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Property of L. Freeman and J. Perticone Page 1 Do not reproduce without written consent LeadingAge Oregon 2015 Annual Conference (Re)Defining and Developing Specialty Services for Older Adults in a VBP Environment Presentation Handout May 17 20, 2015 Redmond OR Speakers: Lynn Freeman, PT, PhD, DPT, GCS, CWS – Sammamish, WA – PATH Research Institute and Aegis Therapies, Lynn.Freeman@aegistherapies.com 1. Course description. a. In 2011, the Centers for Medicare & Medicaid Services (CMS) issued its final regulations on Accountable Care Organizations (ACOs). An ACO consists of a collaborative network of providers that are rewarded financially if they slow the growth in spending while maintaining or improving the quality of the care delivered to its’ patients. The advent of ACOs will require postacute care providers to build an infrastructure of specialization that will allow for collaborative care using highquality evidencebased clinical pathways across the care continuum. Participants will learn how development of specialty services maximizes financial and clinical outcomes in managing chronic conditions. 2. Objectives a. Describe eight essential elements of designing specialty units and programs to meet the demands of valuebased purchasing and use an evidencebased approach to identify populations in need of these services. b. Translate research findings related to developing specialty services for accountable care organizations and other valuebasedpurchasing payment programs into practice. c. Describe four or more enhanced clinical and financial outcomes related to developing specialty services in an ACO environment.

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Page 1: (Re)Defining and Developing Specialty Services for Older ......Property of L. Freeman and J. Perticone Page 1 Do not reproduce without written consent LeadingAge Oregon 2015 Annual

Property of L. Freeman and J. Perticone Page1Do not reproduce without written consent  

LeadingAge Oregon 2015 Annual Conference  

(Re)Defining and Developing Specialty Services for Older Adults  in a VBP Environment 

Presentation Handout May 17 ‐ 20, 2015 Redmond OR 

Speakers:  Lynn Freeman, PT, PhD, DPT, GCS, CWS – Sammamish, WA – PATH Research Institute and Aegis Therapies, [email protected]

1. Course description.a. In 2011, the Centers for Medicare & Medicaid Services (CMS) issued its final

regulations on Accountable Care Organizations (ACOs).  An ACO consists of acollaborative network of providers that are rewarded financially if they slow thegrowth in spending while maintaining or improving the quality of the caredelivered to its’ patients.  The advent of ACOs will require post‐acute careproviders to build an infrastructure of specialization that will allow forcollaborative care using high‐quality evidence‐based clinical pathways across thecare continuum.  Participants will learn how development of specialty servicesmaximizes financial and clinical outcomes in managing chronic conditions.

2. Objectivesa. Describe eight essential elements of designing specialty units and programs

to meet the demands of value‐based purchasing and use an evidence‐based

approach to identify populations in need of these services.

b. Translate research findings related to developing specialty services for

accountable care organizations and other value‐based‐purchasing payment

programs into practice.

c. Describe four or more enhanced clinical and financial outcomes related to

developing specialty services in an ACO environment.

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Property of L. Freeman and J. Perticone Page2Do not reproduce without written consent  

(Re)Defining and Developing Specialty Services for Older Adults in a VBP Environment TABLE OF CONTENTS 

I. Slide Presentation 

II. Bibliography

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(Re)Defining and Developing Specialty Services for Older Adults in a VBP Environment

John P. Perticone | VP of Strategic Partnerships 

Lynn Freeman| VP of Clinical Research

Session Objectives

1. Describe eight essential elements of designing specialty units and programs to meet the demands of value‐based purchasing and use an evidence‐based approach to identify populations inneed of these services.

2. Translate research findings related to developing specialty services for accountable care organizations and other value‐based‐purchasing payment programs into practice.

3. Describe four or more enhanced clinical and financialoutcomes related to developing specialty services in an ACO environment.

