Home Cover Story How to succeed with bundled payments

How to succeed with bundled payments

Strategies to get patients out of the hospital safely and send them home

March 2017

THIS JANUARY, hospitalists at the University of Miami Hospital were on the brink of pulling out of a preop clinic they had successfully staffed for years. The problem wasn’t any reduced need for the service. Instead, it was the money the clinic was losing due to the growing shift in health care financing from fee for service to bundled payments.

“As private payers around south Florida have bundled care ahead of Medicare, our preop collections have fallen by more than 40%,” explains Efrén Manjarrez, MD, chief of the University of Miami’s hospital medicine division. “The preop assessment, which we used to make money on, is now bundled into the perioperative and postop work.”

For months, the hospitalists pushed for an increased subsidy. What saved the day, says Dr. Manjarrez, was the health system’s realization that while the preop clinic does lose money, the hospitalists help the hospital do much better with bundled payments overall.

“When I go to the ED for an admission, I now ask patients what they see happening during their stay, so they start thinking about the bigger picture.”

cover faber 2017~ Andrew Faber, MD
Lakewood Ranch Medical Center

“We are seeing the sickest patients, and we’ve brought down the same-day surgery cancellation rate to 0.1%, which is miniscule,” he points out. Every surgery that isn’t cancelled and that has good outcomes is “another $10,000” that goes to the hospital’s bottom line.

Dr. Manjarrez’s experience may be a sign of things to come. Even with a possible repeal of the Affordable Care Act, experts predict that bundled payments are here to stay, simply because they save money. A study posted online by JAMA Internal Medicine in January, for instance, found that Medicare spends about 20% less on each uncomplicated lower-extremity joint replacement when paid for in a 30-day bundle.

Many hospitals and physician groups have been participating for years in the voluntary Bundled Payments for Care Improvement (BPCI) program, which allows providers to consider taking risk for bundles that cover a wide range of diagnoses.

And last year, the Centers for Medicare and Medicaid Services (CMS) rolled out a mandatory bundled payment program in 67 metropolitan areas for joint replacements. While that program has had a big impact on orthopedists, hospitalists report that many patients electing to have joint replacements are younger and healthier, so they often don’t fall under hospitalist comanagement arrangements with orthopedic groups.

But this July, the CMS plans to roll out other mandatory bundles—one for hip fracture repairs, a service that many hospitalists have owned for years,—and a cardiac bundle for 90-day episodes of heart attack treatment, bypass surgery and cardiac rehab. The cardiac bundle is slated to encomplass hospitals across nearly 100 metropolitan areas.

Complicating those rollouts, however: Tom Price, MD, the new Secretary of Health and Human Services, has voiced opposition to mandatory bundles. It remains to be seen if those bundles will take effect.

In the meantime, experts say that bundled payments underscore hospitalists’ value in coordinated, standardized care. But they also note that to succeed with bundles, hospitalist comanagement needs to become more targeted and sustained.

“The power of a bundled payment is that it gets people talking who never talked before because they are now all in it together,” says Winthrop F. Whitcomb, MD, a hospitalist and chief medical officer of the Darien, Conn.-based Remedy Partners, a national company that manages bundled payment programs. “These discussions are no longer nice-to-haves but must-haves.”

Enhanced relationships
Having robust discussions with surgical colleagues has certainly helped with bundle management at Baystate Medical Center in Springfield, Mass. That’s according to hospitalist Mihaela S. Stefan, MD, PhD, who directs the perioperative clinic and medical consultation program.

“In the past, we met with orthopedists maybe every three months,” says Dr. Stefan. But since the hospital started participating in the BPCI joint-replacement program several years ago, meetings are now held “once a month and are multidisciplinary, including anesthesia, hospital medicine, health care quality and post-acute care providers.”

That has allowed the clinicians to re-examine their care, says Dr. Stefan, not only to prevent readmissions but “to assess if we were ordering excessive testing and to look at what is happening with post-acute care.”

For one, clinicians figured out that the routine chest X-rays they were ordering were unnecessary.

“We moved the timing of the preop medical assessment from one or two weeks before surgery to four weeks.”

cover stefan 2017~ Mihaela S. Stefan, MD, PhD
Baystate Medical Center

They also overhauled blood management for joint-replacement patients. “We found that we were transfusing at 8, sometimes at 10 for some patients with vascular comorbidities,” she says. The strategies they have adopted have included preoperative assessment for anemia, tranexamic acid administration and more restrictive red-blood-cell transfusion protocols.

“We moved the timing of the preop medical assessment from one or two weeks before surgery to four weeks,” she says. “If we see the patient one week before, there is no time to optimize medical comorbidities.”

As Dr. Stefan and her colleagues wrote in a study posted online in January by the American Journal of Medical Quality, those combined interventions cut their number of transfusions for joint-replacement patients by 75%. Estimated transfusion-related savings for the hospital per year is $480,000.

Key personnel
Another central lesson Dr. Stefan has learned: the importance of having care coordinators as the link among hospitalists, surgeons, floor nurses, post-acute facilities and families.

