Use and Value of Data Analytics. Comparative Effectiveness Study Inpatient Rehab Hospital (IRH) vs. Skilled Nursing Facility (SNF)
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1 Use and Value of Data Analytics Comparative Effectiveness Study Inpatient Rehab Hospital (IRH) vs. Skilled Nursing Facility (SNF) Ryan Wilson Vice President of Managed Care HealthSouth Corporation Gerry Smedinghoff Manager, Healthcare Actuarial KPMG
2 Today s Presentation HealthSouth and the Opportunity Data Journey Need for Data Analytics Lessons Learned Unique Characteristics of Study Design Final Thoughts Challenges Available Data Study Design and Value Proposition Study Findings Total Cost of Care Readmission Average Length of Stay 2
3 3
4 What Prompted HealthSouth s Interest in Data? 1. Attention to Post-Acute Care (PAC) Sector Federal cost-cutting interest 2. Confusion between segments of PAC sector Payers, patients and families and even referring physicians may not know or appreciate the distinctions between LTACH, IRH & SNF. 3. Desire to differentiate our sector: Inpatient Rehabilitation Facilities (IRFs) 4
5 Medicare Spending on PAC Services 1.8% 2.1% 2.2% 2.1% 1.9% 1.5% 1.4% 1.3% 1.2% 1.2% 1.2% 1.2% Inpatient rehabilitation spending (% of total Medicare spending) Total Medicare Spending on Post-Acute Services $62 billion in 2012 $40 $30 $20 $10 $ Skilled nursing facilities Home health agencies Inpatient rehabilitation facilities Long-term acute care hospitals Sources: Center for Medicare & Medicaid Services, Medicare Trustees Report May 2013 Page 10, MedPAC Report to the Congress March 2013 pages 158, 188, 216, 238; MedPAC Databook, Healthcare Spending and the Medicare program, June 2013 page 122 5
6 How to Tell an IRF from a SNF Average Length of Stay (1) Rehab Hospital = 13.0 days Discharge to Home (percent) (2) = 81.1% Requirements: Rehab hospitals must also satisfy regulatory/policy requirements for hospitals, including Medicare hospital conditions of participation All patients must be admitted by a rehab physician. Rehab physicians must re-confirm each admission w/n 24 hours. All patients, regardless of diagnoses/condition, must demonstrate need and receive at least 3 hours of daily intensive therapy. All patients must see a rehabilitation physician in person at least 3 times weekly. Rehab hospitals required to provide 24 hour, 7 days per week nursing care; many nurses are RNs and rehab nurses. Rehab hospitals are required to use a coordinated interdisciplinary team approach led by a rehab physician, includes a rehab nurse, a case manager, and a licensed therapist from each therapy discipline who must meet weekly to evaluate/discuss each patient s case. Rehab hospitals are required to follow stringent admission/coverage policies and must carefully document justification for each admission; further restricted in number/type of patients (60% Rule) Average Length of Stay (2) Covered Days per Admission (1) Nursing Home = 30 days = 27.2 days Discharge to Home (percent) (2) = 45.5% Requirements: No similar requirement; Nursing homes are regulated as nursing homes only No similar requirement No similar requirement No similar requirement No similar requirement. SNF patients must be seen once a month by a physician (not necessarily a rehabilitation physician) No similar requirement No similar requirement; Nursing homes are not required to provide care on a interdisciplinary basis and are not required to hold regular meetings for each patient. Nursing homes have comparatively few policies governing the number or types of patients they treat. (1) MedPAC, Report to the Congress: Medicare Payment Policy, March 2013 Pages 218 and 167 (2) Centers for Medicare and Medicaid Services, FY 2012 SNF-PPS Final Rule, 76 Fed. Reg , 48525, and (August 8, 2011); March 2005 report in the Archives of Physical Medicine and Rehabilitation ( 6
7 The Challenge/Opportunity How do we connect the dots?? Numerous clinical journals have documented the superiority of clinical and functional outcomes achieved by IRH compared to SNFs for appropriate patients Do superior clinical outcomes translate into lower cost on a Total Cost of Care basis?? 7
8 The Journey 1 Select a third party/parties to objectively quantify the Inpatient Rehabilitation Hospital total cost of care advantage 2 RFP Process and interviews 3 Consulting expertise coupled with actuarial expertise 4 Industry recognized and respected experts 5 Outcomes were not guaranteed 6 Big commitment in resources, both time and financial with significant risk/reward potential 8
9 The Journey (continued) 1 Step-by-step process: a. Establishing goals b. Choosing a partner c. Identifying data source d. Developing methodology e. Analyzing results f. Communicating the findings 9
10 Research Hypothesis Hypothesis Compared to SNFs, IRH s focus on rehabilitative care results in patients: Being discharged from the acute care setting earlier Show higher functional improvement during rehab Have a shorter length of stay in rehab Have lower acute care hospital readmission rates Have a lower average total cost of care 10
11 Obstacles-Challenges for HealthSouth There are no valid industry-wide metrics (e.g., JD Power) to evaluate cost and quality of post-acute rehabilitative care Most current research is at facility (i.e., SNF vs. IRH), not the patient, level Stand-alone metrics of ALOS, cost per day and readmissions are meaningless Most valid quality metric FIM Gain is not on standard health care claim 11
