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Post-Acute Care Collaborative

Building the High-Value Skilled Nursing Facility Securing an Essential Role in the Market

Jared Landis Practice Manager The Advisory Board Company [email protected] 202-266-6925

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The Advisory Board is Uniquely Positioned to Help Research and Relationships at the Intersection of a Dynamic Industry The Advisory Board Difference

Hospitals Post-Acute and Long-Term Care Providers

Physician Groups

We are …  Willing to challenge conventional wisdom  Devoted to exceeding member expectations at every turn

And we offer … Insurers

Nursing Leaders

©2013 The Advisory Board Company

Suppliers

3,000+ Hospitals and Health Systems

200+

1,500+

Independent Physician Post-Acute Care Facilities and Practices Agencies

 Unique visibility into provider CXOs’ world – challenges, priorities, vendor perceptions  Direct access to over 500 in-house health care experts

200+

5,000+

Health Care Product and Service Companies

CXO Relationships Across the Care Continuum

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Addressing the Key Questions of Post-Acute Providers

Navigating the Future of Post-Acute Care

Industrywide Relationships Offers Unparalleled Perspective on the Value-Based Post-Acute Environment Building the Seamless Post-Acute Network

Forging a Sector-Specific Value Proposition



• What role should each post-acute sector assume in a value-based delivery system to meet evolving delivery system demands?

How can post-acute providers create a seamless post-discharge solution that appeals to referrers and payers?

• What partnerships, mergers or affiliations should be considered to align the right set of offerings?

Becoming the Post-Acute Partner of Choice

©2013 The Advisory Board Company

• How do post-acute providers build a care management infrastructure to manage patients across settings?

• What are the patient populations that should be prioritized for specialty program development? • What services and clinical factors differentiate an organization from competitors?

Generating a Consistent Referral Stream

Developing Meaningful Clinical Capabilities

• What are the latest trends with regards to post-acute network development?

• What are the clinical competencies that best meet emerging market demands?

• How are hospitals and physician groups approaching the creation of post-acute scorecards?

• What quality tracking and information technology investments are required to build a best-in-class care infrastructure?

• Where are patients going following discharge from the hospital setting?

• How can we upskill our nursing staff and engage them in key clinical priorities?

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©2013 The Advisory Board Company

Road Map

1

SNF Medicare Volume Transformation

2

Strategies to Create System Value

3

Coda: Emerging Payer Partnership Approaches

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Factors Disrupting SNF Medicare Volumes

©2013 The Advisory Board Company

Range of Factors Disrupting SNF Medicare FFS1 Environment

Decreasing Hospital Admissions

Shifting from Inpatient to Outpatient Services

Growing Observation Stay Visits

Substituting PAC Settings (e.g. HHA for SNF)

Emerging Population Health Management Activity

Increasing Medicare Advantage Enrollment

1) Fee for service.

Source: Post-Acute Care Collaborative interviews and analysis.

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Two Drivers of Medicare Inpatient Volume Decline Increasing Use of Observation Stay Visits

Shift from Inpatient Admissions to Outpatient Services

Cumulative Change in Medicare Outpatient Services and Inpatient Discharges

Substantial Growth in Medicare Observation Stays

68% Percentage increase in number of Medicare observation stay visits from 2006 to 2011

Per FFS Beneficiary, 2005-2011

Outpatient Services

30%

28%

25% 18%

20% 15% 10% 10% 5%

©2013 The Advisory Board Company

0% 0% 2005

2007

2009

2011

-5% -1% -10%

-5% -8%

Inpatient Discharges Source: “A Data Book: Health care spending and the Medicare program,” MedPAC, June 2013, available at www.medpac.gov; Post-Acute Care Collaborative interviews and analysis.

