Thriving in Healthcare’s Value-Based Future

Under a unique arrangement with the Centers for Medicare and Medicaid Services, Maryland hospitals are paid based on the population they serve rather than on admissions. The goal of this groundbreaking plan, which launched in 2014, is to improve patients’ health and curb costs by reducing readmissions and enhancing the quality and coordination of care.

Carroll Hospital, in Westminster, MD, has been operating under that arrangement since 2010, when it became one of 10 hospitals to pilot the new reimbursement program. Today Carroll has one of the lowest readmission rates in the state and a host of new and expanded programs to improve patient care and well-being beyond the hospital.

At the helm during that dramatic transition was President Leslie Simmons, RN, FACHE. “It was not a phased process,” says Simmons. “When we signed up for the pilot, it just went live on July 1. So we spent the first year getting our feet underneath us.”

How did Carroll Hospital make the transition successfully, and what advice does Simmons offer to other healthcare executives facing a similar challenge?

Changing Mind-Sets From Volume to Value

“It really is turning the ship on a dime,” says Simmons. “You’re telling clinicians that more volume is not good. It used to be, when a patient was admitted to the hospital, we did a great job while you were here, and when it was time for you to be discharged, we gave you good discharge instructions and hoped for the best. If you ended up back in the hospital, we were here to take care of you again.”

Under the new model, readmissions are seen as missed opportunities with patients and represent a financial cost to the hospital. So, Simmons says, she and her team also started looking at readmissions as failures—of the process and to the patient. “We asked, did patients have their prescriptions filled? Did they know how to take their medicine? Could they get a follow-up appointment with their doctor in a fast manner? We became very invested in your aftercare as well as your hospitalization.”

That examination of where the process was breaking down led Simmons and her team to find new ways to keep patients on a path toward improved health. These included:

• Establishing a health navigator program, Care Connect, to engage patients with their care plans and connect them with ambulatory and social support services;
• Stationing case managers in the emergency department 24/7 to identify high utilizers and connect them with health navigators and community services;
• Developing a partnership with local and state agencies to leverage community and hospital resources to help behavioral health patients better manage their illnesses.

Keys to Managing Change

Simmons cites several key elements that went into making the unprecedented change:

1. Communicate widely and often. Simmons held town hall meetings with staff, then went unit to unit, attending staff meetings and explaining how the hospital used to be reimbursed and how it would be reimbursed under the new model. She reached out to physicians, board members, patients and the community. “It wasn’t just a one-time event,” Simmons says. “People would stop me in the hall for months and say, ‘Do we want more surgical volume or not?’”

The change raised concern among physicians, who’d historically had more latitude in admitting patients and whose reimbursement was still based on fee for service. “Every time a physician would try to admit a patient who didn’t meet the qualifications, we’d have to explain why, tell them, ‘They can be handled as an outpatient or put in observation status,’” Simmons says. In some cases the hospital would admit the patient despite the budget impact. “I would never want a physician feeling like they can’t do the right thing for the patient,” says Simmons. A critical-care and emergency department nurse by training, she says this was one of many circumstances in which her clinical background was invaluable. “The physicians knew we wanted to make sure patients got what they needed, and they trusted I knew what that was.”

The nursing staff also had concerns: If the inpatient census dropped, would the hospital need fewer nurses? But Simmons had a strategy in mind. “We were able to redeploy some of the nursing staff as care navigators and coaches,” she says. In the end no nursing jobs were lost, and the nursing staff’s fears were allayed. “I knew if I could just get them to understand that this is where healthcare is going and be part of retooling themselves, they could get excited about the work. But that was definitely part of the transition,” Simmons says.

2. Identify a champion to lead the change. One of the first things Simmons did was create a new position, vice president of clinical integration. In that role she placed Sharon Sanders, RN, BSN, MBA. “At the time nobody knew what a VP of clinical integration was,” says Simmons. “Sharon didn’t have any peers to call in the industry to say ‘How do you do this job?’ I just knew I needed a senior nurse who would get a seat at the table with our other community providers to understand what we needed to put in place to help people once they’re discharged.”

3. Connect with the community. Simmons tasked Sanders with building relationships with community agencies, to find out how the hospital might better support programs already in place or build new programs to fill needs. Simmons, who has shared Carroll Hospital’s transition experience and strategy with her peers at AHA conferences, urges other healthcare leaders to do the same. “Sometimes I get feedback that it’s easier for us to do this because we’re the only hospital in our county. But I don’t accept that,” she says. “Put yourself out there and see what you can do together that’s much more powerful for your community.”

