Archive for category: Innovation

CMS Launches CCJR Bundled Payment Program for Hospitals and Post-Acute Care

The Centers for Medicare & Medicaid Services (CMS) recently finalized its rule for the Comprehensive Care for Joint Replacement Program (CCJR), a five year pilot program that will run in 67 regions across the country. Hip and knee replacements are the most common inpatient surgery for Medicare beneficiaries and can require lengthy recovery and rehab time. In 2014, there were more than 400,000 procedures, costing more than $7 billion for the hospitalizations alone, with the cost of surgery, hospitalization, and recovery ranging from $16,500 to $33,000 across geographic areas. This wide variation in cost, along with similar variation in quality and complication rates, led CMS to make the CCJR program mandatory for almost all hospitals within the chosen regions.

Percent of Spending by Type, MS-DRG 470

  • Index (hospital)
  • Post-Acute Care
  • Physician Services
  • Rehospitalizations
  • Other

The CCJR will hold hospitals accountable for cost variation and performance for the 90 day period beginning with the hospital admission for MS-DRG 469 and MS-DRG 470, inclusive of all related follow-up post-acute care and Part B spending.  The specific mechanism for payment places a high burden on hospitals to select high-quality, lower-cost post-acute care providers, and actively manage cases as patients move through the episode of care. While individual fee-for-service providers will continue to receive regular payments for services, CMS will prepare an accounting at the end of the year (beginning with year two of the pilot) of the actual spending versus the allowed spending based on a per-episode rate. Hospitals that exceed the allowed amount will see their year-end Medicare payment reduced by an equal amount, whereas hospitals that spend less are eligible for an incentive payment. In addition, CMS will set quality benchmarks that must also be met regardless of spending.

Many hospitals will struggle to navigate the post-acute care environment and select the most effective setting for patients. For post-acute care providers, this is a fantastic opportunity to provide leadership and guidance to local hospitals serving joint-replacement patients. PAC providers with extensive home health networks will be at a particular advantage, as this program provides an incentive to test out lower cost interventions, such a tele-therapy, remote home monitoring, and active case management as an alternative to extensive skilled nursing stays and potential hospital readmissions. For patients still within the 90 day window, skilled nursing facilities have the opportunity to provide a lower cost triage and stabilization environment for patients versus a repeat acute inpatient admission.

Initially, partnerships and narrow referral networks will likely be based on publicly available measures, like the Nursing Home Compare Five Star Rating System. This is only the beginning, however. As I’ve written before, narrow networks will soon give way to smart networks, built on actual value outcomes and cost data. CMS plans to share extensive spending and use data to eligible hospitals to help them navigate this new program before penalties begin to set in. Armed with this information, hospitals will likely shift their focus to outcome measures and quality factors that account for the biggest drivers of actual costs: least expensive setting, overall length of stay, functional improvement, and readmissions over the entire 90 day episode.

In the example to the right (taken from the Vantage Care Positioning System from Avalere Health), two area SNFs have significantly different LOS and rehospitalization rates, leading SNF A to cost more than $2,000 more per case, on average, than SNF B. As long as SNF B is able to maintain the necessary quality levels, hospitals will have a significant financial incentive to funnel patients to that location.

Going forward, there are additional avenues that offer even more potential to reduce costs and better serve patients, notably:

  • Respite care in assisted/ residential care communities, coupled with home health
  • Telerehab, with reduced frequency home health
  • Remote patient monitoring to increase security/ reduce risk for patients recovering at home
  • Incorporation of non-medical healthcare workers armed with clinical decision support and predictive analytics to guide services
  • Home care, meals services, and housekeeping support post-discharge to reduce risk of rehospitalizations or other complications.

The CCJR is likely the first of a new wave of mandated bundles from CMS, and may pave the way for similar moves by other payers. Hospitals, skilled nursing facilities, and post-acute care providers should view the joint program as a template to build upon in a value-based future rather than an aberration of fee-for-service to be minimized or ignored. Non-traditional players, such as home care, meal services, and other senior housing providers, should view the CCJR as a new market opportunity with significant growth potential ahead.