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Inpatient Admissions Impacting SNF Admissions? Discharges and Admissions Rising Despite Anticipated Decline Number of Patients Coded for Discharge from Inpatient to SNF

Number of FFS Medicare-Covered Admissions in SNF, by Year

All Payer Discharges, in Thousands

In Thousands

3105 2993 2900 2830

©2013 The Advisory Board Company

2578

2008

2009

2010

2011

2008

2546

2009

2568

2010

2596

2011

Source: “Report to the Congress: Medicare Payment Policy,” MedPAC, March 2013, available at www.medpac.gov; “Medicare and Medicaid Statistical Supplement, 2013 Edition,” Centers for Medicare & Medicaid Services, available at CMS.gov; Healthcare Cost and Utilization Project, “Nationwide Inpatient Sample,” 2011 dataset, Agency for Healthcare Research and Quality, available at hcup-us.ahrq.gov; Post-Acute Care Collaborative interviews and analysis.

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Beyond CMS Data, Public Companies Report Impact Anecdotally, Large SNF Chains Report Medicare FFS Volume Softening Excerpts from Publicly Traded Companies’ 2012 Annual Reports



©2013 The Advisory Board Company

“Our Medicare average daily census for 2012 decreased 5.4% compared to 2011, resulting in a decrease in revenue of $4.9 million.”

“We continue to experience a decrease in Medicare patient days offset by an increase in our managed care patient days in 2012.”

“For 2012, Medicare skilled nursing center average daily census declined by 13% [compared to] 2011.”

“[S]ame facility patient days declined 3% in 2012 and 2% in 2011 compared to prior periods as a result of declines in admissions in 2012 and Medicare average length of stay in both 2012 and 2011.” Source: 2012 Annual Reports, Kindred, available at kindredhealthcare.com, Extendicare, available at extendicare.com, Diversicare, available at dvcr.com, and Skilled Healthcare Group, available at skilledhealthcaregroup.com; Post-Acute Care Collaborative interviews and analysis.

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Technology Enabled Care Utilization Management Health Plans, Hospitals Tap External PAC Utilization Manager NaviHealth’s Post-Acute Management Process 1

15-30%

2

Standard reduction in post-acute care spending Functional assessment of patient conducted in hospital to identify 90-day PAC needs

©2013 The Advisory Board Company

4 Results inform analytics, PAC provider preferred performance tracked network against episode expectations to identify high-performing providers

Algorithm used to develop longitudinal treatment protocol; place patients across PAC settings

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NaviHealth nurse case managers round in PAC facilities to assess patients, manage progress along pathway

Case in Brief: NaviHealth

• PAC benefit manager that partners with health systems and health plans to manage PAC costs, maximize functional outcomes • Serves as BCPI convener, external manager of postacute networks performance

Source: Terry K, “Post Acute Care Manager Promises Lower Costs,” InformationWeek, May 2, 2013, available at: www.informationweek.com; Post-Acute Care Collaborative interviews and analysis.

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Impending Post-Acute Medicare Payment Reform Medicare Incentives Designed to Force Greater PAC Accountability Emerging Post-Acute Incentives 30 Days Referrer Payment Efficiency

90 Days Tied to PAC

PAC Payment Tied Episodic Performance

to

• 30-day mortality (PN, AMI, HF)

• SNF 30-day readmission penalties

• MedPAC proposed 90-day mandatory bundled payment

• 2015: 30-day readmissions (TKA, THA, COPD)

• Proposed site-neutral payment

• Multi-site 30-day readmission quality reporting

©2013 The Advisory Board Company

• 2015: 30-day efficiency

Current Post-Acute Incentives • 30-day readmissions (PN, AMI, HF)

• Post-acute prospective payment

• Bundled Payments for Care Improvement

• Accountable Care Organizations • PACE1

1) Program of All-Inclusive Care for the Elderly.

Source: Post-Acute Care Collaborative interviews and analysis.

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Technology Enabled Care Utilization Management Health Plans, Hospitals Tap External PAC Utilization Manager NaviHealth’s Post-Acute Management Process 1

15-30%

2

Standard reduction in post-acute care spending Functional assessment of patient conducted in hospital to identify 90-day PAC needs

©2013 The Advisory Board Company

4 Results inform analytics, PAC provider preferred performance tracked network against episode expectations to identify high-performing providers

Algorithm used to develop longitudinal treatment protocol; place patients across PAC settings

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NaviHealth nurse case managers round in PAC facilities to assess patients, manage progress along pathway

Case in Brief: NaviHealth

• PAC benefit manager that partners with health systems and health plans to manage PAC costs, maximize functional outcomes • Serves as BCPI convener, external manager of postacute networks performance

Source: Terry K, “Post Acute Care Manager Promises Lower Costs,” InformationWeek, May 2, 2013, available at: www.informationweek.com; Post-Acute Care Collaborative interviews and analysis.

