Promises and pitfalls of payment reform in post-acute care: Moving to episode-based payments

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1 Promises and pitfalls of payment reform in post-acute care: Moving to episode-based payments Erik Hellsten Health Quality Ontario GTA Rehab Network Best Practices Day May 5, 2014

2 QBPs and post-acute care: where s the link? Original policy objectives of Quality-based Procedures (QBPs): Payment for a patient s full episode of care, spanning multiple settings and providers ( the bundle ) Prices for episodes linked with quality of care To date, outside of early funding changes for hip and knee replacement rehab, post-acute care has been absent from QBP funding reforms Despite being a major component of both stroke and hip fracture care, QBP funds acute inpatient activity only Quality-based pricing concept has not yet been operationalized HQO s episode of care analyses in these areas provide the information necessary to construct potential models We may be able to learn lessons from the US health reform policy direction here

3 if there were no variation in post-acute care spending, the variation in total Medicare spending across hospital referral regions would drop by 73% Compare with only 27% for acute care spending variation Key drivers of PAC variation: variation in discharge settings for same types of patients (IRFs vs. SNFs vs HH), readmissions

4 HQO s episode of care analyses have found similar regional variation in PAC costs and utilization in Ontario Hip Fracture Episodes: 90 Day Post-Acute Care Costs by LHIN of Patient Residence (2007/ /09) $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 Discharge to CCC: From 2.2% to 23.6% 90 day readmissions: From 9.7% to 17.9% Discharge to inpatient rehab: From 12% to 59.6% Cost by service Home care Long-term care Inpatient rehabilitation Complex continuing care ED Visits Readmissions - Physician Readmissions - Hospital $0

5 Bundled payments and post-acute care: a match made in heaven? Key issues: - optimal episode duration - risk adjustment - quality - contracting and accountability

6 What is the optimal episode duration? Examining 30, 60 and 90 day post-acute stroke episodes $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 Post-acute care Post-acute physician fees Post-acute ED visits Readmissions Home care Long-term care Complex cont. care Inpatient rehab Index physician Index ED Index hospital $5,000 $0 $ CDN 30 Days 60 Days 90 Days

7 Odds Ratio Odds Ratio Risk adjustment: impact of non-disease factors on cost and utilization Post-medical discharge short stay home care episodes Predictors of nursing services Predictors of PT/OT services

8 Pricing for quality: one potential approach

9 Variation in post-acute care for total joint replacement, circa but is there evidence to suggest the variation is inappropriate? 9

10 In this case: yes

11 Some options for pricing strategies based on the home-based rehabilitation policy LHIN Number of Cases Average Acute Inpatient Cost Average Physician Claims Acute Hospitalization Average Inpatient & Physician Cost Price based on best practice performer % Rehospitalized within 30 days (Cost) % Discharged to Inpatient Rehabilitation (Cost) Post-Acute Care % Discharged to Home with Home Care (Cost) Price based on provincial average cost Post- Acute Care Cost All Services Total Episode Cost Ontario 26,538 $10,125 $2,409 $12, % ($11,040) 28.6% ($5,637) 47.8% ($977) $3,328 $15, ,537 $10,244 $2,305 $12, % ($16,205) 17.8% ($5,503) 56.8% ($975) $3,017 $15, ,706 $9,773 $2,049 $11, % ($7,590) 6.6% ($7,994) 71.7% ($909) $2,097 $13, ,523 $10,177 $2,213 $12,390 Price 3.3% ($10,450) based on 9.8% ($6,384) 73.3% ($1,057) $2,358 $14, ,578 $10,488 $2,477 $12,966 performer 3.3% ($10,910) 11.5% ($7,864) 62.7% ($1,007) $2,592 $15, $10,508 $2,731 $13,239 closest 3.9% ($12,444) to target 59.0% ($5,757) 17.3% ($1,026) $5,113 $18, ,711 $10,031 $2,631 $12, % ($10,221) 35.0% ($6,736) 34.5% ($973) $3,935 $16, ,836 $10,321 $2,637 $12, % ($14,498) 45.9% ($6,174) 32.3% ($988) $4,546 $17, ,409 $10,035 $2,866 $12, % ($13,245) 56.3% ($5,934) 23.2% ($1,012) $5,130 $18, ,919 $9,935 $2,477 $12, % ($11,471) 44.4% ($4,854) 35.7% ($944) $3,936 $16, ,430 $10,294 $2,129 $12, % ($11,865) 9.0% ($7,349) 68.0% ($1,044) $2,486 $14, ,698 $9,950 $2,363 $12, % ($10,970) 45.0% ($3,580) 22.9% ($820) $3,057 $15, ,105 $10,181 $2,262 $12, % ($11,356) 17.5% ($5,520) 64.5% ($986) $2,704 $15, ,559 $10,106 $2,251 $12, % ($8,164) 13.0% ($5,683) 57.6% ($969) $2,630 $14, $9,857 $1,929 $11, % ($9,402) 33.5% ($6,964) 59.9% (1,143) $4,518 $16,304

12 Can we apply a similar approach for stroke? The best available estimates suggest that approximately 40% of stroke patients are candidates for inpatient rehabilitation at discharge from acute care, yet only 24% were discharged to inpatient rehabilitation in 2010/11 Based on the Rehabilitation Patient Group (RPG) methodology, patients in RPG 1160 on admission to inpatient rehabilitation have, by definition, an admission FIM score >100 and therefore rehabilitation should occur on an outpatient basis. Meyer et al. (2012) The Impact of Moving to Stroke Rehabilitation Best Practices in Ontario

13 Episode pricing based on the best performer? What about other performance criteria? What about cost? $22,500 $20,000 $17,500 $15,000 $12,500 $10,000 Post-acute physician Post-acute ED visits Readmission Home care $7,500 Long-term care $5,000 $2,500 43% discharge to inpatient rehabilitation Complex continuing care Inpatient rehab $

14 Thank you.