She points out that the orthopedic group at Baystate that does joint replacements has “an excellent coordinator who is the heart and soul of the program.” That coordinator runs classes for patients before surgery and oversees them from the time they are scheduled for surgery to their discharge. “She is one important reason the elective joint-replacement group has such good outcomes.”

Mark Franciosa, MD, is a regional director of transitions of care for Sound Physicians. Hospitalists in many of the hospitals where Sound Physicians staffs programs are working through different bundles.

At each site, Dr. Franciosa notes, Sound Physicians employs a “TCRN:” transitions of care RN. Like Dr. Stefan, he believes such personnel are essential for successfully managing bundles.

“They play a very broad role from being at the bedside after patients are admitted to communicating with the family, and working with case management and physical therapy to help decide the next site of care,” he says. The TCRN also communicates with insurers, makes patients’ follow-up appointments and remains their point of contact post-discharge.

At Stamford Hospital in Stamford, Conn., nurse navigators employed by the hospitalist group have “become a huge asset to us” since the group began managing more than a dozen bundles under the BPCI program, says hospitalist director Maher Madhoun, MD.

“We started with one part-time person, but now we have two full time,” says Dr. Madhoun. Nurse navigators “basically walk the patient through the system,” working mostly with patients in bundles who are high cost or at high risk for readmission.
 “They make sure patients make their follow-up appointments and go through addiction counseling, even helping them renew their driver’s license,” he says. The group is also considering hiring an NP to be the contact person for SNFs on clinical issues related to patients covered by a bundle.

Mindset changes
The 40 hospitalists at Stamford Hospital have also shored up their interdisciplinary rounds. Every day, says Dr. Madhoun, they “talk about relevant social issues and barriers to a safe discharge.”

That highlights what Dr. Franciosa of Sound Physicians calls a “shift in mentality” that hospitalists participating in bundles need to undergo. “It’s a mindset change, acknowledging that the patient relationship does not end at discharge,” he says. “While doctors may work in the inpatient setting, they need to be concerned about post-acute care.”

For one, hospitalists can no longer just leave it up to case managers and physical therapists to decide if patients go home, to a SNF or to rehab.

“Hospitalists have to take a more active role in that conversation,” Dr. Franciosa says. Another challenge: Hospitalists participating in bundles can’t say it’s the nurses’ job—not theirs—to get patients up and ambulating or to help prevent patients from becoming deconditioned in the hospital.

“We want them to walk out if they walked in,” he says.

Hospitalist Andrew Faber, MD, the facility medical director of the TeamHealth Hospital Medicine group at Lakewood Ranch Medical Center in Bradenton, Fla., agrees. His program has participated in several BPCI bundles.

“I find when I go to the ED for an admission, I now ask patients what they see happening during their stay, so they start thinking about the bigger picture,” says Dr. Faber. “If a patient can’t breathe, obviously I’m not going there. But if there’s a son or daughter engaged, we tell them we have preferred post-acute providers—SNFs, home health agencies, primary care providers—who produce better results.”

This is also, adds Dr. Faber, “a great opportunity to remind patients and families that right-sizing care most commonly means returning home as expeditiously as possible.” (See “There’s no place like home.“) Furthermore, “bundled payments help focus the hospitalists on having palliative-care type discussions with families, even as early as in the ED. You can’t force anything on people, but you can open up that possibility.”

SNFists and gainsharing
The hospitalists handling bundles for CEP America, a national physician staffing management company based in Emeryville, Calif., are likewise improving their goals-of-care discussions with patients and families. They are also focused on reducing readmissions through integration with other practice lines including emergency medicine, the ICU and SNF providers.

Jeffrey Frank, MD, director of quality for hospital medicine, says the hospitalists now use risk-prediction tools to focus their daily case manager rounds on the patients most likely to be readmitted. Plus, “with bundled payments and the hospital readmissions reduction program,” says Dr. Frank, “you and your hospital are more likely to be comfortable having patients stay a day or two more in the hospital if that might prevent a readmission.”

Because the largest potential cost savings with bundled payments is in post-acute care, some CEP America groups have hired SNFists, while others have started telemedicine programs to remotely follow SNF patients. And in California, several CEP America groups have negotiated gainsharing agreements with hospitals (who are the episode initiators) to promote collaboration, prevent post-acute care costs and share any profits earned.

Those agreements are too new to know how profitable gainsharing will be. Under BPCI bundles, Dr. Frank adds, hospitalists still earn their professional fees, and they aren’t on the hook for losses.

“We don’t expect a lot in gainsharing agreements because we aren’t taking any risk, and that’s OK,” he says. “The opportunity to improve patient care is good for the patients and the hospitals.”

At Stamford Hospital, however, Dr. Madhoun says the hospitalists expect their first gainsharing payouts “sometime soon.” He points out that it helps physicians accept change when they may reap some financial reward. While the formula is complex, all the physicians— no matter their specialty, including outpatient doctors— are sharing profits equally because all contribute.

Looking forward
At the Medical College of Wisconsin’s Froedtert Hospital in Milwaukee, Barbara Slawski, MD, MS, hospitalist and chief of the section of perioperative medicine, says joint-replacement comanagement agreements with orthopedic surgeons there predate bundled payments.