Wondering how the CCJR program will affect your organization?

Getting Started with a Performance Scorecard: “Nine Steps to Success”

With rapid changes to payment structures, increasing service demands from newer demographics, and fierce competition, aging services and long-term care organizations are turning towards more formal methods to drive strategy forward. Scorecards and performance dashboards offer a visual way to align strategic planning with management operations. This helps an organization organize work according to priorities and achieve strategic goals by creating transparent, measurable connections between programs, processes and people and their relationships with the mission, vision and strategy of the organization.

Commonly, scorecards are developed through a nine step process designed by the Balanced Scorecard Institute.

Step One: Assessment

The scorecard building process starts with a thorough assessment of the organization’s mission and vision, challenges, strengths and opportunities. Preparations also begin for the communication and implementation of the scorecard throughout the organization. Key questions to ask include, “Who are we serving and how?”, “What payment models can we expect going forward?”, and “How are we different from our competitors and other levels of care?”

Step Two: Strategy

Next, a strategic plan is developed based on the assessment findings. This three to five year plan lists specific goals to accomplish and high level strategies that will enable achievement.

Step Three: Objectives

The strategic elements developed earlier are broken down into strategic objectives, which are the basic building blocks of strategy and define the organization’s strategic intent. Objectives are first designed and categorized on the strategic theme level (aligned by perspectives), and then later merged together to produce one set of strategic objectives for the entire organization.

Step Four: Strategy Map

Next, the cause and effect linkages between the organization-wide strategic objectives are detailed to create a strategy map that showcases how the organization provides value to its constituents. The strategy map should answer two fundamental questions: ‘where is the organization?,’ and ‘why are we headed there?’




Step Five: Performance Measures

In Step Five, performance measures are developed for each strategic objectives. Leading and lagging measures are identified, expected targets and thresholds are established, and baseline and benchmarking data is developed.

Step Six: Initiatives

After developing measures, strategic initiatives are developed to achieve the strategic objectives. To build accountability throughout the organization, ownership of performance measures and strategic initiatives is assigned and documented.

Step Seven: Performance Analysis

In Step Seven, the implementation process begins by developing systems to get the right performance information to the right people at the right time. Automation, where possible, adds structure and discipline to implementing a scorecard, helps transform mountains of organization data into information and knowledge, and helps communicate performance information. In short, automation helps people make better decisions because it offers quick access to actual performance data.

Step Eight: Alignment

Now, the organization-level scorecard is cascaded down into business unit and department scorecards. Cascading translates high-level strategy into lower-level objectives, measures, and operational details. Cascading is the key to organization alignment around strategy. Team and individual scorecards link day-to-day work with department goals and the organization vision. Performance measures are developed for all objectives at all organization levels. As the scorecard management system is cascaded down through the organization, objectives become more operational and tactical, as do the performance measures. Accountability follows the objectives and measures, as ownership is defined at each level. The alignment process should be bi-directional, so that challenges and opportunities known at the ground level make their way up into higher level strategies.

Step Nine: Evaluation

Finally, an evaluation of the completed scorecard is done. During this evaluation, the organization tries to answer questions such as, ‘Are our strategies working?’, ‘Are we measuring the right things?’, and ‘Is this still the right track?’ The constantly changing nature of healthcare means organizations must continually re-evaluate strategy and execution to ensure success.

For a related overview on performance measures and balanced scorecards, see our earlier article: Balanced Scorecards and Key Performance Indicators in Long term and Post-acute Care

Smart Networks are the Future of Post-Acute Care: 3 Ways Providers Can Stay Ahead

As the rest of health has transitioned towards some form of value-based or quality-contingent payment (whether through the Readmissions Reduction Program, Hospital Value-Based Purchasing, Physician Quality Reporting System or Meaningful Use), post-acute care has anxiously waited on the sidelines. No longer. With the passage of the IMPACT Act, the extensive growth of ACOs and Bundled Payment for Care Improvement pilots, and growing sophistication of quality measures and data analytics, post-acute care providers are finding themselves increasingly in the spotlight to prove they can offer higher value outcomes over alternative providers or lower-cost settings.