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Impending Post-Acute Medicare Payment Reform Medicare Incentives Designed to Force Greater PAC Accountability Emerging Post-Acute Incentives 30 Days Referrer Payment Efficiency

90 Days Tied to PAC

PAC Payment Tied Episodic Performance

to

• 30-day mortality (PN, AMI, HF)

• SNF 30-day readmission penalties

• MedPAC proposed 90-day mandatory bundled payment

• 2015: 30-day readmissions (TKA, THA, COPD)

• Proposed site-neutral payment

• Multi-site 30-day readmission quality reporting

©2013 The Advisory Board Company

• 2015: 30-day efficiency

Current Post-Acute Incentives • 30-day readmissions (PN, AMI, HF)

• Post-acute prospective payment

• Bundled Payments for Care Improvement

• Accountable Care Organizations • PACE1

1) Program of All-Inclusive Care for the Elderly.

Source: Post-Acute Care Collaborative interviews and analysis.

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©2013 The Advisory Board Company

Road Map

1

SNF Medicare Volume Transformation

2

Strategies to Create System Value

3

Coda: Emerging Payer Partnership Approaches

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Thriving in a New SNF Medicare Environment 10 Strategies for Skilled Nursing Providers to Create System Value

2

3

Build the Essential Value Foundation

Provide the Cost-Appropriate Solution

Secure Network Position

1.

Augment Care Team Composition

4.

8.

Motivate Network Collaborators

2.

Implement Next-Level Clinical Protocols

Create Path for Financially Untenable Patients

9.

Amass the Post-Discharge Network

5.

10. Become the Full (Rural) Network

Target Vital Efficiency Improvements

Develop Needed Cross-Continuum Programs

6.

Build the Super-Specialty Destination

7.

Substitute for Acute Care Stays

3.

©2013 The Advisory Board Company

1

Source: Post-Acute Care Collaborative interviews and analysis.

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Tactic #1: Augment Care Team Composition

Scaling Staff Investments to Improve Care Quality Options to Improve Care For Increasingly High-Acuity Patients Linking with Physicians

©2013 The Advisory Board Company

Level of Clinician Capability

High •

Partner with independent physicians or hospitalist groups



Strategically select medical director



Partner with hospital- or physician groupbased physicians



Employ physicians

Escalating Nurse Practitioner Use •



Low

Mostly LPNs and CNAs Low

Partner with independent NP groups

Increasing RN and Therapist Staff Mix



Upgrade existing staff capabilities

Partner with acute care-owned NPs



Partner with payer-owned NPs



Employ NPs



Hire RNs



Hire therapists

Level of Patient Acuity

High

Source: Post-Acute Care Collaborative interviews and analysis.

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Increasing Skilled Staff Mix North Shore-LIJ’s Process for Converting LPNs to RNs Analyze Feasibility

Determine financial and operational impact of shift to allRN model

Provide Staff Support

Carve Out Time for Study

Alleviate financial burden of return to school by providing funding when possible

Work one-on-one with staff to create realistic plans to balance work and study

©2013 The Advisory Board Company

Benefits of Increased Skilled Staff Mix

Provide Higher Skill Level of Care

Improve Skill and Performance of Other Staff

Increase Frequency of Patient Visits

Source: North Shore-LIJ Health System; Post-Acute Care Collaborative interviews and analysis.