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Accountable Care Organizations

John P. Perticone, MBA, CHFP, CEBS

Systemic Change in Care DeliveryLimited Dollars for Growing Medicare Population

• Reduce waste and improve efficiencies

• Coordinate care across the continuum

• Shorter lengths of stay and improved outcomes

• Provider partnerships (Hospitals, Physicians, SNF’s, Home Health and Hospice)

• Competitive bidding based on quality and costs

• Shared savings models and value‐based purchasing (VBP) for payment 

differentials based on performance 

CMS’s Vision for America

Medicare: Quality Initiatives. Centers for Medicare & Medicaid Services. http://www.cms.gov/. Accessed September 26, 2012.

• “Patient‐centered, highquality care delivered efficiently.”

• Value‐Based Purchasing

• Provides incentives

• Fosters joint clinical and 

financial accountability

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Value Based Purchasing‐US Dept of Health and Humana Services, report to Congress in 2012, 

SNF Overview

• 2,000,000 discharges from SNF’s

• $24 Billion in SNF payments in 2008

• 57 SNF Admission to SNF’s per 1,000 Medicare FFS lives

• Average Length of stay is 35 days in 2008

• Approximately 2,000 Medicare FFS days per 1,000 lives

• Average Medicare payment is $350 per day

• Average Payment per stay exceeds $12,000

Value‐Based PurchasingCMS’s Goals for Value‐Based Purchasing

• Financial Viability

• Payment Incentives

• Joint Accountability

• Patient Experience of Care

• Effectiveness

• Ensuring Access

• Safety and Transparency

• Smooth Transitions

• Electronic Health Records

8Medicare: Quality Initiatives. Centers for Medicare & Medicaid Services. http://www.cms.gov/. Accessed September 26, 2012.

Hospital Reimbursement – ACOs

• Accountable Care Organizations (ACOs): provider-based organizations that take responsibility for meeting the healthcare needs of a defined population with the simultaneous goals of providing:

• better health for individuals• better health care for assigned pop• lower growth in expenditures

CMS

Triple

Aim

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Medicare ACOs• Groups of doctors, hospitals, ancillary services, and other healthcare

providers, who come together voluntarily to give coordinated and high quality care to Medicare beneficiaries 

• Forms a new company with a separate tax ID # and leadership team

• Goal of ACO is to Reduce the Beneficiary Medicare Spend against a Base Time Frame

• Coordinate high‐quality care for the beneficiaries “attributed” to it. 

• Often operates under a “patient‐centered medical home” conceptand will focus attention on chronic disease state and maintaining health and wellness

• Share in the savings generated when successfully in spending healthcare dollars more wisely

Responsibilities of Medicare ACOs

• As required by the Affordable Care Act of 2010, the finalrule requires an ACO to define processes to:

• Promote evidence‐based medicine

• Promote patient engagement

• Improve Patient Satisfaction with Health Care Providers

• Report on quality and cost measures

• Coordinate care throughout the continuum, such as through the use of telehealth, electronic portals, remote patient monitoring and other such enabling electronic technologies.

ACO‐Measuring Quality Improvement

1. Patient/caregiver experience of care 2. Care coordination3. Patient safety 4. Preventative health

• Diabetes• Heart failure• Coronary artery disease• Hypertension• Chronic obstructive pulmonary disorder

5. At‐risk population/frail elderly health• Falls: screening for fall risk• Osteoporosis management in women who had a fracture• Monthly INR for beneficiaries on Warfarin

Wellness through passive participation alone is insufficient. Education based on principles of adult learning are essential to “activation.” 

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Consumer and Caregiver Activation• Patient engagement

• “actions individuals must take to obtain the greatest benefit from

healthcare services available to them”

The Center for Advancing Healthcare

• Outcomes are enhanced when patients and caregivers are active participants in 

understanding their own self care needs, and actively planning and coordinating 

their own care requirements

• 6 diagnostic Categories representing 14% of Medicare Beneficiaries represent

70% of Hospital Readmissions

• Tools such as telehealth, social networks, personal health records on patient 

portals, all can enhance the ability of the patient to take greater responsibility in 

their own care needs

ACO expectations of PAC Providers

• IT infrastructure (HIE and EMR) to share clinicalinformation in a two way fashion

