Challenges in Service Line Leadership in an Era of Healthcare Reform

The Patient Protection and Affordable Care Act (PPACA), initially enacted into law in March 2010, prescribed a path to roll out significant health care reform over multiple years. The constitutionality of PPACA was rigorously challenged in the spring of 2012, and the United States Supreme Court upheld its constitutionality with a vote in June 2012. Components of the law continue to face challenges, which in some cases have delayed its full adoption. The individual mandate requiring that health coverage be purchased or penalties assessed was to begin in 2014, but hangs in the balance as this article goes to publication. Likewise, the federal budget crisis continues, with elements of health care reform becoming the bargaining chips in the legislative battle. As a degree of uncertainty relative to the direction and pace of health care reform continues, one thing is certain…change has begun.  

The challenge for healthcare leaders is to not let the turmoil and uncertainty lead to institutional paralysis. Proactive cardiovascular service line leaders need to maintain a focus on the task at hand, effectively managing their program while providing excellence in patient care.

Quality focus 

Although the healthcare debate creates a distraction, leading organizations must find a way to remain focused. In our experience, an actionable strategic business plan can aid in providing this focus, while ensuring all team members have a clear direction in how to move the service line forward.  

The focus on providing quality care is essential and should not be assumed. What is right for the patient should be the center of every decision. Quality, safety, and patient satisfaction are emphasized in this new regulatory climate, and should be the focus of planning efforts, guiding the decisions that affect the direction of the service line. While maintaining a focus on patient care, programs must have access to credible data. Far too often, key quality data is not available, not reliable, or not shared. In order to improve the present state, it is very important that all members of the care team understand how they are performing in the present day. Key quality indicators are not necessarily uniform from program to program, and must be defined by key stakeholders in the service line, with a focus on the continuum of care. Looking at each patient experience as a full episode of care rather than just isolating the acute treatment portion is a mandate in the new paradigm of healthcare reform. Dashboards that provide a high-level snapshot of performance, along with the ability to drill down to granular details, if need be, can be very powerful when integrated into the service line management approach. In our experience, leading programs not only incorporate regular forums for the review of program performance metrics, but also act upon the information with a focus on continuous performance improvement.  

A return on the investment in sophisticated data management systems can only be realized when the data is evaluated AND utilized as the basis for an actionable performance improvement plan.  

Value-based purchasing

PPACA incorporated regulation defined within the value-based purchasing (VBP) program that is aimed at rewarding or penalizing programs relative to whether they have achieved quality outcome standards beginning in 2013. Through this program, providers will be challenged to demonstrate compliance with clinical care measures and patient experience thresholds. The baseline measure for providers has been established using data collected from July 1, 2009 through March 31, 2010. 

Through VBP, CMS can withhold up to 1% of the base DRG payment for hospitals by using a calculation that weighs the outcomes with a split of 70% related to clinical processes of care measures and the remaining 30% related to the patient experience, Hospital Consumer Assessment of Healthcare Provider Systems (HCAHPS) thresholds. Each measure is scored for achievement and improvement thresholds, and the higher of the two scores is used. The 1% that is withheld will fund incentive payments for hospitals that meet achievement and improvement targets during the year. The percentage withheld will increase to 1.25% in 2014.

Twenty measures have been identified for 2013, and will increase to twenty-four measures in 2014 and twenty-six in 2015. This is of particular importance to cardiovascular programs because the care of a cardiovascular patient is well represented in this mix of identified measures. 

Hospital reimbursement is facing significant risk for institutions that are not devoting resources to managing practice, documentation, and data collection processes that support the VBP measures. In 2014 alone, the incentive pool, representative of the 1.25% that is withheld, is estimated to total nearly $1 billion. Given the amount of revenue involved, this program has the potential to provide significant rewards to programs that are focusing efforts on improving clinical care processes and patient satisfaction.

