1
How innovative care delivery models and tecHnologies are breaking tHe cycle of unnecessary Hospital admissions
Post-Acute Care & Beyond
uncommon clarity
Q4 / 2012
Industry Perpsective
TRIPLE-TREE.COM2
Founded in 1997, TripleTree provides independent, research-driven advisory
services on mergers and acquisitions, recapitalizations, divestitures and raising
growth capital for innovative companies in healthcare.
We are continuously engaged with decision makers across the sector including
best-in-class companies balancing competitive realities with shareholder objectives,
global companies seeking growth platforms, and financial sponsors assessing
innovation investments or first mover opportunities.
Tabl
e of
Con
tent
s
20 / SKILLED NURSING / REHABILITATION
22 / HOME HEALTH
24 / DME / HME / INFUSION
25 / HOSPICE
29 / TREATMENT IN PLACE – The Most
Impactful Mode Of Care For Reducing
Unnecessary Admissions
31 / SUPPORTING TECHNOLOGY PROVIDERS
34 / INTEGRATED CARE & CARE COORDINATION
39 / LOOKING AHEAD
Q4industry perspective
05 / MAJOR TRENDS AND MARKET FORCES
6 / A PERFECT STORM IS LOOMING
13 / UNDERSTANDING READMISSIONS
16 / A CALL TO ACTION
17 / PAYERS
17 / PROVIDERS
18 / CONSUMERS
19 / POST-ACUTE CARE – Solutions To Organize
Care, Engage Consumers / Patients / Members,
And Reduce Unnecessary Inpatient Utilization
TRIPLE-TREE.COM4
EXECUTIVE SUMMARY
Health reform is still taking shape as 30 million additional
Americans enter the U.S. healthcare system. Beyond
improving access, a paramount objective of the “Patient
Protection and Affordable Care Act” (PPACA) is to create
integrated care and payment models that demand higher
degrees of accountability and drive improved health outcomes.
Today, care delivery in the U.S. is highly fragmented and
plagued with little coordination and communication across
the healthcare system. Physicians are encouraged to narrow
their focus and are trained to become experts in very specific
medical disciplines, and many healthcare strategists argue
that delivery models with greater focus and more repetitions
(commonly referred to as “focused factories”) improve
outcomes. While this “practice makes perfect” model has
shown signs of success within each silo, it undermines the
importance and value of care coordination between them.
Unnecessary hospital admissions account for more than $26
billion 1 in excess cost, burdening the healthcare system today,
a number that is poised to escalate as more Americans access
our disjointed care delivery system.
One in every ten hospital admissions could have been
avoided with 6% coming from avoiding chronic condition-
related admissions and 4% from preventable acute
conditions. 2
Nearly one-fifth of Medicare beneficiaries in traditional fee-
for-service (FFS) are re-admitted to a hospital within
20 days of their original discharge. 3
It is increasingly clear that a tremendous opportunity exists
for innovative solutions that strengthen the seams between
healthcare settings and promote a more holistic, integrated
care system. Delivery models and supporting technologies that
can help patients navigate our rapidly transforming healthcare
system and eliminate waste in a $63.5 4 billion post-acute
care marketplace are not only integral to the sustainability of
the U.S. healthcare system, but will also garner significant
interest from both the strategic acquirer and financial sponsor
communities.
This report will analyze the market dynamics and trends that
are driving demand for improved post-acute care coordination.
It will also explore forward-thinking companies that are
developing post-acute care delivery strategies to break the
cycle of unnecessary patient admissions and re-admissions.
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INDUSTRY PERSPECTIVE Q4 / 2012 5
MAJOR TRENDS AND MARKET FORCES
There is no need to read the 2,200 pages of the healthcare reform
legislation to conclude that one of the primary aims of PPACA is
to manage the chronically ill, high cost patients responsible for a
vast majority of healthcare spending in the United States. Today’s
specialist-based, hospital-centric delivery system requires little
accountability for cost and quality and provides limited incentives
for care coordination services. Without holistic, integrated care
coordination models, patients repeatedly bounce between multiple
sites of care (hospital, emergency room, home, etc.) leaving them with
hefty medical bills and suboptimal care plans designed to promote a
full recovery.
The post-acute care market, as shown in Figure 1 (next page),
represents a significant share of the care continuum and is an
area of particular focus within the reform legislation. The care
delivered following a patient’s discharge from the hospital, is highly
fragmented and uncoordinated and typically crosses multiple sites,
including skilled nursing, rehabilitation, home health and hospice.
Fragmentation and poor communication are causing over $26 billion
in unnecessary hospital admissions – a top priority for policy makers,
payers and providers.
