Business Solutions

The Process of Change

How the nature of hospital oxygen referrals is evolving, and how providers should adapt to that transformation.

• By Robert Messenger, Joseph Lewarski
• May 01, 2014

John Morley, the 19th century British statesman, said of evolution that it’s not a force, but a process. Like it or not, the Patient Protection and Affordable Care Act (ACA) has forced U.S. healthcare into a process of evolutionary change. In fact, virtually every component of the healthcare system is in a state of evaluation and change. Many of these changes are the result of more than a decade of legislative and policy initiatives aimed at reducing healthcare utilization and costs, specifically those associated with the government funded Medicare and Medicaid programs.

This has been exacerbated and accelerated by the passing of the ACA, which is the most significant healthcare legislation since the 1965 passing of the Social Security Act, which created the Medicare and Medicaid programs. Every area of healthcare is being impacted by the ACA.

For home medical equipment providers, it is the expansion of national competitive bidding and the increasing audit intensity. For hospitals, there are a number of initiatives but much of the current focus is on the hospital readmission reduction program (HRRP) and the associated financial penalties for readmissions within 30 days. As healthcare providers develop new strategies and tactics to survive in this new environment, one message is clear; everyone must figure out ways to improve outcomes while facing increased scrutiny and being paid less.

Shifting Focus

Quality and outcome of care are the focus of many of these new health policy initiatives. Since the acute care environment is where most clinical interventions start, much of the initial responsibility for quality and outcome rests with the hospital. Approximately 20 percent of all Medicare patients are readmitted within 30 days of discharge.1 The Centers for Medicare and Medicaid Services (CMS) has singled out “preventable hospital readmissions” as a multi-billion dollar savings target.

These potential savings are earmarked to help pay for many of the healthcare expansion efforts contained in the ACA. As a result, CMS has introduced the Medicare HRRP and all prospective pay hospitals are now held accountable for essentially unplanned readmissions that occur within 30 days of the discharge, even if the patient is admitted to a different hospital. The HRRP is currently focused on three major diagnoses or diagnosis related groups (DRG):

• Acute myocardial infarction.
• Heart failure.
• Pneumonia.
• Chronic obstructive pulmonary disease (COPD) has been added to the list of audited diagnoses, with the fi rst year measurement period beginning Jan. 1.

Hospitals must reduce their readmissions for these specific conditions to avoid a financial penalty, which is applied against all of their Medicare payments, not just the specific monitored conditions. The process works much like an audit: CMS focuses on 6 complex and high risk DRGs with the highest readmission rates (sample size), and then applies the findings and financial penalties to their entire book of inpatient Medicare business.

In this, the second year of the program (2014), the maximum potential penalty is 2 percent of the hospital’s total Medicare inpatient revenue. Interestingly, since the inception of the program, the average hospital’s actual penalty has decreased2, an indication that most hospitals have taken actions to reduce readmissions for the indexed diagnoses. To achieve these results, hospitals are focusing on improving a number of aspects of patient care, including:3

• Improving the acute-stay patient experience (i.e., better meals, more personable service).
• Providing patients with better education on managing their disease post discharge.
• Improving the discharge/transitional care process by ensuring patients have clear, understandable discharge instructions, along with the resources needed to continue their recovery at home, regain their health and stay healthy.
• Most importantly, they are collecting and analyzing data on what programs and initiatives are effective or ineffective.

It is this last point that alternate site healthcare providers should pay particular attention to. Although it’s impossible to predict the future, it seems reasonable to speculate that the information derived from tracking and analyzing discharge and readmission data will impact homecare and other post-acute care providers. Hospital penalties are based on achieving a target readmission rate and that target is largely based on the national average readmission rate; a rate that will keep going down as hospitals continue to refine their programs. Initially, even basic behavior changes and interventions may result in some reduction in readmissions. Consider this a bit of the Hawthorne Effect. However, over time, more structured and repeatable programs will be necessary for a sustained impact.

Hospitals are acutely aware that success will be driven by their ability to understand which factors are positively and negatively influencing their outcomes. To do this, they are collecting data, lots of data on all variables that can influence readmissions.4,5 These data include patient demographics, diagnoses, direct admit or via the ER, what nursing unit were they on, who was the managing physician, were they enrolled in a rehab program, did they receive patient education?

And that’s just on the inpatient side. Remember, this is a program that measures the ability to keep the patient out of the hospital. Post-acute care and community resources that impact patients following discharge are critical and will be measured. Nursing homes, home health agencies and likely even home medical equipment (HME) providers will be monitored and analyzed.6

Measured Satisfaction

Before data can be used to help direct care, it needs to be gathered in a standardized manner and in sufficient quantity to be statistically valid. Largely, that’s where many healthcare systems are today – the information gathering and analysis stage. Hospitals are applying significant funding and resources to help them mine information from existing files and to expand the collection effort to include information that has not been previously tracked.

Soon, hospitals will have enough information that they will be able to reliably identify the best and worst practices. This will include clinicians, departments, nursing units, clinical programs, SNFs, HHAs and DMEs. The best performing in each category will be identified, standardized and duplicated. When data yields evidence of poor outcomes, the practitioner, facility or provider will be evaluated, and if needed, replaced. Conversely, excellent performance and outcomes may be rewarded. For the HME provider, excellent service, care and outcomes might be rewarded with an exclusive contract.

