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Transcript

Erica: Hello, and welcome to another Avalere Health podcast. My name is Erica Breese, and I serve as a manager in Avalere’s Center for Payment and Delivery Innovation. I am joined today by my two colleagues, Stephen Scott and Colin Yee, also part of Avalere’s Center for Payment and Delivery Innovation. Our team has done extensive work on bundled payments in particular, including work with a number of clients who are participating in the Bundled Payments for Care Improvement (BPCI) and Comprehensive Care for Joint Replacement (CJR) model.

To start, I think we all know about CMS’ increased focus on shifting from volume to value. What is BPCI and how does this fit into this mission?

Stephen: The BCPI demonstration is a voluntary program sponsored by CMMI in which hospitals, physician group practices, and post-acute care providers accept clinical and financial risk for patients over specified episode time frames (30, 60, or 90 days post-hospital discharge). It’s a really important program to keep an eye on because it’s the first major program where CMS is putting providers at risk for episodes of care that include the acute and post-acute periods. We expect bundled payment models to grow. Most relevant, CMS just launched the CJR model, which is a mandatory joint replacement bundle for hospitals. BPCI offers some insight into what we can expect in that program and beyond.

Erica: What may be applicable to the CJR model?

Stephen: A recent study by the Kaiser Family Foundation found the hospital/physician-initiated episodes are achieving some real savings in BPCI but the post-acute care providers haven’t affected much change yet. Reminder CJR is a hospital-stay-initiated episode. For hospitals, there is a lot of low-hanging fruit in PAC management, and that’s where we’ve seen some more movement. A key advantage for hospitals is that you can change patterns of post-acute care discharge—for example, if historically a lot of patients were being sent to high-cost, post-acute settings then you may have a huge opportunity to identify more patients that can be sent to outpatient or home health and achieve some significant savings that way. We fully expect CJR hospitals to look for savings in shifting PAC discharge patterns and also reducing SNF length of stay.

Colin: It’s also important to note a lot of the BPCI success stories have actually been in the major joint replacement episode. We’ve seen some hospitals make substantial reductions in discharge to institutional PAC settings, SNF length of stay, and even readmissions for those procedures. I think the popularity of that episode in BPCI and some of the clear early successes were big reasons CMS implemented CJR as the first mandatory bundled payment program, in addition to the proportion of the total Medicare payments made related to joint replacement procedures.

Erica: Thinking about some of the challenging aspects of managing a bundled payment, what do you see as the most important capabilities providers need in order to do well under a bundled payment model? What will hospitals need to change to be successful under CJR?

Colin: Well, the first is probably setting up a really good foundation with data and analytics. Using new sources of historical data to analyze what happens outside of your facility, where your opportunities might be, is something we see providers getting better at once they have incentive under these programs. It’s the real-time data that’s a lot more challenging—integrating with other providers to track longitudinal patient data during an episode and use that data to intervene and improve care. This requires more predictive analytics, buy-in from providers outside of your organization, and IT solutions to integrate the data at the point of care.

Stephen: But even with great analytics, it’s tough operationally. You really need people taking ownership of a patient’s care over the course of an episode. Organizational culture and commitment is obviously huge, we certainly see this with our clients. From a personnel standpoint, the care navigator model is promising—having a clinical person to track progress/status and serve as a touch point for the patient and a connector between the various entities providing care. I think that approach as well as some of the remote monitoring and primary care solutions have really made a difference for some of our PAC clients. The ability to identify risks when a patient is vulnerable at home and direct them to the right level of care can drive improvement in downstream outcomes and utilization, which is a big challenge area.

Colin: That’s a great point. I’ll also add that the ability to create strong networks of provider partners is a key enabler. Hospitals and physicians are having more success doing that because they generally have leverage in their market. Still, a lot of what we’ve seen is a hospital simply pressuring a SNF to reduce the length of stay. That might address some of the low-hanging-fruit inefficiencies, but it’s not having a real impact on outcomes and may not always be best for the patients. The most successful networks are partnering on care transitions to prevent complications and delegating actual ownership for certain aspects of care management.

Erica: Those are all great insights. In wrapping up this podcast, do you have any parting words for our listeners?

Colin: A couple of parting thoughts are:

• This isn’t going away. We think bundled payments will expand in Medicare and also with private payers.
• The data are illuminating and you can’t do much without starting with some meaningful insights and goals. Affecting change at the point of care (and outside of your care setting) is much harder, though.

Stephen: I definitely agree. I’d also say that:

• PAC is a big opportunity that we’ve been very close to. Hospitals just haven’t had much visibility into that space—they haven’t had reason to pay attention. But bundled payments reveal some very big opportunities for them. Start working with PAC providers in meaningful ways.
• At Avalere we’ve been at ground zero with these bundled payment models getting underway, and we’ve seen that it really is a fundamental change for these organizations.