12 Obstacles-Challenges for HealthSouth Need to create valid metrics that avoid the two most common quality control (QC) definitional errors Assuming that Use = Value e.g., does longer LOS = better/worse level of care Failing to control for inputs e.g., higher hospital mortality rates often reflect A focus on older Medicare patients more likely to die Higher quality centers of excellence that attract the most severe cases Need to create homogeneous categories for proper comparison 12
13 From Traditional Data Analysis to Modern Data Analytics Traditional Data Analysis Modern Data Analytics Digitize handwritten data Merge multiple datasets Process by computer instead of humans Across business and technology platforms Answer familiar questions Provide new views Mathematical calculations Accounting and payroll applications Data organization and retrieval What do customers look like before they come to us? What do customers do after they leave us? What does the entire customer look like? 13
14 Available Datasets HealthSouth Internal Patient Records 72,000 admissions for 58,000 stroke patients from January 1, 2010 June 30, 2013 Detailed metrics such as Functional Improvement Measure (FIM) gains Only show cost and quality of HealthSouth care, not Total Cost of Care or competitor comparisons CMS National Medicare Fee For Service (FFS) Claim Data 62% of HealthSouth patients are Medicare CMS restrictions prevent release of Professional and Rx data required for this analysis 14
15 Available Datasets (continued) BHI Dataset Nationwide in coverage with total cost of all care 202,650 de-identified members with stroke diagnosis from January 1, 2010 June 30, 2013 Consecutive years increases sample size and allow patient level durational analysis 15
16 Study Design Focus on one specific condition (stroke) to control for inputs Target patients defined as admitted to a rehabilitation facility (IRH or SNF) following discharge from an acute care hospital for stroke Define Quality/Total Cost of Care of all health plan expenses in three periods, combined with LOS and readmission metrics: Pre-stroke: 90 days prior to hospitalization for stroke Stroke: from hospital admission for stroke thru rehab facility discharge Post-stroke: 90 days following rehab facility discharge 16
17 Key Unknowns of Data Analytics Studies You don t know what to look for until you know how to look for it You don t know how to look for it until you find out what data you have You don t know what s in the data you have until you look for the opposite of what you expect to find Exponentially declining trends: airline and auto fatality rates Steady state (flat) trends: skydiving fatality rates Increasing trends: motorcycle fatality rates Disease/condition (stroke): treatable or subject to improvement Aging/disease (retina): untreatable or managing a process to failure 17
18 Data Challenges and Problems Causing Delays and Requiring Rework Definition issues in claim data Identifying facility type: hospital vs. SNF vs. IRH Defining an inpatient stay Consecutive billings of single extended stay Series of therapy sessions with start/end dates that resemble inpatient Professional claims coded as inpatient Category of service: conversion of emergency room costs to inpatient Bundling of services as inpatient vs. subcontracted professional and outpatient 18
19 Lessons Learned From Data Validation Data Validation Findings Some rehab facility claims could not be classified and were categorized as Undefined Minor anomalies and errors affecting < 1.0% of cases are inevitable Research results and conclusions are relative, not absolute 19
20 Value Proposition Data Analysis: Revised Study Design The study design was revised based on the data available, the validation results, the provider landscape and observed patient behaviors: Patient Cohorts HealthSouth (HLS) Non-HLS IRH SNF Undefined Severity Moderate DRGs 65 & 66 Severe DRGs Stroke with complications Continuum of Care Pre-Stroke Stroke Post-Stroke 90 days claims data prior to stroke Days of Acute and Post Acute Hospitalization 3 30/60/90 days claims data after stroke Cost Category Home Health Acute Care Outpatient Pharmacy Professional Post-Acute (Rehab) Other Step 1: Three Continuum of Care periods were defined to assign key insights to relative periods and enable segment comparisons Step 2: Four Cohorts of Place of Service (POS) were identifiable Step 3: Seven relevant Categories Of Service (COS) were defined to analyze the costs incurred across the continuum of care Step 4: Stroke patients were sub-divided into three categories by industry standard DRG categories, Moderate, Severe and Other 20
21 Total Cost of Care Analysis Results IRF costs are comparatively lower in each of the three care continuum phases DRG's Total Averages Across Phases $73.K $97.9K $100.7K $83.6K $7.2K $15.7K $7.7K $8.9K $15.1K $24.6K $20.7K $18.1K Pre Stroke Stroke Post Stroke IRF SNF Undefined Rehab All Targeted Stroke Patients in Data Set Patient Volume 1,068 2,181 8,885 IRF SNF Undefined Rehab All 12,134 stroke Target Members IRF s had the lowest cost of care in each three stroke phases 21
