Tag Archive for: Innovation

The New Comprehensive Care for Joint Replacement Program (CJR) Begins; What Providers Need to Know

The Comprehensive Care for Joint Replacement Program, the first mandatory bundled payment program from CMS, began April 1. Under the CJR, almost 800 hospitals in 67 geographic areas will be partially at risk for all Medicare spending related to lower joint replacements (DRG 469 and 470), from initial admission to 90 days post-discharge. Hospitals’ performance will be compared to both their historical spending and regional spending levels, which regional spending becoming increasingly important over time. In addition to meeting target pricing, hospitals are responsible for meeting minimum quality and satisfaction measures. Here’s a breakdown the methodology:

CMS Bundle Payment Methodology

With responsibilities now extending beyond discharge, hospitals need to act quickly to understand the post-acute care process. Using that newly acquired knowledge, the challenge will be to reengineer care delivery outside of the hospital walls to optimize outcomes and reduce costs. According to an analysis by Avalere, 60% of hospitals will need to reduce costs in order to remain competitive with their regional competitors. Those organizations that wait to act could very well find themselves spending the next five years playing from behind, always trying to catch up with everyone else in the region only to find themselves continuously outpaced and losing money. As many analyses have noted, too, the vast majority of variation in LEJR payments occurs in post-acute care. As a result, post-acute providers must pay particular attention to their relationships with acute care partners during the CJR rollout.


(Analysis by DataGen)

It will no longer be sufficient for post-acute providers to compare themselves to others simply by looking at star ratings or occupancy. Instead, providers need to understand the current flow of Medicare patients from acute care partners through the post-acute journey, and begin benchmarking themselves against competitors based on rehospitalization rates, lower average lengths of stay, higher satisfaction, and access to preferred referral networks.

This example, from the Portland metropolitan market, shows post-acute flows from an area hospital. Using this information, PAC providers can better understand their competition and target hospitals that might benefit by referring more patients to their facility.

The April 1, 2016 start date has put pressure on hospitals to quickly ramp up. On the other hand, the fact that the first year (through December 31, 2016) has no downside risk may cause some organizations to take a slower pace understanding their downstream costs and challenges. This is a big mistake. Since the CJR applies to all hospitals in the geographic region, those that start early will have a continuing advantage over the life of the program.
As part of the CJR, CMS has waived certain restrictions on telehealth, gainsharing and patient support (including providing remote home monitoring technologies). PAC providers with extensive home health networks will be at a particular advantage to test out new technologies, such a tele-therapy, remote home monitoring, and active case management as an alternative to extensive skilled nursing stays and potential hospital readmissions.
For post-acute providers looking to excel in this new environment, here are some key considerations:


Without a doubt, the CJR is only the first of the mandatory bundles providers can expect in the near future. CMS will likely move very quickly to expand both the geographic reach and the DRGs of these value-based models as it looks to shift entirely aware from a fee-for-service-model. Post-acute care providers are a crucial component in the healthcare space, but they will only remain so by focusing on better outcomes at lower costs.


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?

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.

The Importance of Beautiful(ly Thoughtful) Questions

In 1943, Edwin Land, while on vacation with his family, took some photographs of his daughter, Jennifer. Like any good three-year-old, Jennifer wanted to see the results of the picture right away. “Why can’t I?,” Jennifer asked. This simple yet powerful question led Land and his company, Polaroid, to develop products that transformed the experience of photography.


Why, What If, and How

In Warren Berger‘s new book, A More Beautiful Question, Land’s story is one of many used to illustrate the importance of not only questioning (itself a lost art among adults and organizations) but in also asking the right questions (primarily why, what if, and how) as a catalyst to innovation. The power of questioning is already revolutionizing fields from marketing to technology startups, and although Berger’s book has barely been out a month, I suspect it will become one of the top business books of the year.

A More Beautiful Question is particularly timely for aging services, as a confluence of forces– from payment models to demographic needs to disruptive technologies– are bringing fundamental changes quickly into focus and now, more than ever, organizations need to deeply question the core tenants of their organization as a precursor for survival.

The why, what if and how questions form the triad of powerful, leading devices for questioning. For why questions, Berger recommends the following process:

  • Step back.
  • Notice what others miss.
  • Challenge assumptions.
  • Gain a deeper understanding of the situation at hand, through contextual inquiry.
  • Question the questions we’re asking.
  • Take ownership of a particular question.

Many providers today are struggling with declining reimbursement, razor thin operating margins, maintaining quality of care, and meeting the needs and wants of a quickly changing population. Why questions can be incredibly useful in asking, “Why are we providing this service line?”, “Why aren’t we meeting these needs?” and even “Why are we here?”

If why has “penetrative power,” Berger writes, “what if [has] a more expansive effect– allowing us to think without limits or constraints, firing the imagination.” Several organizations have used the what if question to create groundbreaking innovations in aging services already: “What if we stopped building bricks and mortar?” (The CCAH model), “What if we made senior centers as appealing as Starbucks?” (MatherLifeways Cafe Plus), and “What if we combined predictive analytics with remote monitoring? (HealthSense, HealthSignals, CarePredict, and several others).

The final crucial question, how, is where results are created. Berger points to a number of examples that highlight the value of fast prototyping (Eric Reis and the Lean Startup)  and test and learn (referencing Bloomberg’s pilot programs in NYC). Both of these strategies can be incredibly useful to aging services providers, who oftentimes think an idea to death before even launching a trial. For organizations that are able to test out new ideas and programming, it’s important to measure results carefully. Ask the question “Am I failing differently each time?”, Berger writes, drawing on IDEO founder David Kelley’s observations on the subject. This is particularly useful in responding to adverse events, as the lack of learning inevitable leads to policy creep: the tendency to respond to any event by writing a new policy or creating a new form.


Learning Organizations

I’ve heard many providers refer to themselves as “learning organizations,” popularized by Peter Senge, et al., in the book, The Fifth Dsicipline. The reality, however, is that very few actually embark on the journey to implement the disciplines necessary– systems thinking, personal mastery, mental models, shared vision, and team learning– mainly because they aren’t adept at questioning correctly.

One of the biggest reasons I love lean thinking is the emphasis on constant reflection and continuous improvement. Aging services providers, always already trying to do too much good work with too few resources and supports, tend to aggressively justify their current operations, values and faults rather than deeply question their core work. “We’re doing the best we can for our staff,” rather than, “How can we pay our staff a living wage?” “You have to move to assisted living to get services,” instead of “What if we built up services in place by leveraging other offerings?” This is unfortunate, foremost for its detrimental impact on persons served– and will likely be lethal over the coming years to organizations that can’t make the shift. (Polaroid, itself, is a great example of why learning must be constant, going bankrupt in 2001 after underestimating the impact of digital cameras.)



Peter Drucker, considered to be the father of management, famously consulted with organizations not by providing answers but by asking crucial, if sometimes rather obvious, questions. The power of questioning, as Berger lays out so clearly in his book, will indeed be one of the biggest differentiators in the field of aging services moving forward. There is great future need, for sure, but it will no longer be met by senior housing alone. The current explosion into remote monitoring, home and community-based services, and intergenerational communities is only the tip, and providers need to start now to build strong organizations suited for deep questioning.

Ready to get started? So are we!