MAJOR TRENDS AND MARKET FORCES //
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A Perfect Storm is Looming Historically, post-acute care has been primarily viewed as an “add-
on” to our nation’s healthcare system. However, healthcare cost
and outcomes data have reversed this trend as a growing number
of patients are requiring continued and coordinated care to achieve
a full recovery. This is especially true as an explosion of high-risk
individuals with multiple chronic illnesses is poised to occur in our
disjointed healthcare system in 2014. According to CMS, PPACA
will expand access to coverage to over 30 million Americans across
the Medicaid and individual markets. While the volume of entrants is
certainly notable, the risk profile (i.e. utilization rate, lack of adherence,
health status, etc.) and the impact that these newly insured individuals
will have on our healthcare system cannot be overstated. A perfect
storm is looming, creating a pressing demand for new services that
promote coordinated, cost effective and high quality care.
Medicaid: Insurance coverage expansion is the centerpiece of the
healthcare reform law. What is less commonly known is the fact
that over 75 percent of the 30 million Americans expected to gain
insurance in 2014 will be covered under state-administered Medicaid
programs. According to CMS, PPACA will result in 23 million new
Medicaid enrollees in 2014 as the new healthcare reform law expands
coverage to all adults under age 65 with incomes below 133% of the
Federal Poverty Level. This expansion is problematic in many ways.
Compared to the low-income privately-insured population, Medicaid
beneficiaries are more likely to be in fair or poor health. As illustrated
in Figure 3, 33 percent of non-disabled, childless adults are in fair
or poor health compared to 12 percent of those individuals covered
by private insurance. Similarly, roughly 44 percent of non-disabled
Medicaid enrollees have two or more chronic conditions compared
to 28 percent of the privately insured. These comparisons highlight
many of the common behavior patterns we see across the Medicaid
population:
Figure 1: Fragmented Post-Acute Care Delivery System (Representative Constituents)
HospitalSkilled Nursing /
RehabilitationHome Health Hospice
INDUSTRY PERSPECTIVE Q4 / 2012 7
Figure 2: A Perfect Storm is Looming
Limited to no engagement with a primary care physician
High utilization of certain services, such as pharmacy, inpatient
hospital and emergency room services. Medicaid enrollees
access care through the emergency room at twice the rate of the
uninsured and privately covered populations[5]
Poor adherence to treatment plans
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MAJOR TRENDS AND MARKET FORCES //
. . . An explosion of high-risk individuals with multiple chronic illnesses is posed to occur in our disjointed healthcare system in 2014.
HospitalSkilled Nursing /
RehabilitationHome Health Hospice
TRIPLE-TREE.COM8
Figure 3: Health Status of the Privately Insured Versus the Medicaid Population
The Congressional Budget Office (CBO) estimates that PPACA’s
Medicaid expansion will cost the federal government $434 billion
over the next decade, accounting for more than 40 percent of the
healthcare law’s total expenditures. In addition to increasing the
federal deficit, the expansion will have a significant impact of
state budgets, healthcare provider budgets, and patients’ ability to
access care.
Individual: As a result of the individual mandate, CMS estimates
that an additional 10 million individuals will receive coverage either
through insurance exchanges or directly from a private insurer.
Many of the provisions in the healthcare reform law, however, will
drive increased adverse selection, thereby creating a risk pool
that cannot be overlooked. The following are a few of the most
impactful provisions:
INDUSTRY PERSPECTIVE Q4 / 2012 9MAJOR TRENDS AND MARKET FORCES //
Community Rating. Prevents insurers from varying premiums
on the basis of a policyholder’s age, gender, or health status.
This provision will increase the cost of health insurance for the
healthy individual and reduce the costs for sicker individual.
Guaranteed Issue. Forces insurers to cover everyone with
pre-exiting conditions and therefore drives up premiums. If
an individual can buy insurance after getting sick, that person
has every incentive to drop out of the system until he or she is
actually ill.
Mandatory Benefits. Forces plans to cover certain services (e.g.
maternity care and substance abuse treatment). In other words,
it is a a good deal for a pregnant female or a couple planning to
have a child. Otherwise it’s another reason to drop coverage.
Tax Penalties. The magnitude of the penalty (roughly $100) for
not purchasing insurance will not compel healthy individuals to
purchase insurance.
Clearly, the incentives to purchase insurance are in favor of the high-
risk individuals.
Medicare: In 2011, the first wave of baby boomers turned 65; by
2030, it is projected that there will be 72 million elderly Americans
aging into Medicare – more than double the number from 2000. This
startling demographic change has tremendous implications for our
society, ranging from the availability and utilization of our healthcare
resources and economic costs to the fundamental principals that
shape our lives. As we develop new strategies for care in the post-
acute care market, it makes sense to focus first on the segment
of the population that accounts for the vast majority of overall
healthcare spending. It is well known that chronic conditions drive a
wildly disproportionate share of costs across all demographics, with
more than 84 percent of our total healthcare dollars consumed by
persons with one or more chronic diseases. This becomes even more
pronounced in the Medicare population, with more than 99 percent
of all Medicare expenditures associated with members who have
one or more chronic conditions. As a result, any successful effort to
moderate the cost of healthcare is highly dependent on effectively
managing chronic and/or multiple conditions in this segment of the
population.
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TRIPLE-TREE.COM10
Dual EligiblesWhile the explosion in Medicaid and Medicare eligibles will have
a meaningful effect on the healthcare system, no segment of the
population captures this phenomenon better than the dual eligible
population. It is so important that our team at TripleTree is in the
midst of concluding a research report on dual eligibles.