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Nurse Practitioners a Key Resource Multitude of Benefits Enable Care for Higher Acuity Patients Prestige Care’s Expanding Partnership Centered Around UHC’s1 NPs2 Hosted UHC’s NP-Led Care Model, Optum

Developed Partnership Through NP Program

Negotiated NP Expansion, Increased Referral Volume

NPs See All Prestige Patients

NPs See Only Optum Patients

©2013 The Advisory Board Company





Model designed to increase patient access to NP-delivered ongoing primary care NPs help reduce disruptive, costly hospitalizations for long-term care patients

1) UnitedHealthcare. 2) Nurse Practitioners.



NPs, SNF staff foster close relationships







NPs offer ongoing performance, skill mentoring to SNF staff

UHC valued Prestige’s willingness to collaborate and dedication to reducing hospitalizations



NP-staff collaboration improves care quality, reduces readmissions

Prestige negotiated with UHC and secured expansion of NP model to their non-Optum skilled patients



Partnership generated increased volume of UHC referrals

Source: Prestige Care, Inc.; Post-Acute Care Collaborative interviews and analysis.

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Tactic #2: Implement Next-Level Clinical Protocols

Boosting Protocols to Reduce Readmissions Layering Additional Systems onto INTERACT-based Standards Industry Standard INTERACT1 Tool-Based Approach

Next-Level Protocol Enhancements 1

2

SNF-Based Palliative Care Facilitators

Data-Driven “Step-Up” Response Unit

Goals of INTERACT Program: 1.

Prevent conditions from worsening with early detection of change in status

2.

Improve advance pare planning and palliative care access

3.

Manage appropriate patients safely in nursing home

©2013 The Advisory Board Company

Rehospitalizations from SNF a Cost and Quality Concern

25%

Patients discharged from hospital to SNF were rehospitalized within 30 days

1) Interventions to Reduce Acute Care Transfers.

$14.3B

Cost to Medicare of these patient re-hospitalizations from SNF (2011)

Source: “Medicare Nursing Home Resident Hospitalization Rates Merit Additional Monitoring,” Office of the Inspector General, November 2013, available at oig.hhs.gov; Post-Acute Care Collaborative interviews and analysis.

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SNF-Based Staff Improve Palliative Care Access Hillard’s1 Continuum of Compassionate Care Model

Medical Director of Palliative and End-of-Life Care Integrates palliative care and hospice across system

Senior Living

Hospital

SNF

Home Health and Hospice

Physicians

SNF’s Role in Compassionate Care Model

©2013 The Advisory Board Company

SNF-based staff are trained to incorporate these new protocols:

Patient Assessment Understand criteria for identifying patients at risk of deterioration in status 1) Pseudonym. 2) Physician’s Orders for Scope of Treatment.

Palliative Care Integration Collaborate with palliative care specialists to ensure access to efficient, patient-centered support

POST2 Form Discussion Gain comfort broaching advanced care planning and POST forms with patients Source: Post-Acute Care Collaborative interviews and analysis.

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Tactic #3: Target Vital Efficiency Improvements

Assembling a Value-Focused Approach to Episodes Four Drivers of Efficiency: Lessons from Value-Based Initiatives

Patient Assessment Protocol Key ingredient: Comprehensive patient assessment protocol assists clinicians in determining appropriate PAC site of care

©2013 The Advisory Board Company

Information Sharing, Data Tracking Key ingredient: Data visibility requires investment, but enables patient monitoring and real-time adjustments for cost-saving

Transitions Navigators Key ingredient: Transition navigators guide patients through full episode of care, from inpatient through to post-PAC-discharge

Outcomes Focused Care Plan Key ingredient: Longitudinal care plan tailored to individual’s conditions and needs ensures appropriate amount, level of care

Source: Post-Acute Care Collaborative interviews and analysis.

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Efficient Placement a Persistent Challenge Facility-Specific Capabilities Underrepresented in Discharge Decision



Proportion of Medicare Patients Placed in an Avoidably High-Cost Setting Study Findings By Post-Acute Setting

Specialty Service Availability Often Unconsidered

42% 11%

“The case manager is going to place patients based on the last time they heard a presentation, or they’ll ask their colleague ‘Hey, who takes trachs?’ or they will remember from the last liaison who bought them a cup of coffee. There’s no good rhyme or reason.”

