Advanced analytics makes it much easier for health systems and hospitals to succeed in value-based care contracts. This article details how a health system used advanced analytics to reduce out-of-network referrals, emergency department visits, and hospital admissions and readmissions.
At the behest of health insurers and the Centers for Medicare & Medicaid Services, health systems have been moving quickly from fee-for-service to value-based care. Five years ago, no Medicare payments were under risk arrangements. Today, more than 30 percent are, and it’s expected to be 50 percent by 2018.
Similarly, health plans have created many value-based contracts. Estimates suggest there are nearly 900 accountable care organizations (ACOs) serving 31 million Americans, and more than half of them include a hospital. That’s why experts have predicted that by 2018, 90 percent of all hospital payments will be value-based.
The early adopters of value-based care have much to teach those who are just beginning to embrace this evolution. Jody and her health system are one of those knowledgeable teachers.
Jody works for the chief medical officer of a health system. Her health system is comprised of three hospitals, 25 primary care practices, and 37 specialty practices of varying sizes. Many of the physician practices were acquired in the past five years.
Jody’s health system participates in two ACOs: one for its Medicare population and one for a large percentage of its commercial patients. They also have a number of value-based contracts with commercial health plans.
A few years ago, the entire health system converted to the same EHR (electronic health record). The implementation and subsequent use of the EHR had gone smoothly; however, Jody’s health system found significant gaps still existed.
The health system found the EHR captured all of the activity within its network, but they continued to be blind to the clinical events occurring outside of the organization. In addition, the health system wanted a solution that takes in data from all sources – claims, clinical, patient, physician, pharmacy, labs, clinical wearables, and more – and then applies one set of rules to make the data meaningful and actionable. Ultimately, Jody’s health system determined that it needed a 360-degree, real-time view of each patient. And perhaps most importantly, it wanted a multi-payer platform so that all ACOs and value-based contracts could be managed the same way.
That’s why Jody’s health system chose Geneia’s Theon® advanced analytics platform.
Year 1: Remedying the Low-Hanging Fruit & Reducing Out-of-Network Referrals by 5 Percent
During implementation, the health system’s chief medical officer tasked Jody with designing initiatives that would help the health system quickly recoup its investment in the advanced analytics solution.
Jody used the Theon® platform to determine the ‘low-hanging fruit,’ and within five minutes, she identified a severe leakage problem. Next, she used the application to view the overall picture of care being provided to her patients. She quickly determined a large percentage of her patients’ care was delivered out of the health system network. Then she drilled down into the information to look more closely at leakage in specialty care, labs and x-ray, emergency department, and inpatient visits as well as the referral patterns of the affiliated physicians.
Jody’s analysis within the Theon® tool yielded two sources of leakage she wanted to remedy in the first year:
- The out-of-network referral rate for a large, recently-acquired primary care practice was twice the rate of its peers. Jody launched a comprehensive physician and patient education program as well as a new incentive for in-network referrals. Within 12 months, the practice’s referral rate had decreased significantly, to just above the peer average. Jody’s leakage initiative not only increased the system’s revenues but also improved its shared savings from ACO contracts as a result of this practice more efficiently meeting quality measures.
- Of all the services being delivered out of network, gastroenterology – with more than $1 million in out-of-network referrals in the two years prior to implementing the Theon® platform – was by far the most frequent. Upon further review, Jody determined the health system had only one in-network gastroenterology practice, and it was closed to new patients. The health system subsequently added additional staff to the practice, and within six months, these in-network gastroenterologists were meeting more than 70 percent of the demand.
Together, these two initiatives resulted in a five-percent reduction in out-of-network referrals at Jody’s health system in year one. They also improved the care coordination for the associated patients – the men and women whose primary care physicians were in the newly-acquired practice and those in need of gastroenterology services.
Year 2: Reducing Emergency Department Utilization & Costs by $143,000
In year two, the Theon® solution is continuing to improve the system’s performance with its risk-based contracts, specifically to lower the per-member-per-month (PMPM) costs. Like many health systems, significant pain points – also known as opportunities – for addressing costs and quality were:
- Emergency department utilization and cost
- Hospital admissions and readmissions
The Theon® platform dashboard readily and easily provides health system administrators like Jody with a wealth of important information, including the number of patients currently admitted in the hospital, the number discharged in the last 10 days, and the readmit percentage.
Upon closer review of acute care utilization, Jody realized:
- Emergency department visits were significantly higher than the health system’s peer group; approximately 380 emergency department visits per 1,000 patients compared to 260 per 1,000 for the peer group.
- Utilization of urgent care was significantly less than the peer group; approximately 90 urgent care visits per 1,000 patients compared to 155 per 1,000.
Armed with the knowledge that shifting appropriate utilization from the emergency department to urgent or primary care would result in financial savings, Jody leveraged the Theon® platform to pinpoint the opportunities and saved nearly $143,000 on emergency department costs alone.
- Jody used the platform’s drill-down capabilities to identify the providers attributed to the patients receiving services through the emergency department, and any trends.
- She learned one provider group had a very high PMPM cost associated with emergency department visits and 40 percent of emergency department costs were attributed to two provider groups not affiliated with the health system. This level of network leakage was driving up costs for Jody’s health system.
- Jody then outreached to the providers and patients and provided targeted educational information to redirect services to the most appropriate in-network sites of care.
Year 2: Reducing Admissions & Readmissions
The population measures in the Theon® dashboard gave Jody immediate access to populations in the patient panel that:
- Had increasing admission and readmission risk,
- Were currently admitted to the hospital,
- Had been discharged in the last 10 days, and
- Were producing the highest costs.
The population measures showed Jody’s health system had a readmission rate of 7.67 percent. To mitigate the risk for admissions:
Jody investigated patients who had not been seen by a PCP in the past 12 months, yet had a chronic condition, and
She drilled into exactly which high-cost chronic conditions led to readmission among her population of patients. Having this information allowed her to impact admissions and readmissions by ensuring engagement with high-risk populations.
The Theon® solution easily showed Jody the Top 10 Conditions Leading to Readmission. For her patient population, the leading cause of readmissions was heart failure. This knowledge enabled Jody and her colleagues to launch a number of new initiatives, including provider and patient outreach and a remote patient monitoring program to support earlier response to clinical deterioration, which led to a reduction in hospital admissions.
In the words of Jody,
“I’m not sure my health system could have achieved our cost and quality goals and succeeded in our value-based contracts without the Theon® analytics and insights platform. Given our success in years 1 and 2, I am confident the Theon® platform will support our achievement of even more aggressive metrics in the third year of our risk-based contracts.”
*Jody’s experience is an illustrative example based upon the actual experience of a Geneia client. This information is provided for illustrative purposes only. Jody is fictional and not intended to represent any specific person. Any direct similarities to any real person are purely coincidental and unintentional.
Heather Staples Lavoie
Chief Strategy Officer