Approximately nine million individuals are currently covered by
both the Medicaid and Medicare programs. These individuals are
commonly referred to in the health policy arena as dual eligibles
or “duals”. While this population represents just 15% of the total
Medicaid population, duals account for over 39% of total Medicaid
spending. Similarly, they represent 21% of Medicare enrollees, but
36% for total Medicare expenditures. With state budgets under
increasing pressure from the economic downturn and continued
sputtering of the U.S. economy, politicians and policy makers are
intensifying their focus on developing solutions to address the
growing spend burden of this demographic. Specifically, states are
looking to control costs by moving their dual eligible populations to
managed care contracts, shifting the responsibility to health plans
and exploring managed care approaches via care coordination
models. As a result, Medicaid and multi-line insurance carriers are
jockeying for a position to win contracts that in aggregate represents
more than a $300 billion market opportunity.
Duals are among the sickest and poorest individuals covered under
Medicaid or Medicare and therefore account for a disproportionate
percentage of healthcare costs. As illustrated in Figure 4, average
per capita Medicare spending for dual-eligible beneficiaries is more
than twice that of non-dual-eligible beneficiaries, which is reflective
of this population’s greater health needs and utilization of services
compared to other Medicare and Medicaid beneficiaries.
These expenditures have predominantly occurred in the traditional
fee-for-service (FFS) coverage setting, where many individuals
receive excellent care, but where there is no means of (or
accountability for) ensuring that duals’ considerable health needs are
being addressed in a high quality and cost-effective manner. Today,
coordinated care programs currently serve a modest proportion of the
nation’s dual eligibles with just one million duals receiving Medicaid
benefits through a managed care program in 2009. However, both
states and managed care organizations are clearly signaling that dual
eligibles are top priority, and therefore we should expect to see these
constituents make aggressive moves to serve this population. Thirty-
seven states and the District of Columbia have submitted letters of
interest to CMS to coordinate care for dual eligibles, and the Center for
Medicare and Medicaid has chosen 15 states to design new approaches
to coordinate care for this population.
INDUSTRY PERSPECTIVE Q4 / 2012 11
Figure 4: The Cost of the Dual Eligible PopulationDifferences in spending and service use rate between dual-eligible beneficiaries and non-dual eligibles
Average Medicare Payments for all Beneficiaries Total Dual Hospitalizations
Service Benificiaries Variance
Dual-Eligible Non-Dual-Eligible
Inpatient Hospital 5,369$ 2,751$ 2,618$
Physician 2,884 2,294 590
Outpatient Hospital 1,647 886 761
Home Health 752 379 373
Skilled Nursing Facility 1,160 484 676
Hospice 403 153 250
Prescirbed Medication 4,262 852 3410
Total Medicare Payments 16,477$ 7,799$ 8,678$
Source: MedPAC, CMS - need to confirm 60% / 40% split
Poten&ally Avoidable Admissions
40% Non-‐
Avoidable Admissions
60%
AVERAGE MEDICARE PAYMENTS FOR ALL BENEFICIARIESDifferences in spending and service use rate between dual-eligible beneficiaries and non-dual eligibles
Average Medicare Payments for all Beneficiaries Total Dual Hospitalizations
Service Benificiaries Variance
Dual-Eligible Non-Dual-Eligible
Inpatient Hospital 5,369$ 2,751$ 2,618$
Physician 2,884 2,294 590
Outpatient Hospital 1,647 886 761
Home Health 752 379 373
Skilled Nursing Facility 1,160 484 676
Hospice 403 153 250
Prescirbed Medication 4,262 852 3410
Total Medicare Payments 16,477$ 7,799$ 8,678$
Source: MedPAC, CMS - need to confirm 60% / 40% split
Poten&ally Avoidable Admissions
40% Non-‐
Avoidable Admissions
60%
Managed care organizations are also making bold strides to position
themselves as constituents in the dual eligible market. UnitedHealth’s
acquisition of XLHealth is an example of how managed care
organizations are looking to leverage their footprint in the Medicare
market to capture more shares of the Managed Medicaid / Dual
Eligible market.
MAJOR TRENDS AND MARKET FORCES //
Total Dual Hospitalizations
($ in actuals)
source: medpac, cms
TRIPLE-TREE.COM12
United’s Purchase of XL HealthIn February 2012, UnitedHealth Group purchased XL Health, a Baltimore-based Medicare Advantage plan that focuses primarily on Special
Needs Plans (SNPs), including members with chronic illnesses and dual-eligibles. XL Health serves over 113,000 Medicare Advantage
members and is one of a few Medicare Advantage plans that successfully serves the chronic disease population. The XL Health
acquisition solidifies United Healthcare’s (UHC) lead in managing the dual-eligible population, the largest reserve of untapped revenue for
the managed care industry, and an end-market where managed care can prove a superior ability to improve lives, lower medical expenses
and earn a profit by coordinating the care and payment of care for frail elderly, disabled and other duals.