30%

20%

18%

14%

31% 15%

©2013 The Advisory Board Company

9% 5% HHA

Appropriate Setting

SNF

OP Therapy

Continuity of Care Director, Large Health System

3% IRF

HHA

LTACH

SNF

IRF Source: Dobson, DaVanzo and Associates, “Clinically Appropriate and Cost Effective Placement,” available at www.healthreformgps.org/wp-content/uploads/cacepreport.pdf; Post-Acute Care Collaborative interviews and analysis.

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Informing the Right Level of Care Patient Placement Innovation Requires Incentive Structure Redesign Dorsia Rehabilitation’s1 Patient Placement Redesign Essential Design Features Dorsia System Placement Tool

Hip Fracture Placement Factors:

©2013 The Advisory Board Company

• Cognitive status • Weight bearing status • Prior level of function • Age • Caregiver status

Engages Physicians

Referring

• Developed through referring physician input, chart review, clinical research

Preserves Liaison Critical Thinking • Does not automate setting placement, centered critical thinking

preserves patient-

Matched Liaison Liaisons rewarded for Dorsia system referrals rather Incentives than IRF2 referrals

1) Pseudonym. 2) Inpatient rehabilitation facility.

Source: Post-Acute Care Collaborative interviews and analysis.

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Equipping Care Navigators with System Visibility Universal Metrics Support Navigator Placement Efficiencies Key Features: Dorsia1 Care Compass

Navigator Placement Methodology Care Compass Patient Measures

Longitudinal Clinical Measures • Tracks a set of DRG-specific, standardized clinical measures across all Dorsia care settings

Green

Segments patients into risk tiers2

Yellow or Red

Care Navigator Data Feed

©2013 The Advisory Board Company

• Alerts care navigators to important changes in patient metric set warranting intervention

Non-Clinical Navigator (Telephonic Visits)

1) Pseudonym. 2) Patients can switch between navigator types should their risk level change.

RN Navigator (Home Visits)

Source: Post-Acute Care Collaborative interviews and analysis.

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Thriving in a New SNF Medicare Environment 10 Strategies for Skilled Nursing Providers to Create System Value

2

3

Build the Essential Value Foundation

Provide the Cost-Appropriate Solution

Secure Network Position

1.

Augment Care Team Composition

4.

8.

Motivate Network Collaborators

2.

Implement Next-Level Clinical Protocols

Create Path for Financially Untenable Patients

9.

Amass the Post-Discharge Network

5.

10. Become the Full (Rural) Network

Target Vital Efficiency Improvements

Develop Needed Cross-Continuum Programs

6.

Build the Super-Specialty Destination

7.

Substitute for Acute Care Stays

3.

©2013 The Advisory Board Company

1

Source: Post-Acute Care Collaborative interviews and analysis.

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Meeting System Gaps to Secure Network Role

Steps to Securing a Seat at the Table

Strategically Select Initiative

©2013 The Advisory Board Company

Identify key acute care needs and secure necessary funding

Implement HighQuality Program

Prove and Secure Network Role

Acquire equipment, enhance staff capabilities, and develop protocols to handle new patient population

Demonstrate quality care, flexibility, and ability to meet acute partners’ needs and solve system gaps

Leverage System Value

Use demonstrated value to secure new program partnerships and more favorable terms

Source: Post-Acute Care Collaborative interviews and analysis.

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Tactic #4: Create Path for Financially Untenable Patients

Unique Solutions Unlock Partnerships Signature’s Unfunded Patient Transfer Partnership with Lockton Hospital1

Partner Selection Lockton selected Signature and other participating SNFs due to flexibility and willingness to accept difficult-to-place patients

Patient Transfer Signature collaborates with Lockton to provide care coordination and share patient data

©2013 The Advisory Board Company

Lockton Benefits

1) Pseudonym.

Cost-Effective Care Signature’s SNF setting enables care provision at lower cost, directly reimbursed per patient by Lockton

Signature Benefits

Bed made available for emergent or reimbursable patients

Sustainable financial compensation for transferred patients

More cost-effective to transfer patient to Signature’s SNF

Closer partnership and prospect to discover, meet other Lockton needs Source: Signature HealthCARE; Post-Acute Care Collaborative interviews and analysis.

