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The benefits and shortfalls of provider-owned PAC networks


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An economic outlook survey released in April 2016 found 95 percent of C-suite respondents in agreement that expansion and integration of post-acute care (PAC) networks are a top priority over a three-year planning horizon. The challenge for hospitals and health systems, however, will be engaging with providers in their PAC networks to drive better care for patients while keeping costs under control.

At CONVENE 2017, a recent PAC industry forum hosted by naviHealth Essential Insights, thought leaders representing health systems, health plans and service providers shared experiences and ideas about what’s working in the field, as well as areas that will demand ongoing attention and adjustment.

Post-acute status check

Panelists agreed that health care organizations are ramping up various forms of ownership or joint ventures in the PAC setting, even though slim margins require advanced operational capabilities and solid financial backing.

Compared to similar efforts more than two decades ago, “what’s changed is valued-based care and the important part that experienced partners in post-acute care can really provide to the health system,” noted Beth Weagraff, vice president of post-acute strategy and implementation at Adventist Health System, which operates 45 hospitals across 10 states.

“We continually discuss whether to get into the facility business or not,” commented Emily Jaffe, MD, executive medical director at Highmark Home and Community, an integrated finance and delivery system in western Pennsylvania. Highmark recognizes “the advantage of being able to share health records and rotating your staff through different levels of care so that an acute care provider understands what it’s like to be in a facility and that it’s an episode of care rather than a level of care.”

At Priority Health, the delivery component of health system Spectrum Health, the health plan serves 800,000 members across Michigan, with significant current growth in a Medicare Advantage product. With focus on transitions of care “from one appropriate level of care to the next appropriate level,” Priority has shortened average length of stay from 22 to 14.4 days, along with a 3 percent reduction in the network’s 30-day readmission rate, explains medical director Greg Gadbois, MD.

Concurrently, PAC providers leverage a mix of data analytics and “soft” measures when determining whether to embark on risk-sharing agreements, according to Raj Shetye, chief analytics officer at Louisiana-based LHC Group, which maintains joint ventures with over 200 hospitals and 70 health systems. Aside from publicly published data such as CMS’ Star Ratings, providers also assess cultural elements such as ability to work together and execute a shared care plan.

Filling in knowledge gaps

Panelists further emphasized that success with PAC networks hinges on partnerships — but those relationships can take various forms depending on circumstances.

For example, Adventist employs a top-down approach, encouraging preferred network providers to accept an equitable distribution of patients — not just those with non-complex medical conditions. The health system also conducts site visits to determine how well providers are performing on both qualitative and quantitative measures.

In an engaged network, Jaffe suggests, clinical outcomes and patient experience will help identify which providers are on the right track. In-facility network performance managers take feedback and address quality issues. “It’s unusual to have someone who’s got a pretty good readmission rate and risk-adjusted length-of-stay who’s not engaged. They go hand-in-hand,” she adds.

Shetye notes that consumers should be equipped to make an educated choice on post-acute care. “We need to be transparent in how we score [options] and how we present them,” he continues. Information should trigger a discussion about what’s most important to the patient, in a way that “guides them to where they need to be.”

In any event, panelists agreed, transition planning should start as early as possible along the patient’s continuum of care. There will always be outliers, Gadbois acknowledges, but preparation for unexpected changes paves the way for incremental progress. “It’s really about moving the majority of [complex] patients even just one or two days out to the next setting,” he says. “That can make a huge difference from a cost standpoint.”