Analysis: How overcoming some hurdles can help providers manage PAC spend

A new study in JAMA confirms what we’re hearing from participants in Medicare’s joint-replacement bundles, the Bundled Payments for Care Improvement Advanced (formerly Bundled Payments for Care Improvement, or BPCI) and Comprehensive Care for Joint Replacement (CJR).

According to a Kaiser Health News summary of the results, “People who were sent home with home healthcare services demonstrated the same level of functional improvement as those who went to a skilled nursing facility (SNF). 

Assessments examined their ability to walk and get up and down stairs, among other activities, the study found. And those who had home health services were no more likely to die 30 days after surgery (a very small percentage in each group).

“Overall, costs were significantly lower for patients who went home, while hospital readmissions were slightly higher, a possible signal that home healthcare services needed strengthening or that family caregivers needed better education and training.” 

Takeaway

Although this study focused on post-acute care (PAC) spend for joint replacement episodes, the findings could probably be applied to any number of common episodes of care experienced by Medicare beneficiaries. 

The Institute of Medicine estimates that if there were no variation in PAC spending, variation in Medicare spending would be reduced by 73 percent. Therefore, it’s not surprising that in the most recent analysis of BPCI results for hospital-initiated episodes, reductions in SNF spending were the largest source of cost reduction for episodes that experienced statistically significant savings, accounting for 70 percent of episode savings.a

The savings in BPCI came from both changes in PAC settings (substituting a discharge to SNF with home health) and reducing SNF length of stay. Given the opportunities, managing this area of spending is a necessary capability for health systems participating in risk-based models. 

Organizations that successfully manage PAC spend can consistently identify the most appropriate PAC setting based on the patient’s clinical need and goals and then discharge the patient to a high-value provider in the appropriate setting. However, several common barriers must be overcome related to data, stakeholder education, organizational culture, and integrated discharge planning for organizations to execute these two steps. 

Regarding stakeholder education, specifically for patients and their caregivers, successful health systems engage patients and their caregivers in care-planning discussions as early as possible. For scheduled procedures, this step takes place prior to admission. For medical discharges, it occurs as soon as practical. 

The goal of these discussions is to understand the patient’s goals, explain what the care team can do for the patient, and to start preparing patients for their next setting of care. In instances where a patient may have traditionally been discharged to a SNF, the conversation also offers education on the role home health providers play on the care team and serves to upskill the caregiver so he or she feels more comfortable supporting the patient.