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RED HOT Contributors


Episode 26 – The Execution of a Post Acute Solution


The value-based care train is a comin’ – and estimates point to only 8% of all health systems as ready for the CMS’ changes in risk shifting and care payment. More than that – the quality of communication in transitioning patients into post-acute care is often dismal.

One medical expert recently stated the unsettling reality…that veterinarians often take more time in discharging pets, than care facilities do with their patients.

Today we speak with Clay Richards, the CEO of naviHealth – one of the major leaders in post-acute care coordination. His company’s network carries 20% of all hospital discharges nationally, and he’s here to share some major insight and solutions. It’s right here on Red Hot Healthcare. 

In this Red Hot Healthcare episode, Dr. Steve and Clay Richards discuss:

  • Today’s high waste levels in post-acute care
  • Key predictor data in driving best care
  • Poor risk adjustment in post-acute bundling
  • The dilemma of provider ‘cherry picking’
  • naviHealth’s powerful blend of patient engagement, timing, and technology 

Below is a short clip from the full audio podcast interview:

RICHARDS: “[POST -ACUTE] bundling is a concept that has taken on a lot of momentum on the Medicare side, and I think you’re also seeing a significant amount momentum with private payers. It does align the incentives of all the stakeholders; and most importantly, it aligns it in a way that the payments don’t come through unless the patients are getting better outcomes.”

DR. STEVE: “I read an article recently – and I think it was from Healthcare Finance [.com]. It spoke quite a bit about many of our private payers now having interest in the bundled payment model.

In that article, Harold Miller – who is the President and CEO of the Center for Healthcare Quality and Payment Reform, stated that the current bundling program is not really well risk-adjusted. This is because it pays for Skilled Nursing Facilities (SNFs) and does nothing to adjust payment amount based on how many patients actually NEED post-acute facility-based care.

DR. RICHARDS: “I’m not sure that I’ve seen this article in Healthcare Finance, but I’ve read a lot of comments about knowing how to risk-adjust these patients, so that you’re setting up payment appropriately. This is something that MedPAC has talked a lot about, and why CMS has collected a lot of data and experience – so they can best price bundles.

One of the things naviHealth has done is that we work with over 2 million Medicare Advantage lives across the country. In that model, you’re taking into account the entire population – which somewhat eliminates some of the pricing challenges. As CMS, MedPAC and Congress looks at a prospective bundling longer term, I do think having a population-based approach with enough population, can also help prevent providers from ‘cherry-picking'”

DR. STEVE: “Yeah, Harold Miller went on to say that a hospital that has many joint replacement patients, who need skilled nursing rehab, will effectively be penalized when compared to a hospital with fewer numbers of these patients. This creates a strong incentive for hospitals NOT to treat the high risk patients.

What consumers tend to forget is that the motive for any for-profit business is to be profitable. I certainly would hate to see the cherry-picking, but I could see that as a normal response of these types of payment rules – particularly when you get high-risk patients. Do you agree?”

RICHARDS: “Not necessarily. I think that being for-profit also is not mutually exclusive with being pro-patient, and ensuring that you are a mission-based organization, in delivering better outcomes for patients. To me, the for-profit is not an indicator of how we treat patients, or certainly not what the patient’s experience is with that provider.

I think CMS, MedPAC, and other that have looked at this, can use certain design [in bundled programs]to mitigate the risk of cherry-picking. In healthcare, ‘cherry-picking’ means that providers, whether they are health systems or post-acute care providers or physicians, are looking for patients that are less expensive. Therefore, they will be priced less than what they are being measured against.

Today in most bundling programs, providers are measured against their own historic experience. So I think you’re able to get an apples-to-apples, and I think the phenomenon of cherry-picking is overblown, when you look at how these practice patterns exist in local markets.”

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 I have had the privilege and pleasure of working with Steve Ambrose on a podcast that covered a range of topics in healthcare information technology. The podcast logistics – communications, interview questions, scheduling and production – were every well managed.
A great experience that I would do again in an instance.

Dr. John Glaser
SVP, Population Health at CERNER

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