• Stronger medical care support to accept higher acuitypatients that would have used LTACH’s and IRFs ‐SPECIALISTS

– Geriatricians, Internal Medicine MD’s, NPs, RTs

• Close coordination with hospitals and HH agencies toreduce avoidable readmissions

• Clinical pathways to better sequence the timing anddelivery of services

Over Arching Themes ‐ Continuum Goals

Excellence in clinical care, providing the right care in the right place at the 

right time, resulting in:

• Lower re‐hospitalizations• Seamless transitions of care• Improve ability to teach and train

patients on self care needs forthe discharge environment

• Improved clinical outcomes• Coordinated communication

among providers

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Hospital Re”ADMISSIONS” from PAC’s• Approximately $17 Billion per year spent in Hospitalreadmission

• Over $4 Billion per year in Readmissions to the hospitalfrom SNF’s in 2006

• Estimated 30 day readmission rate of 18%, some believeas many as 8% are avoidable

• Reduce Avoidable Hospital Readmission program fromCMS in 2013 penalizes Hospitals up to 1% of Medicare Revenues, 2% in 2014

Potentially Avoidable 30 day Hospital Readmissions in Medical Patients, JAMA March 25, 2013

PAC Accountability – Measures

• Greater accent on SNF’s taking higher acuity

• Reduction in SNF Length of Stay

• Expand admissions to weekends and evenings

• Clinical pathways to better sequence the timingand delivery of services

• Reduction in hospital readmission rates

• Improved coordination with PCP and HH Agencies

ACO’s choice of PAC Partners in RFP?

• SNF Surveys and Length of Stay Data

• Patient Satisfaction and Beneficiary Engagement

• Tenure, experience and expertise of Facility Staff

• Capacity to serve specialty patient populations

• IT Integration and capabilities

• Relationships with Key Hospitals, Medical Groupsand Geography covered

• Evidenced‐based services and outcomes

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ACO’s choice of PAC Partners in RFP?

• You??  Michigan Pioneer ACO

ACO Expectations: Attending MD’s & Mid Level Providers

• Initial new patient visit by PCP within 48 hours

• MD’s and NP’s of ACO’s may want to participate in CarePlanning and weekly meetings

• Keep the ACO PCP engaged and updated in what ishappening in the PAC Cont. (SNF/ALF/ILF/OP/HH)

• Treat patients in place and Attending MD’s engaged inChange of Condition 24/7

• Plan around barriers to return home earlier (e.g. TCU)

• Coordinate discharge follow‐up with PCP’s

Medicare ACO’s‐Recent trends

• Pioneer ACO’s on 1/1/14 will be able to  propose a“waiver of the 3 day pre‐qualifying hospital stay rule”

• Bundled Payments For Care Improvement Model 2provides for a “waiver” of the 3 day stay rule ‐ 3 starand above SNF’s

• Other Waivers in Bundled Payment 2:

– For home visits by MD’s/NP’s, 

– For Telehealth

– For the use of Gain Sharing including Fraud and Abuse StarkLaw waivers

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Case and Care Management techniques• Nurse Navigators and Case Mgrs hired to coordinatetraditional Medicare patients within ACO’s.

• Improved coordination and care planning withcommunity PCP

• Shorter LOS r/t   support “in‐place” discharge setting

• Enhanced home support include the additions of“transition of care” coaches and clinicians

– e.g. “Neurologic Transitions Notebook”

• Stronger medical care support in the SNF ‐ SPECIALISTS

– Geriatricians, Internal Medicine MD’s, Nurse Practitioners

ACO’s develop Post Acute Provider Networks and Care Collaboratives

• ACOs and Hospital Systems use SNF facility surveys, RFP’s to choose partners e.g.

– Re‐admit rates, Medicare LOS, high acuity ‐ SPECIALTY

• ACO’s providing  “rounding teams”: NP’s, hospitalists,and attending MD’s

• These system have quality measures and performancemetrics tied to opportunities for shared savings

• Best practices shared for Quality and Performancemeasures, to achieve ACO goals and systemwideperformance improvement

Still with us?!