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Tactic #5: Develop Needed Cross-Continuum Programs

Leveraging Partnership for Development Support

…Unlocks Specialized Program Implementation Support

Ralston House’s1 Partnership with McQuay University Health System2…

LVAD3 Training

©2013 The Advisory Board Company

Close Existing Relationship •

McQuay physicians, NPs, and medical directors serve Ralston

McQuay trains Ralston staff to facilitate program development.



Ralston hosts McQuay geriatric fellows

Sample Training Topics:



Participate in jointly created programs (for example, specialty hip and knee orthopedic program)



Coding for LVAD patients



Red flags for patients in need of return to hospital



Transportation protocol

Additional Implementation Steps Develop Aligning Specialty Began initiative to mirror McQuay’s LVAD program

1) Pseudonym. 2) Pseudonym. 3) Left ventricular assist device.



Create centralized LVAD wing



Increase concentration of staff for closer patient monitoring

Source: Post-Acute Care Collaborative interviews and analysis.

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Tactic #6: Build the Super-Specialty Destination

Taking On Unique, Very High-Acuity Patients Laclede’s1 Intensive, Specialized Model Expands Target Patients and Conditions Traditional SNF Patient Type

Elderly

Core Services

Standard skilled

Laclede Pediatric

Catastrophic injury

Key Success Factors for Model Implementation

©2013 The Advisory Board Company

Funding •



Classified as “intensive skilled nursing provider” by state Medicaid



Allows higher Medicaid rates



1) Pseudonym.

Facility Upgrades

Skilled Staff Search for staff experienced in specific area needed, such as pediatrics



Buy equipment such as vents



Build medical gases directly into rooms

Provide ongoing training



Partner with acute lab

LTACH Partnership •

Collaborate with local LTACH on optimal patient placement



Take LTACH patients who have used all acute Medicare days

Source: Post-Acute Care Collaborative interviews and analysis.

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Tactic #7: Substitute for Acute Care Stays

Expanding Options for Direct-to-SNF Programs Implementation Processes Still in Early Planning Stages for Many 3-Day Hospital Stay Waiver Program Requirements

Implementation Considerations

1 Direct-to-SNF Transfer Agreement Informed clinicians direct patients to SNF in lieu of acute care as clinically appropriate

2

©2013 The Advisory Board Company

3 3-Day Hospital Stay Waiver

Preferred Partnerships

Range of waivers available via: MSSP, Pioneer ACOs, plans, bundle initiatives

Participation often limited to narrow range of SNF partners

4

Proper Patient Identification Create common patient assessment protocols to ensure appropriate patients selected for diversion Joint Process Mapping Map transfer processes with referring partners to enable smooth patient transitions from any site 24-7 Admissions Availability Bolster systems, staffing and medication supply to allow rapid patient acceptance at any time Enhance Clinical Capabilities Increase capabilities to care for and stabilize patients without preceding hospital stay Source: Post-Acute Care Collaborative interviews and analysis.

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Thriving in a New SNF Medicare Environment 10 Strategies for Skilled Nursing Providers to Create System Value

2

3

Build the Essential Value Foundation

Provide the Cost-Appropriate Solution

Secure Network Position

1.

Augment Care Team Composition

4.

8.

Motivate Network Collaborators

2.

Implement Next-Level Clinical Protocols

Create Path for Financially Untenable Patients

9.

Amass the Post-Discharge Network

5.

10. Become the Full (Rural) Network

Target Vital Efficiency Improvements

Develop Needed Cross-Continuum Programs

6.

Build the Super-Specialty Destination

7.

Substitute for Acute Care Stays

3.

©2013 The Advisory Board Company

1

Source: Post-Acute Care Collaborative interviews and analysis.