But taking part in the mandatory joint-replacement bundle “has made a difference in terms of keeping us moving forward.” The perioperative team developed a collaborative, multidisciplinary model to improve outcomes in arthroplasty patients, which included an optimization protocol by the perioperative hospitalists. Over the first three years the protocol was in place, the team saw significant improvements in cost of care, length of stay, readmissions, venous thromboembolism rates and discharge rates to skilled nursing facilities.

Looking forward to the hip fracture bundle that may take effect, the hospitalists are working with anesthesiology and orthopedic surgery to develop protocols and standardize preop care for these patients. That includes deciding “what diagnostic tests we order or don’t order,” Dr. Slawski says.

The group is also setting up a hip-fracture pager group to ensure quick interactions and reduce surgical delays. With a pager group, the ED can call anesthesiologists, hospitalists and orthopedic surgeons at the same time when a patient presents. The team is also reviewing postop protocols, says Dr. Slawski, “so we can get patients out of the hospital efficiently and safely.”

Similar preparations are underway at North Carolina’s Wake Forest Baptist Medical Center, says orthopedic surgery vice chair Cynthia L. Emory, MD. Like some critics of the mandatory hip-fracture bundle, Dr. Emory worries that smaller hospitals will automatically transfer moderate- to high-risk hip fractures to academic centers rather than risk losing money under the bundle. Cutting door-to-surgery time is a way to expand the capacity she predicts her center may need.

In their longstanding comanagement arrangement for hip fractures, the orthopedists and hospitalists already decided to stop sending patients for routine preoperative electrocardiograms.

“There is rarely a cardiac condition that we can improve before urgent surgery, and advanced testing can even cause surgical delays,” Dr. Emory points out. “So why get the tests?” Hospitalist comanagement of hip fractures helped reduce patients’ length of stay by 1.6 days and increased the percentage of patients receiving surgery within 48 hours from 86% to 96% with no increased morbidity. Those data were part of a study Dr. Emory and her colleagues published in the August 2016 issue of Geriatric Orthopaedic Surgery and Rehabilitation.

Right-sizing the number of doctors
In Miami, Dr. Manjarrez believes his group will be in great shape to take on the cardiac bundle that may arrive this summer. That’s because the hospitalists have been admitting many of these patients—including those with acute MI—for years.

But the need to right-size the number of doctors in any given service is one key lesson he took away from his negotiations over preop clearances. His group used to staff that preop clinic with two hospitalists per day until they began risk-stratifying patients.

Now, young and healthy patients (think a 38-year-old woman on no meds coming in to have her tubes tied) have preop screens over the phone, while those with stable medical problems (high blood pressure on one medicine, for instance) are seen in the clinic by nurse practitioners.

The hospitalists, meanwhile, now clear only the sickest patients: those with coronary artery disease or cardiac stents, patients on blood thinners or dialysis, COPD patients and diabetics on insulin. As a result, they reduced hospitalist preop staffing 75% from two hospitalists a day five days a week to now only a half day (afternoons) five days a week.

The lesson learned, Dr. Manjarrez points out, is that succeeding with bundles in part involves “figuring out the right number of doctors for the right amount of patients with the right illness severity.”

Deborah Gesensway is a freelance health care writer who covers U.S. health care from Toronto.

There’s no place like home
THE GROWING PUSH toward bundled payments means a lot of changes for participating hospitalists, including a new role: convincing patients—and preparing them—to go home instead of to a post-acute facility.

According to Winthrop F. Whitcomb, MD, chief medical officer of the Darien, Conn.-based Remedy Partners, a national company that manages bundled payment programs, “The first question hospitalists should ask when they go to discharge patients is ‘Why not home?’ ” Orthopedic groups taking part in joint-replacement bundles have reaped big savings by being more selective about who is discharged home vs. sent to a SNF or rehab facility.

Hospitalist Andrew Faber, MD, who directs the TeamHealth Hospital Medicine group at Lakewood Ranch Medical Center on Florida’s West Coast, says his group has participated in several bundled payment programs. He and his colleagues definitely stepped up their “why not home?” discharge discussion.

Interestingly, he found that one group—elderly men—wanted to go home but without any trained support, and they were the single group most likely to be readmitted after a home discharge. “It didn’t matter if they were living alone,” Dr. Faber says. “They didn’t want a home health nurse.”

To break down patients’ reluctance, he explains, “We needed to come up with a different way to talk about it. We now say, ‘We are going to have a physical therapist come visit you at home, which you should think of as your own personal trainer. First, a home health nurse needs to come and go over your meds, but we want that personal trainer in your house.’ ”

Patients loved the idea, Dr. Faber adds, “and the acceptance rate went up a lot.” It helps that every provider in the hospital reinforces the message that going home is the best option. “There are probably lots of tweaks that could help propel more discharges home,” he says. “If we can get that rate up from 60% to 80%, that’s a lot of savings.”


Published in the March 2017 issue of Today’s Hospitalist
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