• Describe 3 services/criteria that ACOs look for in a RFP when establishing their PAC provider network.A. Low hospital readmission rates; Beneficiary Activation through activity 

classes and groups;  Integrated Home and Outpatient Services

B. High patient satisfaction, Use of Evidenced‐Based Practice, Unit with Hospitalist Chief of Staff and Licensed Clinicians

C. Shorter LOS by DRG; Beneficiary Activation through activity and educational classes & 1:1 sessions; Unit with Hospitalist Chief of Staff and Specialty Practitioners

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ACO & VBP: Implications 

Post‐Acute Care Providers

Implications for Post‐Acute Providers• Potential gain of 10 to 15% of traditional MCR patients

• Reduced hospital re‐admissions divert to SNFs, ILFs, ALFs

• Building infrastructure to treat patients in place

• Providers must follow clinical milestones across continuum

• Standardize information flow across the continuum

• Adapt to shorter Medicare ACO length of stays for ACO continuumcase management patients – rapid recovery

• ACOs require SNF’s to improve transitions to the home setting, closer coordination with PCP's and ACO care mgt programs 

Features and Benefits of Specialty Services

“God is in the Details.” –Ludwig Mies van der Rohe (1886–1969)

Lynn Freeman, PT, PhD, DPT, GCS, CWS

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Clinical Milestones Across Continuum

Example:  TSA Rehab with Tissue Deficient Milestones 

• Historically uncoordinatedleading toduplicationand less thanoptimaloutcomes.

Terminology Soup: Devil in Detail?

• Many providers claim “specialty programs” or “..units”

• Most post‐acute settings do not actually have them

• Important to define and develop on recognized criterion

• Avoid using the terms loosely – activated consumers WILL ask forproof!

‘I am board certified in neurologic care”

Definition of a “Program”

• A brief outline (preferably in writing) of the order to be followed, the features to be presented, and the persons participating

• A plan or system under which action may be taken toward a goal

• A sequence of coded instructions that can be inserted into a process or technique for achieving a result

Merriam‐Webster Dictionary

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Definition of a “Unit” & “Specialty”

Medical Definition of UNIT

• An area in a medical facility and especially a hospital that is specially staffed and equipped to provide a particular type of care <an intensive care unit>

Medical Definition of SPECIALTY

• Something (as a branch of medicine) in which one specializes

Merriam‐Webster Dictionary

Board Definitions of a “Specialty”American Board of Medical Specialties 

• Nationally recognized standards for education, knowledge, experienceand skills…certification goes above and beyond basic medical licensure.

American Board of Nursing Specialties 

• Formal recognition of the specialized knowledge…[certification] reflectsachievement of a standard beyond licensure.

American Board of Physical Therapy Specialties 

• Recognition… [of] advanced clinical knowledge, experience, and skills.

Certification vs. Certificate Program

• Certification: credentialed (nationally recognized)

• Certificate: (not nationally recognized)

NOTE:  “Specialty” DOES NOT = Equipment

General vs. Specialty PracticeGeneral• Heterogeneous Diagnostic Groups

• Comingled Beds/Units

• General Providers

• Standard Clinical Competencies

• General Training

• Logical Reasoning Mandatory

• Regulated General Standards

• General Support Services

• General Quality Audits

• Comparable Outcomes

Specialty• Homogeneous Diagnostic Groups

• Dedicated Beds/Units

• Dedicated Providers

• Advanced Clinical Competencies

• Specialized Certification

• EBP Mandatory

• Regulated Controlled Standards

• Dedicated Support Services

• Practice‐Specific Quality Audits

• Best Possible Outcomes33

NOTE:  “General” DOES NOT = Inferior

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Designing Specialty ServicesEight (8) Key Features and Benefits

1. Dedicated specialization (unit or program) 

and staff

2. Patient‐Centered Care Model

• Evidence‐Based

• Multidimensional e.g. Service Types

3. Regulated Standards

• Brand Standards e.g. Operational 

Management and Quality

• Practice Standards e.g. Reasoning

Processes and Interventions

4. Continuity of Care Services

• Outpatient

• Preoperative (Pre‐habilitation)