Not every hospital will be collecting exactly the same data, and not all will be tracking the impact of HME referrals on outcomes. However, given the uncertainty of not knowing which institutions are measuring your performance, it’s safe to assume that you will be under the microscope. Hope is not a strategy. Instead, think about how your business can partner with the hospital to enhance their care models and reduce the potential for 30-day readmissions. If you’re looking to differentiate yourself and grow your share of the market, programs designed reduce readmissions and improve outcomes are a logical pathway.

Doing the minimum to remain compliant with laws, regulations and accreditation standards are just the table stakes to enter the game. Differentiation requires extra effort and some additional investment. A home oxygen program with licensed clinicians performing pulse oximetry to titrate the oxygen setting to ensure adequate blood oxygen saturation, the titrate to saturate method, is one example of a clinical differentiator. Although there are no objective statistics or significant published reports, there is some evidence suggesting that many home oxygen providers do not routinely provide this service.7

Also, there is ample published data and anecdotal commentaries regarding the technical and performance differences of the myriad portable oxygen and pulse dosing devices on the market. With pulse dose oxygen devices essentially a standard of care with active oxygen patients, there has been discussion, debate and some recommendations as to the need to perform oxygen titration. 8,9 In today’s environment, incorporating clinical education and evaluation can be a differentiator and lead to improved outcomes, reduced readmissions and lower overall cost of care.10

A number of innovative providers have already taking steps to reposition their business. Some are providing novel non-delivery oxygen technologies and promoting the benefits it may have on compliance, activity and improved outcomes. Many of those same providers are taking some of the savings obtained by improving their operational efficiency and using it to expand patient education beyond just training the patient on their equipment, including simple disease management.

You don’t need to develop an extensive, costly program. Training patients about their disease and making changes in their daily activities that will improve their quality of life can favorably reduce their potential for readmission, while costs can be kept down by using a combination of in-person, telephone and written methods. Remember, some level of organized intervention is better than no intervention at all.

Track Your Outcomes

If you receive the bulk of your oxygen referrals from hospitals, then you absolutely need to track data and “know your numbers”. Hospitals will be tracking your patient readmission rates and so should you. Data can be collected by simply calling the patient 30-days after they were discharged (and setup on home oxygen) and asking a series of questions, including a question to determine if they had been re-hospitalized in the past month. Record data on a spreadsheet to allow easy sorting, simple statistical analysis and reporting.

Hospitals are adopting the philosophy espoused by the legendary efficiency expert W. Edward Deming, who said “in God we trust, all others bring data. ” You can’t manage what you don’t measure. Having data will allow you to evaluate your own performance, identify areas for process improvement, defend your clinical operations and promote your organization as the one that hospitals should be aligning themselves with. Data is powerful and the lack of data a disadvantage.

Charles Darwin said that it is not the strongest of the species that survives, nor the most intelligent, but rather it is the one that adapts the most to change. We are in the midst of evolutionary change in how U.S. healthcare is provided. Some of the forces affecting this change, such as national competitive bidding, are apparent. Other factors, like hospital data analysis, are not as easily seen but their impact will be just as real. Awareness of these factors is only the first step. The next is to begin the process of adapting your business model so that your company not only survives, but thrives in this new healthcare climate.

 

References:

1. Jencks SF, Williams MV, Coleman EA. Rehospitalizations among patients in the Medicare fee-for-service program. N Engl J Med 2009;360:1418-28
2. Rau J. Armed with bigger fines, Medicare to punish 2,225 hospitals for excess readmissions. Kaiser Health News. Aug 2, 2013. http://www.kaiserhealthnews.org/stories/2013/august/02/readmission-penalties-medicare-hospitals-year-two.aspx. Accessed 11/12/2013.
3. Scott L. It’s all about the outcomes. Hospitals and health networks (Published by the American Hospital Association). Dec 2010. http://www.hhnmag.com/hhnmag/jsp/articledisplay.jsp?dcrpath=HHNMAG/Article/data/12DEC2010/1210HHN_Coverstory&domain=HHNMAG. Accessed 11/25/2013
4. Wray K. Data-mining initiatives to improve patient outcomes. Hospital Impact. Feb/1/2011. http://www.hospitalimpact.org/index.php/2011/02/01/first_phase_data_capture_to_inform_clini. Accessed 11/25/2013.
5. Executive summary. Reducing hospital readmissions for congestive heart failure. International Business Machines (IBM). White paper 6/2012. http://public.dhe.ibm.com/common/ssi/ecm/en/zze12345usen/ZZE12345USEN.PDF
6. Phillips CJ, Greene JA, Podolsky SH. Moneyball and medicine (editorial). N Engl J Med 2012;367:1581-83
7. Limberg T, McCoy B. Changes in supplemental oxygen prescription in pulmonary rehabilitation. Resp Care 2006;51(11):1302
8. Doherty DE, Petty TL et al. Recommendations of the Sixth Long-Term Oxygen Therapy Consensus Conference. Respir Care May 2006;51(5): 519-525
9. AARC Clinical Practice Guideline. Oxygen Therapy in the Home or Alternate Site healthcare Facility. Respir Care August 2007;52(1): 1063-1068
10. Petty TL, Bliss PL. Ambulatory Oxygen Therapy. Exercise and Survival with Advanced COPD (The Nocturnal Oxygen Therapy Trial Revisited). Respir Care Feb 2004;45(2): 204-211

This article originally appeared in the May 2014 issue of HME Business.