Three drivers behind the healthcare delivery transformation

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Kelly Richard, MPH, Consultant, Business Advisory Services, Slalom Consulting

Due to soaring healthcare costs over the last decade, there’s been a large shift in where care is delivered – no longer strictly in the inpatient (IP) setting of the hospital. Providers are embracing a number of trends and methods to lower the cost of care and steer patients to receive care in the outpatient (OP) setting – or even at home or on the go when possible. Also, health information is readily available online and accessible virtually anywhere through mobile apps on smartphones.

Below are three drivers in healthcare that are behind the shift in healthcare to non-traditional settings:

1. Reducing length of hospital stays and readmissions

The most expensive – and traditional – setting where care is delivered is the inpatient short-term acute care hospital. While hospital utilization is often unavoidable, providers are making significant efforts to reduce unnecessary length of stays and avoidable 30-day readmissions. The high cost of keeping a patient in the hospital has led to programs like ACA’s Hospital Readmission Reduction Program (HRRP), which penalizes hospitals with high 30-day readmission rates by reducing CMS reimbursement. Research shows that the HRRP has been effective in driving hospitals to reduce 30-day readmissions. This incentive alignment among providers begs the question of how hospitals are addressing long lengths of stay and high readmission rates. This question can be answered by focusing on the transition of care from the hospital to the community.

Ancillary care facilities like skilled nursing facilities (SNFs) and long-term acute care hospitals (LTACs) have been instrumental in developing strategies for successful transitions of care. Skilled nursing facilities (SNFs) are short-term sub-acute care facilities, serving as a midpoint between the hospital and the home. Another provider type that traditional hospitals are using to achieve better outcomes and shorter stays are long-term acute care hospitals (LTACs). These are important because they allow patients who need more intensive care to be discharged from the hospital to a lower cost-of-care setting with better reimbursement before returning home.

SNFs/LTACs can be excellent tools for transitioning a patient back home from the hospital. However, as an additional provider in the care continuum, they add complexity to the communication and patient data sharing required to achieve positive patient outcomes. Poor communication between the hospital and the SNF/LTAC frequently becomes a barrier because facilities don’t always receive clear and complete discharge instructions.

Providers have started partnering with or even acquiring these sub-acute care providers to improve transitions of care. Some providers have entered into contracts with SNFs/LTACs, wherein the SNF/LTAC and the hospitals are both financially incentivized to reduce hospital readmissions through value-based risk contracts. In other cases, SNFs/LTACs may not be directly financially incentivized to work toward readmissions reduction, but by having low readmissions rates, they become a preferred provider of a health system and are able to gain market share. Once SNFs/LTACs are incentivized to reduce readmissions, hospitals and SNFs/LTACs must work together to achieve results. Some providers have focused on the hospital-to-SNF nurse hand-offs and providing more usable data than is available in the discharge summary. Other programs also provide a coaching program for patients and family members to address issues arising in the transition from the SNF to the patient’s home. Some hospitals have taken on the challenge of transitioning the care of the patient from hospital to home through care management programs utilizing care management tools. Houston Methodist Hospital used a hybrid model, leveraging a care management system called Midas to assess readmission risk for patients during their stay. They then provided tailored interventions addressing that risk with a transition coach. A transition coach is often a nurse who will contact the patient after they leave the facility to ensure they are complying with medication and discharge care instructions. Houston Methodist was able to effectively improve their 30-day readmission rate with the help of this program and its supporting technology.

Providers that have most effectively partnered with SNFs to reduce readmissions have used technology to do so. Providers in financial arrangements or in preferred provider partnerships with SNFs often share EMR data with their SNF/LTAC partner. Furthermore, sub-acute care providers are more likely to be chosen as preferred providers if they’re tracking key performance metrics, including 30-day readmissions, average length-of-stay, nurse-to-patient ratios, safety measures, and patient satisfaction. Those performing well on these measures, as well as those who have leveraged patient engagement tools, are the preferred providers for major hospitals and health systems.

2. Preventing hospital visits altogether

In addition to shortening hospital length of stay and reducing readmission rates, providers are also working to prevent avoidable visits to the hospital in the first place. When looking at where to quickly move the needle on hospital utilization, providers often initially focus on a small population of high-utilizers – the chronically ill. This population typically has complex health issues with one or more co-morbid conditions, resulting in frequent visits to the emergency room and, potentially, inpatient admissions. Keeping these patients out of the hospital requires robust care management services, using a case management team to coordinate routine care, often from multiple providers. For case management staff, the care management technology discussed above has been essential in meeting this population’s needs.