Figure 5: Intensified Focus on the Dual Eligible Opportunity
buyer targetUnitedHealth Group XL Health
Inspiris
Humana Senior Brige
MetCare
Cigna HealthSpring
WellPoint CareMore
TA Associates Senior Whole Health
Oak Investment Partners Independent Living Systems
Univita All-Med Services
INDUSTRY PERSPECTIVE Q4 / 2012 13
Understanding ReadmissionsEach year, nearly nine million people – 24,000 per day – are discharged from short-
term acute care hospitals and require some form of post-acute care. The most
common settings include but are not limited to sub-acute and post-acute nursing
facilities, the patient’s home, primary and specialty care offices, rehabilitation
facilities, home health, hospice, long-term care facilities and other institutional,
ambulatory and ancillary care providers. Patients receiving post-acute care
typically see multiple physicians in as many settings, often creating a confusing
and a hard-to-follow regimen of medications and treatments. For the patient,
their caregivers and family members, it is not surprising that communication
problems and other errors proliferate as patients transition between settings.
Adverse events often occur during care transitions and are concentrated
among individuals with complex and chronic conditions. Accordingly, a failure
to communicate critical information related to a patient’s medical care, support
services, safety, medications, and other matters can compound the situation.
These adverse events result in a substantial number of unnecessary hospital
admissions. According to Medpac, among Medicare patients:
• 20 percent are rehospitalized within 30 days, and more than one-third are
rehospitalized in 90 days.
• More than 76 percent of these rehospitalizations are said to be avoidable
and cost our healthcare system more than $26 billion per year.
Communication. An inadequate relay
of information by hospital discharge
planners to patients, caregivers, and post-
acute care providers, to ensure the patient
understands to the treatment plan
Compliance. Poor patient compliance
with care instructions, medication
therapy, etc. primarily as a result of the
patient receiving little or no information
on how to achieve a successful recovery
Follow-up. Inadequate follow-up care
from post-acute and long-term care
providers or failure by the patient to
schedule a follow-up appointment with
their physician
Support. Family members or caregivers
are often uninformed or unable to provide
the necessary care and support for
transitioning the patient from the hospital
to the home
primary causes of readmissions
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MAJOR TRENDS AND MARKET FORCES //
TRIPLE-TREE.COM14
Figure 6: Care Trends Post Discharge
The causes of unnecessary hospital admissions are complex, multi-
faceted and interrelated. The most common variables include severity
of illness, communication with patients and families, medication
errors and compliance, and coordination with community clinicians,
caregivers and family members. Each of these factors can play a
role, but the relative importance is difficult to measure and therefore
poorly understood. What is clearer, however, is that despite the fact
that the problems of high readmissions rates and poor coordination
have been known for many years, little to no improvement has been
made in our healthcare system in our very recent history.
INDUSTRY PERSPECTIVE Q4 / 2012 15
Figure 7: Change in 30-Day Readmission Rates Following Discharge
As illustrated in the Figure 7, the rate of readmissions increased from 2004 to 2009
for five of the six causes of hospitalizations studied. Only readmission rates for acute
myocardial infractions (heart attack) improved only slightly, decreasing from 19.4% to
18.5% - a positive development, but not enough for a healthcare system that needs to
do more. So what does this tell us?
In a new world of ACOs, bundled payments, value based purchasing, STAR ratings
and consumerism, the opportunities for new service models and technology providers
to improve the cost and quality of care in the post-acute care market through more
holistic and integrated care delivery models is tremendous.
MAJOR TRENDS AND MARKET FORCES //
Created by Select Medical and
Universal American and backed
by Welsh Carson, NaviHealth
partners with health plans, health
systems and post-acute providers
to manage the entire continuum
of post-acute care. In February
2012, NaviHealth purchased
SeniorMetrix, which utilizes a
decision-support technology to
project therapy regimens, most
appropriate care settings and
timing of expected outcomes.
company profileCondition % Readmissions % Change
2004 2009
Medical 15.9% 16.1% 1.2%
CHF 20.9% 21.2% 1.4%
AMI 19.4% 18.5% -4.6%
Pneumonia 15.1% 15.3% 1.7%
Hip Fracture 14.3% 14.5% 1.4%
Surgical 12.7% 12.7% 0.0%
Source: The Dartmouth Institute for Health Policy & Clinical Practice
TRIPLE-TREE.COM16
Figure 8: A Call to Action for Payers, Hospitals / Health Systems, and Consumers
A CALL TO ACTION The post-acute care market is estimated to be a $63.5 billion market[6]. Aside from its sheer size, there are a number of factors that are
contributing to the increased attention the post-acute care market is receiving. Figure 8 provides a brief overview of the key factors driving a
focus on the post-acute care market for payers, providers and consumers.