For the past few years, both healthcare networks and consumers have relied heavily on the CMS Five Star Rating, which, as I and others have written about before, is an imperfect guide to quality. For hospital-led systems, rehospitalization measures are increasingly becoming an important marker of quality. In a recent Mcknight’s article, Steven Littlehale of Pointright describes the challenge of narrow networks based on just a few measures. Instead, he proposes using “smart networks” based on several outcome and process measures. Careport Health, a start-up based in Boston, is attempting to do just that.

With the impending transformation towards value-based payment models and smart referral and partner networks, along with growing sophistication on outcomes and measures, how can post-acute care providers remain competitive? Here are three areas to consider:

1. Build a high-reliability, outcome-based organization.

The days of focusing on RUG rates and pushing length of stay as high as possible are over. The five star rating system, while still important, will no longer be the key to acceptance by partner networks. Providers instead need to develop strong, consistent systems to provide high-quality care as effectively and efficiently as possible. Not only does this require a competent therapy team, but providers must also have engaged staff, from CNAs to housekeeping aides, who all contribute to the well being and satisfaction of guests. The need for resiliency means providers must adopt a holistic view of their operations, rather than relying on a few heroes to steer the ship. Information will need to flow continuously and seamlessly through the organization, enabled by technology but driven (and utilized) by capable employees. A culture of continuous improvement and rigorous root cause analysis is essential, which requires deep organizational investment in learning, problem solving, and engagement.

Investments in culture and institutional capacity will have a rollover effect as well: post-acute care providers  who position themselves as meaningful, exciting and challenging places to work will help stem the tide of turnover that has long plagued the sector, and provide a buffer against the growing shortage of direct care workers.

2. Invest in long-term relationship management.

Providers can no longer forget about guests after a discharge is complete– nor should they wait until admission before forming relationships. Instead, providers need to become sources of information about aging and care options for the entire community. They should also invest in interactive care coordination and follow-up technologies to ensure emergent needs and care challenges can be addressed before they become more costly. From call center-based coordination to remote monitoring technologies, the options are quickly growing.

This change to long-term relationship management is both a new challenge—and new opportunity—for providers. Utilizing their existing social services, recreation and transportation infrastructure, skilled nursing providers can quickly and effectively provide low cost, high value assistance to keep elders in their homes after discharge from a skilled facility.

Providers can also take the lead on facilitating care coordination between a guest’s primary care team and other needed resources, such as social services and supports offered through Area Agencies on Aging. Engaging elders in the community also provides natural referral networks for long-term or community-based care services the organization also provides.

3. Expand service lines to target newly available revenue streams.

Many senior housing providers have long stayed away from Medicare services because of the onerous regulations and increased complexity. Bundled payment and ACO models provide innovative opportunities to partner with or build home health agencies and provide high quality, inclusive rehab services in lower-cost-of-care settings. For senior housing providers, this can open up lucrative revenue streams while also providing needed resources to build clinical care capacity and resident offerings. By contracting directly with innovative ACO programs, providers can also avoid the hassle and uncertainty of Medicare billing, as well.

For hospitals and health networks, partnering with senior housing communities provides an ideal way to support a targeted, high risk population with minimal investment of resources. Using analytics and care coordination services like Care at Hand, Life2 and Caremerge, providers can seamlessly integrate expanded services into existing workflows and structures. Non traditional senior housing providers, such as HUD 202 buildings, can also tap into these new opportunities to expand revenue while reducing overall healthcare costs. For instance, housing organizations are partnering with ACOs to reduce hospitalizations– and capturing a piece of the savings. Senior housing providers are providing home care and meal delivery services to local neighbors– making money and building brand awareness. Assisted living communities are participating in bundled payment initiatives to manage chronic conditions in the community in exchange for health IT investments and care management support.

