Bundled Payment: 15,000 Its Time to Get Real 10,000 $11,079 5,000 - PDF document

Avg. 2008 Medicare Payment for Select DRGs 25,000 20,000 Bundled Payment: 15,000 It’s Time to Get Real 10,000 $11,079 5,000 Robert Mechanic, MBA $6,437 $6,075 $5,347 $5,322 Brandeis University 0 470 ‐ Maj. Joint 194 ‐ Pne w/CC 292 ‐ Heart Fail 683 ‐ Renal 190 ‐ COPD Estes Park Institute w/CC Failure w/CC w/MCC March 26, 2012 Index Admission Source: RTI Inc, Post ‐ Acute Care Episodes: Expanded Analytic File, June 2011 2 2008 Medicare Acute and Post ‐ Acute Payments 2008 Medicare Acute and Post ‐ Acute Payments for Inpatient ‐ Initiated 30 ‐ Day Episodes for Inpatient ‐ Initiated 90 ‐ Day Episodes 25,000 25,000 $21,967 $20,672 $20,195 $19,102 20,000 20,000 $16,590 $16,842 $15,472 $14,196 $14,726 15,000 15,000 $12,419 10,000 10,000 5,000 5,000 0 0 470 ‐ Maj. Joint 194 ‐ Pne w/CC 292 ‐ Heart Fail 683 ‐ Renal 190 ‐ COPD 470 ‐ Maj. Joint 194 ‐ Pne w/CC 292 ‐ Heart Fail 683 ‐ Renal 190 ‐ COPD w/CC Failure w/CC w/MCC w/CC Failure w/CC w/MCC Index Admission Post Acute Index Admission 30 day Post Acute 90 day Post Acute Source: RTI Inc, Post ‐ Acute Care Episodes: Expanded Analytic File, June 2011 Source: RTI Inc, Post ‐ Acute Care Episodes: Expanded Analytic File, June 2011 3 4 Post ‐ Acute Care Spending For 30 ‐ Day Post ‐ Acute Care Spending For 30 ‐ Day Episode: DRG 470 – Maj. Joint Repl. Episode: DRG 292 – Heart Fail. With CC 94% Percent of Beneficiaries Discharged Directly to Post ‐ Acute Care 39 Percent of Beneficiaries Discharged Directly to Post ‐ Acute Care Percent With Mean Cost Per Percent With Mean Cost Per Claim Service User Claim Service User Index Admission 100.0% $11,079 Index Admission 100.0% $5,322 Rehab 12.7% $13,021 Rehab 2.9% $16,744 SNF 39.4% $9,347 SNF 48.6% $13,222 LTAC 0.3% $32,298 LTAC 1.6% $35,233 Home Health 68.6% $3,538 Home Health 66.2% $4,422 Readmission 11.7% $12,798 Readmission 41.8% $17,682 5 6 Source: RTI Inc, Post ‐ Acute Care Episodes: Expanded Analytic File, June 2011 Source: RTI Inc, Post ‐ Acute Care Episodes: Expanded Analytic File, June 2011

Post ‐ Discharge Cost Distribution: CHF (90 Days) Bundle Building Activities 50th 75th 25th • Episode Construction − Individual versus pooled DRG bundles − Align with clinical improvement strategy • Exclusions $60,000 − Cannot exclude patients in selected DRGs $ 40,000 − Readmission exclusions $20,000 − Part B service exclusions • Episode length (30 – 180 days) • Risk adjustment 8 Examples Episode: Total Joint Replacement Percent Pct. Total Inpatient $ Episode $ DRG 469 Maj. Joint Replacement w/MCC 0.7% 0.7% DRG 470 Maj. Joint Replacement w/o MCC 5.1% 4.2% St. Francis Hospital Episode Total 5.8% 4.9% Opportunity Analysis Episode: CHF Admission Percent Pct. Total Inpatient $ Episode $ DRG 291 Heart Failure & Shock w/MCC 1.6% 2.0% DRG 292 Heart Failure & Shock w/CC 0.8% 1.2% DRG 293 Heart Failure & Shock w/o CC,MCC 0.4% 0.6% Episode Total 2.8% 3.8% 9 10 Episode Spending by Setting: TJR Facility Profile: St. Francis Hospital 11 12

Episode Spending by Setting: CHF Peer Group Benchmarking: CHF Episode 13 14 Performance of Post ‐ Acute Facilities Another View of Risk in The CMS Pilot? Saint Francis Hospital Patients Congestive Heart Failure 100% 80% 60% 100.0% 40% 20% 40.0% 4.0% 0.2% 0% Total revenue Medicare Episode DRGs 3% CMS inpatient Discount revenue Source: RTI Inc, Post ‐ Acute Care Episodes: Expanded Analytic File, June 2011 15 16 What Next? Questions • Assess the opportunity Robert Mechanic • Identify physicians you can work with The Heller School for Social Policy & Management – Gainsharing opportunity may help The Health Industry Forum • Identify post acute care partners Brandeis University • Establish a unit to work with patients mechanic@brandeis.edu www.healthforum.brandeis.edu after they leave the hospital • Establish a monitoring system Brandeis University 18 17