Health, San Francisco; John B. Bulger, DO, MBA, chief medical officer, Geisinger Health Plan, and chief medical officer-population health, Geisinger Health System, Danville, Pa.; Sean Blackwell, chair and professor in the Department of Obstetrics, Gynecology and Reproductive Sciences at McGovern Medical School at UTHealth, and chief of service for obstetrics and gynecology, Children’s Memorial Hermann Hospital, Houston; Laurel Durham, regional director perinatal services, Providence Women and Children’s Services, Providence Health & Services, Portland.


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