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Who’s Driving the Network Aggregation? ACOs and Health Systems Already Creating SNF Networks Midwest ACO Brings SNFs Together Around ACO Objectives Regular Collaborative Meetings

Quality Improvement Projects

• SNFs offer input into health system discussions • ACO representatives share updates about ACO progress

• ACO organizes support for SNFs with improving care quality

ACO’s SNF Collaborative

• Initial efforts focused on reducing readmissions via INTERACT tools

Data Reporting

©2013 The Advisory Board Company

• ACO requires SNFs to report data on key metrics • SNFs that improve quality metrics can earn shared savings Sample Metrics SNFs Must Report Readmission Rates

Length of Stay

Outcomes Data

Staffing Ratios

Admissions Processes

Patient Satisfaction Source: Post-Acute Care Collaborative interviews and analysis.

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Tactic #8: Motivate Network Collaborators

Solidify Hospital Partnership with New Joint Venture Mesker1 Gains Predictable Referral Relationship in Competitive Market

Hospital

Mesker

JV New SNF

• 49% ownership stake

• 51% ownership stake

• Three board seats

• Two board seats

• Clinical quality control

• Operational control Strategic Benefits of JV for Each Party

Hospital

©2013 The Advisory Board Company

• Savings from improved inpatient efficiency, share of profits from SNF • Control over quality, clinical decisions post-discharge through Medical Director oversight, physician rounding

Mesker • Share of profits from SNF • Long-standing, binding relationship with hospital and more predictable referral stream in competitive market

• Ancillary services revenues

• Physician presence and increased clinical capabilities

• Home health revenues from SNF patients post-discharge

• Access to patient information and improved transitions

1) Pseudonym.

Source: Post-Acute Care Collaborative interviews and analysis.

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Tactic #9: Amass the Post-Discharge Network

Take Control Downstream by Expanding Footprint Service Expansion Supports Episode Performance Dorsia’s1 Value-Driven Care Redesign Spurred Downstream Expansion as Means to Control Costs and Improve Outcomes

Realized over 30% of hip fracture patients could be safely directed to SNF instead of IRF, for approx. $10,000 savings per case

Additional Expansion?

Redesigned Care

Decided to Build SNFs

Initiated care redesign process and created protocols to aid patient placement in SNF or IRF

Completed one new SNF in July 2013 and plans to build another in 2015

Analyzed Data

Considering home health and senior living expansion

©2013 The Advisory Board Company

Advantages of Owning (vs. Partnering with) Downstream Assets Retain ultimate control over costs throughout episode of care

1) Pseudonym.

Monitor and regulate patients’ progress to optimize recovery

Capture revenues from providing downstream services yourself

Source: Post-Acute Care Collaborative interviews and analysis.

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Tactic #10: Become the Full (Rural) Network

Skip Winning Over Partner Altogether Signature’s Rural Hospital Acquisition Unlocks Network Initial Signature Footprint

Signature’s Newly Acquired Network

Medical Offices Critical Access Hospital

Four SNFs



©2013 The Advisory Board Company

Rural Health Clinic

Employed Physicians

Six-County Home Health Agency

“We have definitely shifted to a view that we have to position ourselves for the future design of health care, which is more network-driven. And in rural communities, we in fact can be the driver and the builder-up of networks.” Chief Strategic Officer, Signature HealthCARE Source: Signature HealthCARE; Post-Acute Care Collaborative interviews and analysis.

35

©2013 The Advisory Board Company

Road Map

1

SNF Medicare Volume Transformation

2

Strategies to Create System Value

3

Coda: Emerging Payer Partnership Approaches

36

Medicare Advantage Replacing Fee-For-Service? Large Plans Control Current Marketplace, Future Enrollment Not Clear Medicare Advantage Enrollment Projections

Medicare Advantage Enrollment

CBO2 and OACT3 Projected Future Enrollment

By Firm or Affiliate, 2013 United Healthcare

20

21%

18 16 14 12

17%

All Others

10 8

BCBS1

33%

6 4 2

17%

0 ©2013 The Advisory Board Company

2013

2014

2015

2016

CBO

2017

OACT

1) Blue Cross Blue Shield affiliates, including 4% in Wellpoint affiliates. 2) Congressional Budget Office. 3) Center of Medicare and Medicaid Services Office of the Actuary.