INDUSTRY PERSPECTIVE Q4 / 2012 17
PayersSeveral of the factors listed in Figure 8 are impacting the ways in which health
plans view post-acute care. HEDIS measures, Star Ratings and ACOs have payers
increasingly accountable for their performance across several important dimensions
of care and service. With more plan members (many of whom are among the
sickest) accessing the post-acute care market for the range of reasons mentioned
heretofore, improving the post-discharge coordination of care, patient experience
and outcomes is a priority. Payers, both public and private, are aggressively seeking
lower cost alternatives to hospital admissions / readmissions and improved care
coordination across the continuum of care to eliminate waste.
ProvidersIn a post reform world of value-based purchasing and bundled payments, providers
are held more accountable, primarily through financial penalties, for the care
they provide. In October 2012, Medicare started penalizing hospitals with high
readmissions rates – defined as patients being readmitted within one month of
discharge – by reducing reimbursement by as much as one percent. The maximum
penalty increases to two percent the following year and three percent in 2014.
These penalties are one of the Affordable Care Act’s efforts to reward hospitals for
the quality of care they deliver instead of the quantity of services. With hospitals
facing penalties, theoretically they will take ownership of following-up with
discharged patients. According to the Kaiser Family Foundation, Medicare evaluated
readmissions rates at 3,367 of the nation’s hospitals and imposed penalties on 2,200
in October 2012 with 278 hospitals receiving the maximum penalty of one percent.[7]
A CALL TO ACTION //
Recapitalized by Summit Partners in
September 2011, Carecentrix, Inc.
is a provider of home health benefits
management services that recently
launched a Care Transitions program
designed to reduce avoidable hospital
admissions and other adverse medical
events. Carecentrix’s HomeSTAR
(“Successful Transition and Recovery”)
program was designed to help
health plans and providers decrease
avoidable hospital readmissions and
other adverse medical events while
improving patient satisfaction in
their care. Through this program,
Carecentrix identifies members at risk
for an adverse event, stratifies the
risk, and mitigates the risk by enrolling
them into structured care plans
delivered face-to-face in the home.
company profile
TRIPLE-TREE.COM18
While the reimbursement risk associated with this program may seem insignificant,
many providers operate under single digit margins, making even a 1% reduction in
Medicare reimbursement meaningful. For example, if a hospital’s total inpatient
operating payments for FY 2012 were $25 million, that hospital will have $250,000
at risk for reimbursement reduction in this program. With the maximum penalty
increasing 1% per year until FY 2015, the penalty and dollars at risk will undoubtedly
heighten providers’ focus on their readmission rates.
ConsumersWith consumers increasingly on the hook for the cost of care, individuals are no
longer standing on the sidelines and are instead demanding more transparency,
information and a greater role in managing their own health. With that comes an
ever-increasing financial and administrative challenge, and as our healthcare system
is inundated with an aging population and new Medicaid members, demands from
the post-acute care market will include tools to help them navigate their journey
post discharge.
Hospitals, health systems, managed care organizations, and post-acute providers
are all keenly aware of and engaged in discovering innovative delivery and payment
models, technologies and services to transform the post-acute care market. Success
however, will require trust, collaboration, cooperation and aligned incentives
between providers, payers, consumers and policy makers.
Established consumer engagement
platforms are increasingly
exploring additional capabilities
to address market demand for
payer / provider / consumer
collaboration as healthcare
reform drives convergence.
MEDSEEK is a provider of
online strategic engagement
and analytics solutions. The
company’s software platform helps
healthcare organizations attract
and retain patients and improves
patient experience and care
through enhanced patient-doctor
communication and information
accessibility.
company profile
INDUSTRY PERSPECTIVE Q4 / 2012 19
POST-ACUTE CARE
Solutions To Organize Care, Engage Consumers / Patients / Members,
And Reduce Unnecessary Inpatient Utilization
A number of solutions are solely
focused on care coordination services
and technologies, but a comprehensive
review of the market place should
include various providers across the
post-acute care continuum. While skilled
nursing, rehabilitation and home health
providers may not have dedicated
programs to improve care coordination
per se, they do play a very important
role in the post discharge care
experience for patients. The integrated
care delivery / care coordination
providers and supporting technology
providers identified in Figure 9
support the post-acute care providers
and patient as they transition from
setting to setting.
Figure 9: The Post-Acute Care Market Landscape
POST-ACUTE CARE //
TRIPLE-TREE.COM20
Skilled Nursing / RehabilitationThe $200 billion skilled nursing and rehabilitation market is in
the midst of a transformation, and in a new world of ACOs and
readmission penalties, these providers will play a significant role in
helping hospitals reduce readmissions and providing patients with
coordinated and professional care in a sub-acute environment.
In March 2012, the Medicare-Medicaid Coordination Office and the
Center for Medicare and Medicaid Innovation announced the Initiative
to Reduce Avoidable Hospitalization among Nursing Facility Residents.
Through this initiative, CMS is partnering with seven organizations
to implement strategies to reduce avoidable hospitalization for dual
eligibles who are typically long-stay residents at nursing facilities.