22 Readmissions Key Findings IRF patients have the lowest total costs in each of the three 30 day segments of the 90 day post-stroke period With an average post-stroke readmission rate half of Skilled Nursing Facilities, significant savings can be realized by utilizing IRF s. IRF patients have the lowest total costs in each of the three 30 day segments of the 90 day post-stroke period IRF patients have the lowest Acute Inpatient readmission costs in each of the three 30 day segments of the 90 day post-stroke period Average Percentage of patients readmitted (during the 90 day post-stroke phase) Post-Stroke (90 days after discharge from postacute) IRF 13.3% SNF 24.2% SNF readmission rate is about 2X greater than IRF ~10.9% More SNF Patients Readmitted x $32,372 = $352,855 Average Readmissions Rate Advantage of IRF over SNFs per 100 Stroke Patients Average acute readmission cost during Post-Stroke period for Target Members Average Readmission Savings Generated from IRF over SNF per 100 Stroke Patients 22
23 Average Length of Stay (ALOS) Analysis Average Acute Care Inpatient Days by Cohort by Phase Pre-Stroke Stroke Post-Stroke Overall All 12,134 Members IRF SNF Undefined Average Rehab Care Days by Cohort by Phase Pre-Stroke Stroke Post-Stroke Overall All 12,134 Members Highlighted cells -significant data points IRF SNF Undefined
24 Study Refinements to Normalize Patient Cohorts IRH cohort patient advantages Average age six years younger Pre-Stroke phase Cost 50% less 64% less inpatient days 88% less rehab days Stroke phase 50% less acute inpatient days Cohort refinements Stroke severity Moderate DRGs Severe DRGs Co-morbidities Other DRGs Age bands < 65 vs. > 65 < 55 vs Readmitted vs. not readmitted 24
25 Unexpected Study Findings 01 More than two-thirds of patients hospitalized for a stroke are discharged to the home and never enter a rehab facility 02 Original definition of stroke did not produce desired level of target patient homogeneity 03 Measured IRF advantages for all metrics were both large and consistent, regardless of level of refinement 04 30, 60 and 90 day post-discharge readmission rates declined consistently for all post-acute facility types 25
26 Unique Characteristics of Study Design 1 Patient-Focused Cost, quality and outcomes measured at patient level, not provider level 2 Controls for inputs Homogeneous patients with specific profile of hospitalization for stroke, followed by inpatient rehab 3 Longitudinal study period From 90 days prior to stroke thru stroke incident to 90 days after completion of rehab 4 Total cost of care Measure all categories of care delivered to patients, not just for a specific provider category, care setting or incident 5 Measure interactions of all available variables and metrics Age, cost, acute and rehab LOS, acute and rehab readmissions (return to work not available in dataset) 26
27 Findings Summary Study clearly demonstrated that IRF s have a cost advantage over SNF s: In every phase of care For every sub-category of patients Regardless of efforts to control for inputs 1: SNFs have much higher readmission rates (24%) than IRFs (13%) 2: IRFs have much lower ALOS than SNFs 3: IRFs have a lower total cost of care for stroke patients. 27
28 Bringing the Pieces of Care Together Age Inpatient Rehab LOS Cost & Utilization during a stroke Cost & Utilization >90 days to stroke Pharmacy Cost 28
29 Bringing the Pieces of Care Together (continued) Stroke Diagnosis: Moderate, Severe, Other Acute Hospital cost Inpatient Rehab Costs Outpatient Cost Readmissions Professional Cost Cost & Utilization during a stroke Age FIM Gain Total Cost of Care Inpatient Rehab Admissions Acute LOS Home Health Cost 29
30 Final Thoughts: These Findings Can 1 Reorient provider s understanding of rehab options 2 Assist patients and families in medical decision-making 3 Improve payor s decision-making algorithms for IRF s and SNF s 4 Promote wise use of limited health resources 5 Fulfill the promise of patient access to appropriate care 30
31 General Lessons Applicable to Future Studies Key Considerations for Future Studies Requiring Significant Rework to Define: Disease or condition to study (diagnosis codes and priority: primary vs. secondary) Study period(s): pre-treatment, treatment and post-treatment Target patients Classification of claims and costs (chemotherapy drugs) Study baseline and competitors 31
32 General Lessons Applicable to Future Studies (continued) Not treated or non-customers Stroke patients discharged home (healthier or have home support?) Cancer patients that choose not to be treated (terminal or change carriers?) Censoring impacts of mortality and coverage 85% of target patients covered thru 90 day pre-admission and post-discharge windows Relative results did not change when partial coverage patients removed Continued coverage rate deteriorates to 50% after 12 months 32
33 Total Reimbursement for Care Patient Distribution 33
34 Total Reimbursement for Care Category: Surgery 34
35 Total Reimbursement for Care Comparison 35
36 Future of Health Care Data Analytics Aggregation of data sets opens field with limitless potential for new research HIPAA concerns restrict patient-level analysis Sub-groups must be greater than ten patients Four or five organized data elements can identify an individual Most important developments Shift from provider cost and utilization metrics to patient recovery and health Potential to combine claim payment data with patient clinical data such as FIM Increased pricing and clinical transparency will favor the best platforms of specialized focused care 36
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