As Medicare and private insurers continue to struggle with implementing accountable care organization- and population-linked payments, an increasing amount of attention is being paid to a less expansive but almost as complex method of shifting risk to hospitals and physicians: paying a fixed price for an episode of care, or bundling.
Who Owns What Happens Next?
May 9, 2016
By JEFF GOLDSMITH
As Medicare and private insurers continue to struggle with implementing accountable care organization- and population-linked payments, an increasing amount of attention is being paid to a less expansive but almost as complex method of shifting risk to hospitals and physicians: paying a fixed price for an episode of care, or bundling. The key question about bundling is: Who owns the responsibility for assuring a successful recovery from clinical interventions?
Bundled payment is designed to focus attention on care coordination and delivering a complete clinical solution to a complex medical problem. Unless resource consumption and the patient’s progress through the episode are managed tightly, hospitals and others accepting bundled payments are at risk of significant operating losses as well as poor clinical results.
Acute care over quickly
As most of my friends and all of my family know, I spent a good portion of 2015 intensively using the health system I have worked in for 40 years. It was an eye-opening experience. Beginning in December 2014 with a scary cancer diagnosis, then nerve grafting in my right hand in October 2015 and a hip replacement in November, I experienced three surgical interventions in three different places (two academic health centers away from home and my local community hospital in Virginia). All of the interventions were successful, and after a period of recovery and rehabilitation, I returned, healthy and disease free, to my active life.
The biggest surprise in my patient experiences: how fast the acute phase of my care was over! In two of my three surgeries, I was out on the street with a sheaf of discharge papers in my hand, barely conscious of the magnitude of the intervention within 24 hours of waking up from surgery. In the third case, pain control issues prolonged my hospital stay for about a week.
Having surmounted the intensive procedures, however, the real risks lay ahead in recovery. This took place at home and, in two cases, at the home of family friends. My principal caregivers were family members. The immediate aftermath of surgery exposes the patient not only to infection but also cardiac problems, possible drug reactions and the risk of bleeding in the affected area. It is a fraught period both for patients and for family caregivers, who often by default are the ultimate guarantors of service continuity and their loved one’s safety.
Traditionally, the hospital’s responsibility ended abruptly upon discharge. In candor, the discharge process often was not focused on patient outcomes. In many institutions, the main focus was on clearing the bed and making sure the patient had a safe ride home. All too often, patients were “thrown over the fence” in hopes the family was ready to catch them.
This sudden cessation of responsibility poses a great risk not only to the patient but to the hospital under present Medicare payment rules if the patient re-presents to the hospital as an “unnecessary” readmission. Under bundling, however, excessive or poorly coordinated aftercare will expose the care system to unreimbursed post-acute costs as well as poor outcome and patient satisfaction scores. The “transitions of care” that take place after the acute phase are the biggest challenge to care systems under bundling.
As can be seen from this graphic, each type of medical problem has its own ecology of post-acute service use. When we look at different episodes, the majority of costs are not for acute care but rather for physician services, home health, rehabilitation and skilled care in most clinical problems (valve repair being the notable exception).
Scheduling and coordinating all these services is a huge challenge, all too often left to the family or the patient. This hassle is followed directly by the logistical challenge of showing up for the services. Each service may require the patient to reregister, provide a history and submit to screening and assessment. It is an exhausting gantlet of duplicative information provision, telephone appointment trees and medical record transfers.
The harder part, however, lies in figuring out whom you should rely on to provide the services, in what sequence the services are needed and what constitutes a successful conclusion of the service provider’s work. Again, all too often, the family and dazed patient are on their own. On top of these challenges is the flood of medications the patient is engulfed in, each with its own set of risks and potential harmful interactions. The older or more challenged the patient, the more professional help is required, often in the form of a geriatric care manager.
Jeff Goldsmith is national policy advisor for Navigant