While providers are doing their part to appropriately coordinate the care that’s delivered to these patients, pharmaceutical and medical device companies have contributed to the shift in care-setting through technological innovations in therapies and devices. For example, patients with diabetes can use continuous blood glucose monitors that track their blood sugar levels, enabling them to identify patterns and change their behavior to avoid major fluctuations and medical events. Providers can download this data and refine their therapy plans. End Stage Renal Disease (ESRD) patients can opt for peritoneal dialysis (PD) performed at home or at work in lieu of traditional dialysis which requires the patient to travel to a dialysis center. Some PD products walk the patient through using the device safely via voice commands and touch screens. These devices also have the capability of sending data to a portal where their provider can remotely monitor the treatment. These technologies give patients more flexibility to live their lives without compromising their care compliance, ultimately leading to fewer avoidable hospital admissions.

The Emergency Departments (ED) of many hospitals also represent a huge opportunity to redirect care to a less costly setting. Health systems, particularly those at financial risk for their population’s cost of care, have employed a number of strategies to reduce unnecessary use of the ED. In some geographies, hospital systems have opened urgent care facilities, targeting patients who visit the ED due to the convenience factor, despite needing a fairly low level of care. For example, a parent who may have taken their child suffering from strep throat to the ER at 7:00 p.m., now has much less costly option in the form of an urgent care facility. In other provider networks or health systems, doctors’ offices are simply offering increased hours for patient convenience or directing patients to retail clinics in Walgreens, CVS, or Walmart. Communication and sharing data between urgent care centers, retail providers, and the patient’s primary care provider is key to seamlessly incorporating these new providers into the continuum of care.

Increasing access to care based on patients’ needs is one half of the equation. The other half is equipping patients with the information and resources to actually access care in these new settings, and Technology is often the answer. One example of a provider using technology to help direct patients to the appropriate care setting is Children’s Hospital Colorado. They have a mobile application called the ChildrensMD Symptom Checker. This app walks parents through the process of entering their child’s symptoms and deciding where to access care. It recommends an action in accordance with the appropriate care setting – call 911; call your child’s doctor now; call your child’s doctor within 24 hours; manage at home. The last option provides information to patients on what kind of care they should be providing for their child at home.

3. Health and wellness on the go

Symptom checkers are just one subset in the over 165,000 web-based applications for health. They represent a small portion of the range of capabilities and healthcare services that can be accessed from a smartphone. Despite the spectrum of legitimacy regarding information that can be accessed on the internet, a number of symptom checkers have been deemed useful in providing diagnoses and in triaging patients to the appropriate level of care. A Harvard study found DocResponse to be the most effective of 23 apps evaluated. While symptom checkers should never be a replacement for professional medical advice or treatment, they embody a consumer demand for health information and services at their fingertips. Health applications have been developed to provide tailored health information to the user based on health conditions. A number of applications exist to provide support and education to patients regarding specific health needs like pregnancy; weight loss; and mental health issues, such as anxiety. All of these apps serve as educational tools for patients, enabling them to access personalized information on-demand. 

Telehealth – when patients access providers remotely – has experienced a recent breakthrough due to reimbursement policy changes, the population’s wide-spread access to smartphones, and cost/access challenges to care. Telehealth is particularly important for patients seeking behavioral health services as well as for those in rural areas of the country where physician shortages are most pronounced. Telehealth may be the most obvious example of how technology can enable care outside the walls of a hospital.

Bottom line

Healthcare delivery is undergoing a major transformation in the United States. There are pressures on providers to improve quality and reduce costs through (1) minimizing length of hospital stays and short-term readmissions, (2) avoiding unnecessary visits to the hospital altogether, and (3) providing care that is accessible and convenient to the consumer. The success and evolution of these efforts are dependent on innovations in technology. Providers will be continually faced with the challenge of providing better care more efficiently, and those who meet patient needs with creative solutions and wise technology investments will undoubtedly come out on top.

ChildrensMD Symptom Checker, Hospital Readmission Reduction Program, HRRP, long-term acute care hospitals, LTAC, readmissions, skilled nursing facilities, Slalom Consulting, SNF, Telehealth


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