“It’s hard to focus on Skilled Nursing Facility (SNF) costs when only a small percentage of our members go to such a post-acute care setting.” I hear that frequently from medical directors of health plans and Accountable Care Organizations (ACOs).
In this publication, we will outline key aspects of why focusing on SNF costs and its true contribution to the total cost of care is imperative to clinical leadership in value-based programs – why you should care and what you can do to improve the quality of your member’s care and reduce non-value-added costs for those members.
Let’s start with some eye-opening statistics:
- It’s not uncommon for 2% of members in a Medicare Advantage plan or in a Medicare ACO to spend time in a SNF in any given year.
- The 30-day (SNF to hospital) readmission rate is now 23% (with an additional 13% of SNF patients sent to the emergency room but transferred back to the SNF in those same 30 days).
- The average cost of a Medicare patient’s re-hospitalization is around $15,000.
- The typical average length of stay (ALOS) at a SNF is around 30 days. The SNF length of stay (LOS) is even greater if you remove those patients who were readmitted to the hospital (as two thirds of those readmitted within 30 days occur in the first 15 days at the SNF).
- The average cost per day at a SNF can range from $400-$800. And remember, as compared to a hospital, SNFs are paid on a per diem basis so managing length of stay is crucial.
Now, let’s do the math. We’ll assume that a Medicare Health Plan A has 100,000 members:
- 2,000 members will have a SNF stay during the year.
- With a per diem rate of $600 and a SNF ALOS of 30 days, the SNF stays for these members will have a Medicare A cost of $36 million (2,000 X $600 X 30).
- 23% of these patients (460) will be readmitted back to the hospital, each at an average cost of $15,000 leading to an additional cost of $6.9 million (460 X $15,000).
- Not including the additional Medicare Part B costs associated with physician fees during the SNF and hospital stay, nor the ER costs of the 13% of these patients who returned to the SNF without getting hospitalized, the SNF related costs are over $10 million for these 2,000 members.
- Additionally, another 15% of the patients who leave the SNF and return home are back in the hospital within 30 days, at an additional cost of $2.25 million. Therefore, increasing the cost for these 2,000 members for SNF associated care to over $12 million.
The Bottom Line: Though only 2,000 members of a 100,000 Medicare health plan or HMO will spend time in a SNF in any given year, their SNF associated care costs can easily exceed $43 million when you look at the total cost of care associated with the SNF stay and related readmissions.
So, by now realizing all of this, what can we do about it?
Well first, let’s take a look at some of the challenges health plan clinical staff are up against.
Currently, health plans have little visibility into what is actually happening to members during their SNF stay. One ACO medical director reported that “our utilization management nurses (UM) struggle to even get updates once a week so that we can even have a small impact on the SNF ALOS. Additionally, our case managers (CM) only get involved when the patient leaves the SNF (if they are even made aware of the discharge).” But with this new, rather alarming, perspective on this relatively small but very costly population, it begs the question – what can be done to improve the management of this population?
We first must get real-time visibility into our members’ SNF care. Another health plan medical director reports, “Our UM nurses have recently gotten access to the SNF’s electronic health records (EHRs), but the documentation is so fragmented that it is hard to really know what is going on. Navigating the whole record to find a time-sensitive interventional moment that could mitigate the risk of a preventable readmission or minimize avoidable SNF days (where a member could safely be cared for in the community) still feels like an impossible task. And, if you’ve seen one SNF EHR, you’ve seen one SNF EHR. It seems like every SNF in our network is using a different EHR vendor.”
So, what can you do to get out of this quagmire? Glad you asked!
Real Time Medical Systems (Real Time) is the leading HITRUST CSF certified, post-acute analytics solution that is being used by health plans and HMOs across the country to reduce SNF readmissions and lower SNF ALOS and working with over 2,300 SNFs nationwide.
Great, but what does Real Time do?
- Access Live SNF EHR Data: Real Time grabs structured (e.g., demographics, vital signs, lab data, etc.) and unstructured data (e.g., physician notes and orders, nursing, and therapy notes, etc.) from all major SNF EHRs to provide clinicians with live alerts at a moment when a timely intervention could mitigate or eliminate the risk of a preventable hospitalization.
- Obtain Data from Any EHR: The issues related to fragmentation of the documentation in any one SNF EHR and the variability across EHRs goes away as Real Time’s technology “normalizes” the data such that key information is easily accessible and similarly appearing no matter which EHR is being used by the SNF.
- Reduce & Avoid Unnecessary SNF Days: The Real Time solution also organizes the physical and cognitive functioning of each patient alongside other key clinical information. This enables health plans to reduce potentially avoidable days at the SNF by delivering real-time insights into when it is appropriate to transition the patient safely back to the community – reducing both LOS and avoidable SNF to inpatient readmissions.
- Receive Real Time Notifications On-The-Go: The Real Time mobile app (available for both Apple and Android phones and tablets) delivers live secure messages that alert the treating physicians and nurse practitioners to interventional moments that they need to know about in a timely way. The mobile app also brings a consolidated and up-to-date, clinical summary of every patient the clinician serves – making clinical rounds more effective and efficient for SNF-employed clinical leaders and the treating primary care physician teams. On call doctors value the mobile app as they can now make even more informed clinical decisions by having the patient’s diagnoses, previous orders and vital signs, labs, code status, etc. right at their fingertips.
- Utilize Shared PAC Network Performance Data: Real Time’s analytics solution provides both the health plan and the SNF the ability to work off the same data and reports. Through the solution’s interactive graphs, real-time alerting, and reports (which are updated as data is entered into the SNF EHR), HMO and ACO clinical leaders can hold their SNF network (and their own CMs) more accountable. Gone are the days that the HMO must wait for claims data to come in to understand the performance of their SNFs.
- Live Reporting to Prevent Readmissions: Real Time’s report that showcases the prior 72-hours of alerts for those readmitted enables HMO clinical leaders to assess whether the SNF staff and/or the SNF physicians were leveraging such alerts and intervening appropriately. No longer do HMO readmission review meetings with their SNF network and their SNFists (post-acute hospitalists) must occur without the HMO or ACO having some meaningful details about whether the readmission was potentially preventable.
Now that we have re-examined the true value in reducing SNF readmissions and SNF ALOS, as well as learned how Real Time’s cutting-edge post-acute analytics solution can provide live visibility into the care of your SNF network and offer a solution to ease or eliminate that “pain point”, why not learn more about how Real Time can improve the care of your members and significantly impact your bottom line. You’ll be glad you took the time to do so!
Steven M Stein MD, MHS
Chief Medical Officer, Real Time Medical Systems