Change is quickly coming to the post-acute care space. This includes not only traditional providers, like skilled nursing facilities, but also assisted living and senior housing communities, home health and home care agencies, and ancillary service providers. Organizations should position themselves now to be an integral value-based partner with these new opportunities or risk being left with outdated service offerings— and empty buildings.

You can learn more about how eSSee Consulting helps providers and Health IT companies capture these new opportunities by visiting our Solutions.

Five Qualities of Role-Based Leadership

An important piece of adaptive leadership is the ability to apply different skill-sets to address different types of problems. Just as you (hopefully) wouldn’t use a hammer to fix a leaking pipe, you shouldn’t rely on one style or approach of leadership to meet every challenge. This complex understanding is oftentimes overlooked in leadership literature, where many authors propose more static models of “what a leader looks like.” In contrast, Ester Cameron and Mike Green, in Making Sense of Leadership: Exploring the Five Key Roles Used By Effective Leaders, propose a five quality leadership model that I find very helpful in understanding adaptive approaches. The five qualities they propose are:

  • The Edgy Catalyzer: Creates discomfort to promote change

    This quality is crucial when the status quo is an impediment to change or when an organization has become too complacent with its current structure and processes. By asking uncomfortable questions and pushing employees to examine held beliefs, the edgy catalyzer can help create a sense of unease that leads to a desire for change.

  • The Visionary Motivator: Focuses on engagement and buy-in to energize people

    A great deal of leadership literature focuses on the role of the visionary motivator in leading teams. This quality builds engagement and participation from team members and helps to create a coalition capable of moving change forward. Communication and positivity are essential traits of this quality.

  • The Measured Connector: Promotes a sense of purpose and connectivity between people

    Measured connectors work to align people with stated goals and targets. At times change can move uncomfortably fast, and this quality focuses on keeping team members together and committed. As organizations and care delivery systems become more complex, the importance of aligning not only internal employees but also external stakeholders grows.

  • The Tenacious Implementer: Focuses on projects, timelines, deliverables and targets

    In the article “What Leaders Really Do,” John Kotter creates a useful distinction between management work and leadership work. One common trap that leaders fall into, however—especially those skilled at building visionary coalitions– is failing to stick around and ensure that goals and projects are actually implemented. The quality of tenacious implementer is particularly important when managing the change required to implement regulatory fixes and large-scale IT projects, like EHRs.

  • The Thoughtful Architect: Envisions frameworks and system design to support needed change

    When working on system change or long-term strategic planning, leaders need to understand how to construct structural and process-oriented objectives to bring into existence an engaged vision. Indeed, many thought leaders are exceptional at building a strong coalition around a hopeful vision for the future, but then struggle to actually redesign an organizational structure or business line that brings this vision to life. The thoughtful architect quality is the most introverted of the qualities, and benefits from time to reflect and consider.

Cameron and Green constructed the following chart around some basic questions to highlight the differences between the qualities:

In considering the challenges facing your organization, different qualities of leadership are necessary in differing amounts to enable the organization to deliver the best results. Like many models of leadership, these five qualities are all considered “positive,” in the sense that they are all necessary to accomplish goals, though, as shown above, the amounts of each quality can vary considerably based on the specific aim. Put into the context of aging services, I’ve offered a visual depiction of the relative amounts of each quality useful in responding to the following challenges:

For each quality, too, there is a risk of using too much or too little of it, and it’s for this reason that I find the model most useful. The problems and challenges facing healthcare organizations today are myriad and diverse, and a one-size-fits-all model of leadership risks sacrificing the particular advantages of skills that might be necessary on one project but not on another. By understanding and embracing this complexity, adaptive leaders are much more effective in responding to a wide assortment of challenges and much more successful in leading a diverse range of change initiatives.