4. Connect with other providers. In her role as vice president of clinical integration, Sanders established new processes to enhance coordination with other organizations that provide care to the hospital’s patients. “I have navigators going out to each of the nursing homes and participating in care-coordination rounds,” says Sanders. “We’ve also pulled our long-term care facilities and assisted-living facilities together and shared best practices with them. We share their readmission rates. And we’re working on setting readmission targets and identifying the things they’ll need to get to those targets.”

5. Maximize existing resources; create new ones to fill the gaps. Carroll Hospital was already involved with two not-for-profit organizations that could play a role in reducing readmissions and helping patients get appropriate care: the Partnership for a Healthier Carroll County, a hospital-community partnership to promote wellness, and Access Carroll, a joint venture between the hospital, the county health department and the Partnership for a Healthier Carroll to provide free medical and dental care to uninsured low-income residents.

The hospital also had home care, palliative care and behavioral health services poised to play a role and was building a wellness center. But the key programs needed to help identify high utilizers, coordinate care and navigate patients to the most appropriate healthcare and social services had to be built from the ground up.

6. Invest in data and technology. “The hardest thing was data,” says Simmons. “We never had enough data.” Today a data analyst and an IT staff person sit on the hospital’s care integration team to provide essential information and support.

Uncharted Territory

The first year of the pilot was uncharted financial territory. So Simmons had her finance department give her periodic updates on how the hospital was performing compared the program’s global budget. “I could tell when the readmission rates might have been still too high,” she says. “I could tell before we added any new programs what that would do to our budget.”

Simmons also craved more data from physician offices—for example, were they following up with discharged patients? Did primary care doctors know what was happening with the specialists involved with their patients? Employed physicians had access to the hospital’s EMR, but a private doctor might still be using paper charts. “Our care navigators can track down information for us, but that can be a very manual process,” Simmons says.

At the same time, Sanders’ efforts to build collaboration with long-term care and assisted-living facilities faced similar technology challenges. “We didn’t have compatible EMRs, but we were able to give those facilities limited access to things they needed—like physician notes on the patients they were caring for—through our portal,” she says.

7. Monitor performance and allocate resources accordingly. Five years in, Simmons says they’re still making adjustments. At least one new program—a care-transitions program—got shuttered because it didn’t yield sufficient improvements. “I had two care managers tied up in it, and it didn’t touch as many lives as we anticipated,” says Simmons. “So I stopped it and invested those resources into chronic disease management, which has made a huge difference.”

The ‘After’ Picture

The transition was not without its drawbacks. For example, Simmons says the new payment model delayed the hospital’s ability to add new surgical specialties. “In the past we might have had the volume and been reimbursed based on that volume, so we wouldn’t have had to delay a decision like that,” she says.

There also were misunderstandings in spite of her communication efforts. “I still speak to groups who think the hospital is intentionally not admitting them. So it’s important to educate the community as to why these things are happening and let them know we have other mechanisms to take care of them that are high-quality and lower-cost to them.”

As for the hospital’s staff and clinicians, Simmons says they came around quickly once they understood the new model. “We’re trained to keep people well,” she says. “So it felt like a natural thing for us to be adding programs and services to follow up on what’s happening after discharge.” In the past the hospital didn’t have the resources to do that. But as its readmissions rate has declined, Simmons has been able to reallocate budget toward those efforts.

Ultimately, Simmons says she would never go back to the old way of reimbursement. When people ask, “I always tell them, ‘Absolutely not,’” she says. “It’s a challenge to be under this fixed revenue, because you really have to get creative. But you can’t say to patients and your community, ‘We’re invested in your health and wellness today, but not tomorrow if the reimbursement is different.’”

References

Maryland Department of Health and Mental Hygiene. Governor O’Malley and Lt. Governor Brown Announce Health Care Reform Initiative That Will Improve Health and Reduce Costs, https://dhmh.maryland.gov/newsroom1/Pages/GOVERNOR-O%E2%80%99MALLEY-AND-LT--GOVERNOR-BROWN-ANNOUNCE-HEALTH-CARE-REFORM-INITIATIVE-THAT-WILL-IMPROVE-HELATH-AND-REDUCE-COSTS.aspx.

Centers for Medicare & Medicaid Services. Maryland All-Payer Model, https://innovation.cms.gov/initiatives/Maryland-All-Payer-Model/.

Centers for Medicare & Medicaid Services. Fact Sheet: Two-Midnight Rule, https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-07-01-2.html.

MaryAnn Fletcher is a freelance writer based in Georgia.