Clint MacKinney, M.D., dubs them "bridging activities," ways that rural hospital leaders can begin to straddle two reimbursement worlds, as health care shifts away from fee-for-service.
Even if a rural hospital doesn't join an accountable care organization, its administrators and trustees can't afford to ignore emerging ACOs that might alter their region's competitive dynamics, says MacKinney, deputy director of the RUPRI Center for Rural Health Policy Analysis at the University of Iowa in Iowa City. Already, 25 million to 31 million Americans are getting care through a Medicare or private ACO, according to an analysis published in late 2012 by the management consulting firm Oliver Wyman. Further, the Centers for Medicare & Medicaid Services announced the creation of 106 more ACOs in January.
The goal, MacKinney tells hospital leaders, is "to get to this new reality that's coming five, 10 or whatever years down the road without cutting our own throats, when we need to keep the lights on now and pay our staff with fee-for service.”
To that end, hospital leaders will need to collect detailed data about patient care and then delve into what it all means, says MacKinney and other experts. Once they identify their own hospital's trends, they can implement measures to boost the cost and quality of care, whether that's reducing readmissions or keeping patients healthy enough to avoid the hospital in the first place. Along the way, they'll need to develop new working relationships not only with their physicians, but also with public health workers and nonprofit health groups far outside the hospital walls.
Perhaps most challenging is recognizing that competitive success no longer will rely solely upon ever-expanding square footage and licensed beds, says Susan Thompson, CEO of the recently created Trinity Pioneer ACO. The Iowa-based organization includes 200-bed Trinity Regional Medical Center in Fort Dodge, Iowa, a large physician group, home health agency, community mental health center and several rural health clinics.
Thriving hospitals of the future, Thompson predicts, primarily will house a critical care unit, along with related outpatient and home-based services.
"To think that a good day is when the hospital is empty?" she says. "When people say, how big is your hospital? Well, we're a 200-bed hospital. What does that mean anymore?"
It will take time and extensive education for hospital leaders and clinicians to better understand how care might look in a less volume-driven system, MacKinney says. He recommends reserving time at board meetings and other gatherings not only to evaluate treatment quality measures, but also to capture the true cost of patient care.
For example, don't just look at how much a hip replacement or a heart bypass costs the hospital. Instead, calculate how much that diagnosis costs the insurer for patients who used your facility vs. nearby hospitals, MacKinney says. While competitors likely won't share those details, insurers might provide an average cost of those diagnoses in the local marketplace, thus giving your hospital a benchmark, he says.
Todd Linden, CEO of Grinnell (Iowa) Regional Medical Center, started his facility's educational process last year and created a task force of nearly 20 people after it became clear that the 81-bed nonprofit hospital would have the option to join an ACO.
Based in a town with fewer than 10,000 people, Grinnell is part of a newly created health entity called University of Iowa Health Alliance. Some of the 50-plus hospitals in the alliance already have entered into ACO arrangements with either Medicare or a private entity. "We really are putting all of the pieces in place so we can [join an ACO],” Linden says.
The task force, which includes mostly doctors and board members along with a few mid-level providers and hospital executives, had met several times by year's end to study regulatory and other logistics, Linden says. They also have begun to draft a compact to use with interested doctors, laying out the responsibilities and goals related to ACO participation.
Getting physicians onboard, always crucial with any hospital venture, is even more important with ACOs, MacKinney says. Medicare ACOs currently count lives based on the patient's primary care doctor affiliation.
Over time, physician compensation also will have to be reassessed, MacKinney says. One approach might be to incorporate quality measures and care coordination success, along with volume goals. "You have to do this kind of gradually,” he says.
But it is likely that a physician's productivity still will play a significant role, he notes, citing a September 2012 Health Affairs article, authored by leaders at Geisinger Health System. They reported that only 20 percent of the doctors' pay was based on quality and other goals besides fee-for-service productivity.
Fort Dodge's Trinity, which launched its Medicare Pioneer ACO in 2012, laid the groundwork with more than a year of planning, Thompson says. "We spent a lot of time sitting together and thinking about where the opportunities for shared savings would be, and how we would go after those opportunities very quickly.”
A key component was tackling 30-day readmissions, which already were unacceptably high, she says, sometimes reaching 14 percent or above from 2008 to 2011.
Care navigators now assist outpatient physicians to provide better support to patients with chronic illnesses — those on the cusp of hospitalization — so they can stay healthy enough to remain at home. In another program, patients are visited after hospital discharge to check on their conditions and address any medication or other needs that have arisen.
The system's palliative care program also has become more visible, Thompson says. Its physician was moved from the hospital to a location near several physician offices to gauge sooner which chronically ill patients would prefer home-based care once they reach their final stretch of illness.
By last September, Trinity Regional's 12-month rolling average for hospital readmission had fallen to just below 10 percent, Thompson says. In June 2012, the hospital tracked its lowest readmission rate to date: 6.7 percent.
Hospital leaders who want some assurance that they don't risk too much financially by moving to a value-based model might consider a pilot project with a smaller group of patients, such as those without insurance or hospital employees, MacKinney says. That way the risk is relatively small and, if savings are achieved, the hospital will recoup them — and not the insurer, he says.
As an initial foray into broader care management, Grinnell's Linden will introduce a diabetes project early this year. He hopes to learn whether participating primary care doctors can gather the requisite data along with more comprehensively managing patients' care.
Like other hospital leaders gazing over the fee-for-service precipice, Linden's perspective reflects a mix of excitement and nerves. "For the first time in my career, the true mission of wanting to help the community be healthy is going to be lined up with our financial incentive,” he says.
"It's also part of my mission today," he adds, with a wry laugh. "But I still hope that my CT scanner is used a bunch today. It's where the money comes from."
Charlotte Huff is a writer in Fort Worth, Texas.