Expanding the care continuum

PPACA includes provisions for the development of new models for care delivery through the implementation of Accountable Care Organizations (ACOs). This model is based on a provider-led organization that has a strong primary care base, caring for at least 5,000 beneficiaries. The ACO is incentivized to provide high quality care and reduce overall healthcare costs. Emphasis on the provision of evidence-based practice is a tenant of the ACO model. Quality measures within five (5) identified domains have been established and include: patient/caregiver experience, care coordination, patient safety, preventative health, and the at-risk population/frail elderly health.

Debate relative to the effectiveness and sustainability of the ACO care model continues. At this time, the initial group of pilot programs has accrued experience within several elected payment models. The involved providers have experienced significant challenges directly related to the cost associated with start-up and implementation of the ACO model.  

The continued implementation of the ACO care model will require service line leaders to think more broadly about their responsibility for the care continuum. As alluded to earlier, in the ACO model, the acute episode of care is just one piece of the big picture.  Accountability for care across a broader continuum will require linkages and care coordination with home care, skilled nursing, and community-based agencies, in an effort to effectively manage patient care and control costs.

Reductions in re-admission

PPACA established a Hospital Re-admission Reduction Program which requires CMS to reduce payments to hospitals with excess re-admission rates for patient discharges beginning in October 2012. Re-admissions within 30 days for acute myocardial infarction (AMI), congestive heart failure (CHF), and pneumonia (PN) were conditions earmarked in the ruling. The final rule for the program established a methodology to calculate an excess admission ratio for each condition, and this ratio is used to compare the hospital’s performance with the national average. The ruling also established a minimum number of records for each condition, and defined a three-year window for the data set. For example, the re-admission ratios for fiscal year 2013 are based on patient discharges beginning in July 2008 through June 2011. Accordingly, the look-back period for fiscal year 2014 is defined as July 1, 2009 through June 30, 2012.

The focus on AMI and CHF re-admissions has a number of implications specific to cardiovascular programs. Through this program, excess re-admissions will have an even greater impact upon the hospital’s finances. Calculations for the re-admission adjustment factor can result in an overall 1% reduction in base operating DRG payment for patient discharges in fiscal year 2013. This reduction increases to a 2% penalty in fiscal year 2014. Due to the defined look-back period, programs will be penalized without the ability to go back and affect the re-admission pattern and practice. For this reason, it is incumbent upon service line leadership to direct their efforts to affect current practice and re-admission rates. As part of this effort, the coordination of care between acute care providers and those beyond the hospital’s walls will become increasingly important.  

Ongoing management of patients at high risk for re-admission is a significant challenge facing providers today. This issue is further compounded when managing the care of patients with multiple chronic conditions. In a review of data analyzed by Medicare and Medicaid Services, it is clear that 37% of Medicare beneficiaries with four or more chronic conditions account for 90% of the Medicare hospital re-admissions. In addition, particular focus should be directed on patients with heart failure, stroke, and atrial fibrillation, as they represent conditions with the highest number of co-morbidities (Figure 1).

Penalties for readmission within 30 days are now a looming financial reality — the hospitals that have not prepared and devoted resources to the effort are more likely to be negatively impacted financially, at least in the short term. However, the good news is that it is not too late. Efforts today can change outcomes for patients and affect the future financial viability of your organization. 

Concluding thoughts

We have experienced significant healthcare regulatory change, and the pace of change is predicted to continue. One thing is certain — the political debate may be fierce, but the spotlight will continue to shine on health care quality and cost. As health care leaders, we must be focused on quality of care with the patient at the center of our decision-making processes. Successful cardiovascular programs will harness the talents of their administrative and physician leaders to create a nimble organization that is prepared to deliver, measure, monitor, and improve quality and cost.

Sue is a Senior Vice President at Corazon, offering consulting, recruitment, and interim management for the key hospital service lines of heart, vascular, and neuro specialties. To learn more, visit www.corazoninc.com or call (412) 364-8200. To reach Sue, email sheck@corazoninc.com.