Building a Culture of Continuous Improvement with an Idea-Driven Approach

Ideas are the fuel of innovation, but many senior housing communities and long-term care operators struggle to engage their front-line employees in idea generation. This is both unfortunate and short-sighted. As Alan Robinson and Dean Schroeder note in their book, The Idea-Driven Organization, a steady stream of ideas can lead to competitive advantage, better service and higher quality—three things that aging services providers, now more than ever, must maximize. For nursing homes, an idea-driven culture is a crucial component to any successful QAPI program. For other providers, rapid growth and development is squeezing margins and increasing calls for enhanced regulation around quality and service.


Ideas are crucial to performance and quality improvement in long-term care

Generating Ideas

Generating ideas isn’t hard and it doesn’t have to cost a lot money. In fact, more employees will offer them for free. Why? Humans love to make things easier—it’s hardwired into our biology. In a typical workplace, however, rules, bureaucracy, and hierarchies all work to hamper employee engagement and reduce the flow of new ideas. An employee with too many ideas is often ostracized or, worse, accused of being trouble and offered the door. Other employees learn that it’s better to be quiet and keep ideas to themselves.

To break this cycle, build a culture where ideas are welcomed. Reward employees for sharing ideas. Create safe spaces when employees’ voices aren’t overshadowed by louder colleagues or discounted by management. (The nominal group technique can help with this!) Make it easy by ensuring that management spends time with front-line staff in their own work areas. When there, leaders should probe employees, ask questions and encourage contrarian views. Include idea generation and testing in job descriptions and performance evaluations to reinforce its value and importance.

Some organizations try suggestion boxes to solicit ideas. These rarely work; ideas becomes disconnected from their source, and are pre-judged to be undoable, or forgotten about in an ever-growing mountain of executive to-dos.  Instead of closed (or locked!) boxes, try open boards, instead, where ideas and follow-ups are shared openly. Open boards are also useful for aligning ideas with strategic priorities and organizational goals; list specific topics with known barriers or challenges on the board to help harness the wisdom of staff. Technology tools can be useful, too, such as idea management software and enterprise social networking tools.

Generating ideas in a nursing facility or assisted living is a team process

Managing Ideas

Generating an idea is only the first step. Once an organization starts to truly encourage an idea culture, it’s important to have a system to manage them. Countless idea programs fall into quick disuse as employees learn that the systems are of little value in enacting change.

Idea management takes energy and resources, but it shouldn’t be complicated or hidden from view. Track ideas openly, and allow for feedback, evolution and improvement. Many organizations limit the flow of ideas due to a lack of perceived bandwidth to accomplish goals. Instead of parking ideas or telling staff that there isn’t time to work on something, look for ways to enable and empower staff members themselves. While prioritization of ideas is important, of course, but don’t get trapped into creating so formal a system as to require every action be approved by three levels of management. Decentralization is key to an idea-driven culture. The vast majority of ideas should be tried and tested by front-line staff and supervisors, who are then supported in sharing both successes and failures.

There are many examples of organizations that have successfully done this, such as Ritz Carlton permitting any employee to spend up to $2,000 to make a guest happy. (Compare this to some nursing homes where staff struggle to have enough pens and thermometers.) Brasilata, described in The Idea-Driven Organization, authorizes front-line supervisors to spend up to 100 reals and managers up to 5,000 reals implementing an idea.

However the system is designed, the most crucial point is to not let ideas linger. Static action plans, known issue lists, and problem trackers that are not acted upon serve to stifle innovation and reassure staff members that the organization cares little about their ideas.

Here again, managing ideas through a visual board or an open, collaborative software system enables open lines of communication, frank discussions of challenges and impediments and innovative problem solving approaches.

Kaizen Idea board showing quality improvement ideas

Ideas Lead to Success

Lean organizations thrive on a constant, substantial flow of ideas. By building a culture that not only allows, but actively supports, idea generation, and then managing the flow in an efficient and transparent manner, companies can accelerate their improvement practices and develop a more robust and agile organization. When combined with a fervent improvement mindset, these organizations can far outshine their competitors.

Have more time? Listen to a wonderful podcost with Dr. Dean Shroeder & Dr. Alan G Robinson, authors of the Ideas Driven Organization, and visit their website, Idea Driven.

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