• Wellness and Complimentary Medicine

5. Advanced Clinical Competencies

• Certification/Re‐certification

6. Advanced Technologies e.g. 

patient/provider portals

7. Advanced Outcomes e.g. uses valid and

reliable outcome measures e.g. SF‐36

8. Quarterly Appraisals e.g. Specific and

Sensitive to service standards 34

Patient Centered Care

35

Evidence‐Based and Multi‐dimensional

• Several models exist• Select model that is sustainable and consistent withmission and values

• At least these four attributes– "Whole‐person" care.– Coordination and communication– Patient support and empowerment– Ready access

Establishing StandardsEvidence‐Based • Grounded in science vs. best guess “only”

• e.g. focus group with board certified specialist if no evidence available

• Scientific method or equivocal rigor• Market analysis e.g. Buxton Group (customer analytics)• Review of available literature• Formal focus groups

• Profiled consumers• Referral sources

• Brand standards consistent w/market analysis• Practice standards consistent w/evidence

• Patient Management – all disciplines 36

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Continuity of CareRight Care, Right Place, Right Time  

• Access to care*• Seamless transitions to OP, HH,Wellness*• Outpatient• Preoperative (Pre‐habilitation)• Wellness and ComplimentaryMedicine

• Clinical Milestones across carecontinuum

• Rapid Recovery

37*Also a patient‐centered care dimension (Pickard)

Courtesy of eTracker TM Technology

Advanced TechnologiesEfficient AND Effective Integration, Communication, Administration 

• Patient/Provider Portals forseamless communication• e.g. eTracker, MyCare,MatrixCare

• Tele‐medicine and Tele‐health• e.g. cost effective care management 

• Clinical modalities• e.g. electrical stimulation,body‐worn inertial sensors

38

Synchronized, wireless sensors

In a clinic Community Level Monitoring

Health Information Technology/Exchange

39

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Simple and Secure Telemedicine

iPad (iPhone in production)

Courtesy of Vsee

Advanced OutcomesSuperior Performance• Valid and reliable outcome measures

• e.g. Minimal Data Set and SF‐36• Delivery model that consistently yields

• Optimal outcomes• Durable outcomes

• Establish % ≥ norm• e.g.  20% ≥ norm

• Shorter LOS• ICF Gains

• Functional Impairments• Activity Limitations• Participation Restriction

41

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Quality Measures and VPBCMS Nursing Home VPB  Demonstration

• Three (3) year demonstration began in 2009• Arizona ‐ 41, New York ‐ 79, Wisconsin – 62• Tests "pay for performance" concept in SNFs• Assessing performance based on select QMs

• Staffing• Appropriate hospitalizations• Outcome measures from the MDS• inspection survey deficiencies

• Rewards for  performance or improvement

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Key PointThe primary objective of Specialty Practice Model is to achieve optimal outcomes and reduce cost

Same as OthersMost people get average

results

Hmmm…were you listening?!

• Describe 3 essential elements of designing specialty units and programs to meet the demands of value‐based purchasing anduse an evidence‐based approach to identify populations in need of these services.A. Dedicated specialization, State‐Required Clinical Competency, 

Regulated Standards

B. Dedicated specialization, Advanced Clinical Competency, Regulated Standards

C. Dedicated specialization, Standard Technology, Appraisals (QAPI)

Specialty Services 

To Meet the ACO Demand

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Specialty Services Value PropositionFor Patients

• Patient‐centered standards

• Advanced nursing and 

rehabilitation 

• Dedicated MD for higher level of 

physician to patient care

• Dedicated staff for optimal 

experience and outcomes

• Continuity of care services

• Concierge service model with care 

and quality‐based amenities46

For Hospitals/Partners

• Elevated practice standards for seamless care transitions

• Elevated practice standards for reduced hospital readmissions

• Shared‐risk for reduce penalties 

• Shared‐risk for increase performance payments

• Low cost alternative for bundled payments and quality outcomes

• Enhanced physician and patient satisfaction

• Coordinated follow‐up visits for seamless post surgery care

• Meets specialized populations with limited options (CMS 60/40 rule)