2018

2019

2020

4%

Aetna

Humana 8%

Kaiser Permanente

Source: Kaiser Family Foundation, ”Medicare Advantage 2013 Spotlight”, available at www.kff.org; Centers for Medicare and Medicaid Services, “Medicare Enrollment, National Trends 1966-2010”, available at www.cms.gov; Congressional Budget Officer, “Medicare Baseline,” May 2013, available at http://www.cbo.gov/sites/default/files/cbofiles/attachments/44205_Medicare_0.pdf, Report to the Medicare Board of Trustees, 2013, available at http://downloads.cms.gov/files/TR2013.pdf, Post-Acute Care Collaborative interviews and analysis.

37

Create Executive Level Managed Care Relationships

Establish ExecutiveLevel Partnership

Proactively Raise Risk-Sharing Possibilities

• Create executive level position, e.g. VP of Managed Care Partnerships • Select candidate most capable of holding sophisticated negotiations with executives

• Demonstrate willingness to partner and share risk by taking the initiative to convert FFS contracts to pay for performance or risk-based contracts

• Empower VP to seek creative ways to build partnerships with payers’ executives

• Prepare financial models and bring performance data to create leverage



©2013 The Advisory Board Company

Keys to Starting Partnership Discussions with Managed Care Payers

“To get our feet, wet we’re looking at capitation for our long-term care population. These folks live in our building, we see them everyday, and we know how to take care of them.” VP of Managed Care Commercial SNF Chain Source: Post-Acute Care Collaborative interviews and analysis.

Preempt Payer Care Management with Own Program

38

Genesis and Aetna Partner to Improve Care, Reduce Costs Components of Genesis’ Care Improvement Model Related to Aetna Contract

Enhanced Care Management

©2013 The Advisory Board Company

Dedicated staff monitor patient progress, aid transitions and manage care utilization

NP and Physician Presence Genesis-based doctors and NPs provide primary care, prevent readmissions

Intensive Rehab Services Intensive therapy 6 days/week; special programs for orthopedic, cardiac, pulmonary, etc.

Expanded Discharge Planning Care managers give discharge guidance, patient education, and ensure connection to PCP

Anticipated Benefits for Genesis Partners estimate $2 million savings from Genesis’ care management and reduced hospitalizations. Genesis eligible for financial rewards based on achieving target measures of improved outcomes.

Source: Newman E, “Genesis-Aetna alliance may preview ACO deals to come,” McKnight’s Long-Term Care News, October 1, 2011, available at mcknights.com; “Aetna, Genesis HealthCare take aim at reducing hospital readmissions,” Aetna, August 10, 2011, available at aetna.com; Post-Acute Care Collaborative interviews and analysis.

Leveraging Case-Specific Expertise to Grow Business

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Keys to Initiating and Cultivating Payer Linkages Engage Payer’s Medical Leadership

Prove Success with One-Off Cases

• Start dialogue with payer’s clinicians

• Steer negotiations away from unit costs

• Discuss increased reimbursement given patient complexities

• Focus on creative, high-quality solutions

” ©2013 The Advisory Board Company

Focus on Unique Approach

Proactively Seek New Opportunities

• Experiment with creative approaches to patient challenges • Demonstrate success on case-by-case basis

• Given expertise, seek other payers with problems placing similar patient types

I Can Help You With That Patient “I’ve had conversations with providers about building a relationship to handle these high-acuity, high-intensity consumers and we haven’t had one mention of unit costs. Not one.” Rick Fredrickson, SVP Long Term Care Programs, Centene

Source: Centene; Post-Acute Care Collaborative interviews and analysis.

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Questions About Today’s Session? For Additional Information on How the Advisory Board Supports Post-Acute and Long-Term Care Providers

Jared Landis Practice Manager Post-Acute Care Collaborative [email protected] 202.266.6925

©2013 The Advisory Board Company

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Lead Consultant for Post-Acute Care Collaborative 8+ years experience within the Advisory Board’s Strategic Research Division Areas of expertise include: post-acute and long-term care trends, provider relationship building, referral strategy, and business planning