Bundled payments reduce skilled nursing facility use among hospitals

Hospitals that are involved in two bundled payment models are less likely to utilize skilled nursing facilities (SNFs), according to a new study published in HealthAffairs.

The results underscore that some alternative payments, including the Comprehensive Care for Joint Replacement (CJR) and Bundled Payments for Care Improvement (BPCI) models observed in the study, can help lower overall healthcare costs and simultaneously boost quality of care.

Bundled payments attempt to move the needle when it comes to lowering post-acute care costs by packaging payments to healthcare providers into one episode that follows the patient after a discharge. Providers that save money in episodes of care also have the ability to share in cost savings.

Skilled nursing is one of the costliest healthcare settings, and approximately 20 percent of all Medicare fee-for-service hospitals admissions in 2015 ended in a SNF stay. However, SNF care doesn’t necessarily make patients healthier, which is why many bundled payment models aim to cut down utilization or form better relationships with SNFs.

The study, which observed hospitals and health systems participating in the bundles from August through November 2017, found that discharging patients directly home, with or without home health care, was a common way that providers reduced SNF referrals. For some institutions, the shift had major cultural implications.

“It’s just unbelievable…how the number of patients going home changed dramatically,” an orthopedic service line director said in the study.

Previously, hospitals and health systems may not have fully understand the higher costs of SNF use.

“We were overutilizing skilled nursing, probably driven by our previous practices of not being able to see the total cost of care,” a chief medical officer said in the study.

Circumventing SNFs also required other risk-stratifications that started before major surgeries, the study also found. Hospitals in bundles would work on care optimization with patients prior to surgery and, in some case, walk away from providing the surgery if patients were optimized. Patients were assessed with tools that predicted discharge disposition, and high-risk patients were sometimes provided with physical therapists, advanced practitioners or care coordinators.

Patient expectations also had to be addressed if they were to avoid heading to a SNF after surgery, which included more presurgical education for patients and caretakers.

Patients that were discharged directly home were also provided more resources for better support after they left the hospital, with providers helping identify some social barriers to health, such as meal preparation and medication reminders. Other providers enhanced their relationships with home health agencies to ensure a smooth transition and continued care at home. One system even acquired a home health company.

Still, SNFs were not completely cut out of post-acute care in bundled payments. All 22 hospitals in the study employed new strategies to include SNFs in care management, including sharing providers across facilities, permitting access to EMRs and hiring or reassigning staff as dedicated care coordinators.

Some hospitals directly employed advanced practitioners and physicians at SNFs. Others worked to create preferred SNF networks­–which have become increasingly common and competitive as alternative payment models continue to grow. More than two-thirds of the health systems and hospitals formed preferred SNF networks in response to bundled payment models, the study noted.

“Hospitals reported having formed preferred networks as one way to exert influence on the quality and cost of care, focusing on SNFs that historically received larger shares of their discharged patients,” the study said.

While approaches varied, hospitals in bundled payment episodes are working to lower SNF utilization through more home discharges and increased communication and engagement with SNFs and SNF networks.