Each participant in the initiative is required to partner with a
minimum of 15 dual eligible certified nursing facilities in the same
state where the intervention will be implemented. The goal of the
initiative is to:
• Reduce the number of and frequency of avoidable hospital
admissions and readmissions;
• Improve beneficiary health outcomes;
• Provide better transition of care for beneficiaries between
inpatient hospital and nursing facilities; and
• Promote better care at lower costs while preserving access to
beneficiary care and providers
CMS’ initiative in addition to the Hospital Readmissions Reduction
Program is forcing skilled nursing care facilities to reevaluate their
current delivery models. As hospitals face Medicare reimbursement
reductions for unnecessary readmissions, they will seek to partner
with facilities that actively play a role in reducing those readmissions.
There are many programs currently being developed to focus on
this issue, but one that seems to have gained acceptance in the
marketplace is the INTERACT II (Interventions to Reduce Acute
Care Transfers Version II) program, designed to improve the early
identification, assessment, documentation, and communication about
changes in the status of residents in skilled nursing facilities. This
program includes specific tools around communication, advanced
care planning, quality improvement, and care paths that were refined
and tested in a six-month collaborative improvement project with 25
nursing homes in three states.
In addition to implementing INTERACT II, Life Care Centers of America
(LCCA), one of the nation’s largest skilled nursing providers, is
making some waves in the industry through its success in reducing
rehospitalizations. Beginning in 2010, LLCA began placing a full-time
doctor in some of its facilities. While this move does not seem to be
an earth shattering idea, the impact was certainly noteworthy - in just
one year, LCCA reduced re-hospitalization at its facilities with a full-
time physician to 15% from 40%. In addition to a dramatically reduced
INDUSTRY PERSPECTIVE Q4 / 2012 21POST-ACUTE CARE //
readmissions rate among those participating facilities, LLCA also
experienced reduce staff turnover and improved clinical outcomes.
Genesis Healthcare is another example of a skilled nursing provider
leading the initiative to reduce hospital readmissions. Genesis, a
leading provider of short-term post-acute, rehabilitation and skilled
nursing care services, launched a new discharge product called
PowerBack Rehabilitation aimed to reduce post-discharge setbacks
and transition patients back to their homes as quickly as medically
possible, rather than a nursing home that lumps all patients together,
regardless of specific needs or acuity level.
Genesis’s Brightwood campus is the first of its kind to offer the
innovated model of care (PowerBack) which features:
Expanded clinical capabilities to include cardiac,
orthopedic and pulmonary specialized care;
Two full-time physicians and three full-time nurse
practitioners on campus;
State-of-the art therapy technologies;
Therapy pool;
A 4,000 square foot therapy gym open 12 hours a day;
Added care planning and daily schedules to be directed
by the patient;
Enhanced Guest Services team and training to ensure an
outstanding experience;
Expanded dining services in multiple locations, including cafes,
dining rooms and room service.
Although reducing rehospitalizations may negatively impact skilled
nursing facilities revenue in the short-term (e.g. fewer Part A SNF
days), long-term care providers are increasingly pursuing this
goal anyway, believing that higher quality care will enhance
referrals in the long-run. LLCA is certainly experiencing
increased referrals as a result of its recent successes and we
anticipate other innovators like Genesis and Extendicare to see
referral gains in the near future as well.
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TRIPLE-TREE.COM22
Home HealthIn recent years, the home health industry has been battered by a
challenging reimbursement environment and increased regulatory
scrutiny into the Medicare reimbursement practices at many of
the industry’s largest players. In the longer-term however, we
view the home health industry as an attractive market for growth
and consolidation as ACO tailwinds intensify and the appropriate
incentives are implemented to reduce overall healthcare costs.
As illustrated by the cost and length of stay statistics publish by
MedPac in Figure 10, home health represents a very compelling care
delivery option for payers, providers and most importantly, patients
post discharge. The key question is how home health providers in
the older world of fee-for-service payment models and generally
limited collaboration with hospitals are now redefining their value
proposition and developing new models of care to meet cost and
quality requirements under healthcare reform.
Figure 10: Home Health Versus Other Post-Acute Care Options
Hospital LTAC IRF SNF Hospice Home Health
Avg. Cost of Stay $10,043 $38,582 $17,582 $10,833 $11,217 $5,706
Avg. Length of Stay 5 days 27 days 13 days 27 days 86 days 120 days
Avg. per Diem Cost $1,853 $1,450 $1,304 $400 $130 $48
Source: US Census Bureau and MedPac March 2012 Report
INDUSTRY PERSPECTIVE Q4 / 2012 23
Amedisys, one of the largest publicly-traded home health and hospice
providers, is one company taking a leading position in demonstrating
the value proposition that home healthcare providers can provide in
a new world of accountability. Designed to deliver care to the most
complex, chronic and costly patients in the comfort of their homes,
Amedisys’s Comprehensive Continuous Chronic Care Management in
the Home or C4M, combines existing home care infrastructure with
technology and clinical capabilities to provide intensive continuous
home-based health care.