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Specialty Services Value Proposition

For Physicians

• Physician‐specific clinical milestones 

and order sets for reduced 

complications and consistent 

outcomes

• Care coordination ‐ seamless 

transitions

• Physician follow‐up visits

• Advanced competency levels for 

optimal clinical outcomes

• Advanced service levels improve 

patient satisfaction  48

Specialty Services Value Proposition

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For Payers

• Low cost alternative for bundled payments and quality outcomes

• Managed care case rate at lower cost than IRF

• Continuity of care – seamless transitions

• Shorter length of stay – rapid recovery

• Durable outcomes – reduced length of stay

• Advanced quality standards reduce rate of re‐hospitalization

• Advanced practice standards maximize care efficacy

• Advanced technologies maximize care efficiency

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Specialty Services Value Proposition

Evidence:  Scientific

“The deepest sin against the human mind is to believe things without evidence.” –Thomas H. Huxley 1825‐1895

• Design:  Retrospective study

• Sample:   115,540 patients (4.6% specialized)

• Purpose: Specialized practice improve colorectal

– Intervention: colorectal resections from 2001 2007 inspecialized or general practice (non‐specialized).

– Comparison:  General practice

• Outcomes:  Cost, length of stay, and mortality; riskadjustments for demographics, comorbidities, acuity ofadmissions, disposition at discharge, payer surgeonvolume.

Rea et al, 2011

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Specialized Practice Reduces Inpatient Mortality, Length of Stay, and Cost in Care of Colorectal Patients Rea et al, 2011

Rea et al, 2011Multivariate Analysis:

• Mortality: Lower risk 0.72 (CI 0.57‐0.90)

• Length of Stay: decreased absolute days difference in days .23 (CI 0.11‐0.49)

• Costs: absolute cost difference $420 less (CI $238 more to $1079 less)

• Results:  Specialization yielded statistically and clinically significant differences.  

– Intervention: Significant ↓mortality (p=0.0044), ↓ length of stay (p= 0.0022), ↓ in cost (p=0.211).  Non‐significant cost at 75% cutoff, but relationship existed between lower hospitalization cost – cost of hospitalization ↓ with ↑ specializa on

• Conclusion:  Specialization lead to reduction in mortality, hospital days, cost for inpatient colorectal care.

Rea et al, 2011

Evidence:  Empirical

“If we knew what it was we were doing, it would not be called research, would it?”Albert Einstein 1879‐1955

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Created as a response to the 2004 CMS 75% rule impacting a percentage of certain diagnostic groupings admitted to Inpatient Rehab Facilities (IRF’s). After modification by CMS the ruling ended in a 60/40 ruling.

Example: 60% Rule limits IRF hospitals from admitting many orthopedic patients with a single hip or knee replacement unless:• The patient is over 85 years old. • Had a body mass index (BMI) over 50, or • They are having bilateral hip or knee surgery.

The ruling forced 40-50% of the patients on the IRF to other venues of care.

Service Line Orthopedics; Service Type Units

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Kinetix:  Service Lines

Specialization  Target DRG (not all inclusive)

Availability

1. Kinetix Orthopedic • Elective Joint Surgeries

• Trauma

Now

2. Kinetix Neurologic • Stroke

• Brain Injury

Under Development

3. Kinetix Cardiopulmonary • Coronary Bypass

• COPD

Under Development

4. Kinetix Metabolic • Diabetic Conditions

• All Wounds

• Amputation

Under Development

Service Types Specialty Units: Specialty Service with dedicated unit and staff Specialty Programs: Specialty Service without dedicated unit (OP, HH)

Service Line Orthopedics; Service Type Units

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• Branded specialty unit in a SNF– Orthopedic specialty