Figure 11: Amedisys C4M
POST-ACUTE CARE //
External Benchmarks
< 30 days: 4.7% - 6.2%
31-60 days: 8.1% - 10.7%
61-90 days: 6.5% - 12.8%
91+ days: 8.2% - 14.1%
1. Department of Health and Human Services-Offices of Inspector General 2000, 2002, 2004, 2005
2. 2002 NHS Trust Plan and Report
3. 2004 Institute for Healthcare Improvement
4. Healthcare Cost Containment Council 2005
Amedisys Benchmarks
< 30 days: 1.48% - 1.60%
31-60 days: 1.17% - 1.76%
61-90 days: 0.62% - 1.32%
91+ days: 0.70% - 0.90%
1. Post episodic DM call center results
2. 14,313 patients tracked over a 6 month period
READMISSION RATES
TRIPLE-TREE.COM24
As the value that home health can provide to our healthcare system
is demonstrated by innovators like Amedisys, TripleTree anticipates
significant private equity investment and consolidation in the years
to come. Growth, via acquisition, is very common in the home health
industry as the market remains highly fragmented with over 11,500
home health agencies in the U.S. The four largest, publicly-traded
players (Amedisys, LHC Group, Almost Family, and Gentiva) account
for 15% of the market. After several years of robust M&A volume,
2011 experienced a meaningful dip as a result of reimbursement cuts,
increased audits and investigations and talks of sequestration.
In addition to the traditional strategic buyers in the space (i.e. the
large publicly-traded home health and hospice organizations),
the compelling fundamentals of the home health industry are
also attracting some out-of-the box buyers as exhibited by The
Washington Post Company (NYSE: WPO), a diversified education and
media company, purchasing a majority stake in Celtic Healthcare,
a provider of skilled home health-care and hospice services the
northeastern and mid-Atlantic regions.
DME / HME / InfusionThe $27 billion durable medical equipment (DME) industry is at an
important inflection point. While margins are being squeezed as a
result of CMS’s Competitive Bidding Program, DME companies are
also being confronted with new opportunities to play a greater role
in the post-acute care continuum. DME companies already have
an established position in the home, which ideally positions them
to expand their services and create a more holistic home health
approach. Some industry players have attempted this in the past
with little avail, as the incentives for hospitals and other providers
to leverage these expanded services were limited. Today, penalties
for readmissions and other incentives are changing the game for the
DME industry. This influence of penalties and incentives has DME
vendors relying on partner organizations for automated solutions.
Once such firm is Brightree, who offers a cloud based billing and
business management platform for a range of provider settings.
Univita Health provides a clear example of how a once traditional
DME provider is transforming itself to become a comprehensive care
delivery and coordination provider in the home. Over the last three
years, Univita Health has purchased segments of the home health
care industry and combined them to deliver holistic services in a
new, coordinated way to become a one-stop shop for managed care
and employers to manage their chronically ill and elderly patients.
INDUSTRY PERSPECTIVE Q4 / 2012 25
• March 2012: Acquired All-Med Services of Florida, a DME/HME
home and hospital delivery company.
• January 2010: Acquired Atenda Healthcare Solutions and its
affiliated companies, including Florida Home Medical Equipment.
• December 2009: Acquired Enurgi, a web-based service for
caregiving and family support.
By integrating these disparate services into its existing operations
and creating a broader suite of services, Univita Health is creating
significant value for its managed care and employer customers.
Univita Health has inked deals with large managed care companies
to manage their chronically ill members in the home on a capitated
basis. By offering an integrated, single source solution for home
care, Univita is transforming how care is delivered in the home while
driving accountability and outcomes and reducing readmissions
healthcare costs.
HospiceThe hospice market has seen consistently strong growth over the
last several years. Since 2004, the hospice market has grown 12%
per annum as a result of favorable demographic trends, strong political
support, favorable reimbursement trends and increased realization of
the value proposition hospice services provide. Despite an acceleration
of M&A volume over the last four years, the hospice market remains
incredibly fragmented with the top players (Chemed (Vitas), Gentiva,
Amedisys, and LHC Group) owning just 15% of the market[8]. The
remainder of the market is dominated by both non-profit and private
non-profit single state and regional players. M&A has been a common
growth avenue for the industry’s largest players and TripleTree expects
this activity to continue as hospice continues to play a greater role
in integrated care delivery and coordination. Both home health and
hospice have been targeted areas for aggressive expansion for Kindred
Healthcare, which purchased IntegraCare Holdings, Inc., a provider
of home health, hospice and community services, from private equity
firm, Flexpoint Ford, for $75 million in total consideration. In order
to support a continuum of care within an ACO or bundled payment
environment, Kindred is seeking opportunities to provide integrated
and coordinated care throughout a post-acute episode. As illustrated
by Kindred’s acquisition of IntegraCare, home health and hospice are
a key component of the company’s strategy to provide high quality,
patient-centered integrated care.
POST-ACUTE CARE //
TRIPLE-TREE.COM26
It is no secret that the ACO movement will have a profound impact on
provider approaches towards care coordination, provider-to-provider
collaboration, and patient engagement. An important component
in the formation and success of ACOs will be the introduction of
value-based reimbursement where providers will be placed at “risk”,
making them responsible for overspending and rewarding them
across certain quality measures. In this new payment environment,
it will be imperative for ACOs to create an integrated system of care
coordination among providers and partners that includes initiatives to
aggressively monitor member patient health and drive care outside of
inpatient settings. In doing so, the primary focus will be:
Avoiding high-cost care episodes resulting from poor risk
identification and member health monitoring.