• Dedicated Program Director• Dedicated Patient Transition Representative (PTR)• Dedicated, part-time, contract Medical Director• Orthopedically certified nurses and therapists

– Separate dedicated wing• Separate entrance• Separate therapy room• No co-mingling with long term care population

– Concierge service model• Private rooms• Hotel like atmosphere• Special dining options• TV, Internet

– An attractive high outcome, low cost alternative to hospital units and traditional sub-acute programs in SNFs for payers

Service Line Orthopedics; Service Type Units

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Patient Profile:  Target patient for Specialty Orthopedics

• 50‐80 years old

• Dx knee, hip, spine, shoulder surgery or multi trauma

• Can’t D/C home due to medical complexity

• Experiences an average  LOS  10‐14 days

• In SNFs, inpatient rehabilitation units, and IRFs

• MCR A, MCR Medicare, private insurance, and worker's compensation

• ≥ 80% chance D/C  home

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Each prospective Kinetix location must pass 6 key tests before approval

Market Analysis Must pass six (6) Key Tests

• Initial Buxton  140• DRG analysis supports beds @ 10% share

• Detailed Buxton supports location

• Initial market interviews validate referrals

• Mystery shopping yields no surprises

• Talent assessment validates SNF team readiness

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Revenue to SNF

• Reimbursement for Therapy and residency of ~$595 PPD, increasing 2% per year

• Averages $2.00 per therapyminute for Aegis OCE, a premium rate

Management Fee

Charge per Therapy Minute 

• covers the cost of the non‐therapypersonnel, overhead andcontributes to the profit

• Assumed to increase 2% per year

• covers the cost oftherapy personnel and contributes to profit

• similar to the rate structure used in ourtypical Aegis Therapycontracts

• priced in the range of $1.23 to $1.29 perminute delivered

• Assumed to increase 2% per year

Revenues: Outcomes & Occupancy

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Financial Impact from unit for a single SNF

The consolidated impact on SNF of a SpecialityOrthopedics in a single SNF is significant, regardless of the scenario:• In scenario I (filling

unoccupied beds) the OCE generates a combined EBITDA contribution of $900,000 by year 2

• In scenario II (fillingMedicaid beds) the EBITDA contribution climbs to $1,070,000 by year 2 since Medicaid beds generate a loss to GLCs, on average.

$455,417

$646,691 $638,248 $631,307 $625,816

$80,867

$260,638 $270,027 $279,193 $288,198

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$1,000,000

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Single Facility EBITDA by SourceScenario 1: Filling Unoccupied Beds

$914K

$455,417

$646,691 $638,248 $631,307 $625,816

$80,867

$260,638 $270,027 $279,193 $288,198

$160,469

$163,231 $166,498 $169,830 $173,229

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Single Facility OCE EBITDA Contribution by Source Scenario: Replacing Medicaid Patients

Specialty Units Superior Outcomes10K General patients and 91 Specialty Orthopedic patients.  Patients on Specialtyunit achieved better outcomes, shorter LOS, and returned home more often.

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No dosing off now!

• Translate research findings related to developing specialty services for accountable care organizations and other value‐based‐purchasing payment programs into practice. Which center would be ideal for specialty unit?A. CCRC w/Buxton score of  160, DRG analysis supports beds @15% share,

Hospital closing neuro‐unit on mystery shopping

B. SNF w/Buxton score of  120, DRG analysis supports beds @5% share,Hospital opening neuro‐unit on mystery shopping

C. CCRC w/Buxton score of  175 DRG analysis supports beds @10% share,Hospital opening neuro‐unit on mystery shopping

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Barriers

• Seek “Top of License” Staff • Physical plant (appeal)• Physical plant (space)• Low census  demand• Low census  awareness

Best Practices

• Targeted Selection• Refurbish (vs. rebuild)• Low census wing/ALF• Formal Market Analysis• Dedicated Transition Rep

Questions?

Lynn [email protected]

John [email protected]

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Property of L. Freeman and J. Perticone Page23Do not reproduce without written consent  

(Re)Developing Specialty Services for Older Adults in a VBP Environment 

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