Delivering routine care and preventive services in low-cost,
efficient settings.
While post-acute providers are unlikely to serve as an organizing
partner of an ACO, they provide a tremendous value-add to ACOs
by enabling chronic care management, extending care coordination
efforts, and facilitating the provision of care in lower-cost settings
(through home health or hospice services).
The most likely ACO / post-acute provider strategies that will emerge
in the evolving ACO environment will resemble the following:
ACO / Provider Partnership to Provide Services to Entire
Population – similar to an exclusive or preferred partnership in
which an ACO contracts with a provider (or multiple providers) to
provide post-acute services to the entire member base.
ACO / Provider Partnership to Address Specific Concerns or
Cost Drivers – An ACO contracts with provider to provide specific
post-acute services to address key concerns and / or cost drivers
(i.e., readmissions, drug adherence, and emergency department
utilization).
ACO / Provider Partnership to Treat Specific Members – An ACO
contracts with a provider to provide targeted post-acute services to
a specific subset of members. For example, an ACO many contract
with a home health provider to provide standard care / monitoring
services to members with diabetes.
The playbook for ACOs is relatively the same regardless of the partnership
arrangement; all scenarios involve a heavy emphasis on providing the
necessary preventive and follow-up care in lower cost settings in order to
control costs as well as to minimize the impact high-cost care episodes.
Post-Acute Providers (e.g. Hospice): A Foundational Element of Accountable Care
•
•
•
•
•
INDUSTRY PERSPECTIVE Q4 / 2012 27
A recent example of how these emerging ACO / post-acute provider
relationships might unfold is through CMS’ Pioneer ACO Program,
an initiative designed to test the impact of different payment
arrangements on organizations operating as ACOs or similar
arrangements in controlling Medicare spending. Michigan Pioneer
ACO (Michigan ACO) is a partnership between the Detroit Medical
Center (DMC) and its physicians and was selected to introduce
a specialized case manager pilot program identifying terminally
ill patients that require customized care at home. To operate the
program, the Michigan ACO signed a three-year contract with
Hospice of Michigan, where through its HOMe subsidiary, terminally
ill patients are provided with comprehensive home medical services.
The goal of this pilot program is to reduce unnecessary costs
associated with end-stage illness (HOMe also has contracts with
several other leading Michigan payers, including Blue Care Network,
Priority Health and United Healthcare, to provide similar services).
The Michigan ACO example highlights the growing payer / ACO
acceptance of the vital role that post-acute providers play in
controlling healthcare costs (as well as their willingness to form
partnerships in order to distribute these services effectively). In
the case of the Michigan ACO, where efforts were directed towards
controlling end-of-life spending through hospice care, the program is
especially significant given that studies have shown that end-of life-
services account for 10 percent of the nation’s $2.6 trillion healthcare
budget. Furthermore, for those aged 65 and older, the last 12 months
of life account for 27 percent of total costs. Given the potential
spending burden that these types of conditions create and the
resultant pressures that would be placed on an ACO, it is no secret
that the post-acute space will be a critical focus area for ACOs and
similar risk-bearing entities.
As the ACO movement continues to take shape and build momentum
over the next few years, it is likely that subsequent ACO / post-acute
provider partnerships will emerge as these providers address a
critical (and costly) part of the care continuum.
POST-ACUTE CARE //
TRIPLE-TREE.COM28
Figure 12: Case Study Snapshot – Michigan Pioneer ACO
Michigan Pioneer ACODetroit Medical Center
Hospice of Michigan
INDUSTRY PERSPECTIVE Q4 / 2012 29
Treatment in Place – The Most Impactful Model of Care for Reducing Unnecessary Admissions Both Evercare, a business unit within UnitedHealth Group’s Optum
platform, and Bluestone Physicians Services are examples of
innovative care delivery models that are having a significant impact
on reducing cost and significantly improving the quality of care for
our systems most frail and expensive patients. The construct of these
models are similar and therefore accomplish a common goal – deliver
holistic and integrated care to the patient in their home to improve
clinical quality and reduce unnecessary utilization, resulting in fewer
ER visits, acute admits and re-admits.
Evercare Evercare deploys a patient-centered approach to providing primary
care to the systems sickest and most costly members. Through
partnerships among individual patients, their healthcare providers,
and the patient’s family, Evercare cares for seniors, individuals with
long-term or advanced illness, and members with complex needs.
Evercare’s roots can be traced to the nursing facility environment
where the nurse practitioner (NP) is the central component of this
model and provides routine and more intensive primary care while
working in collaboration with nursing home staff and primary care
physicians. The primary objectives of the model are (i) to establish
and adhere to a plan of care for each individual patient, (ii) monthly
NP visits with daily monitoring by the NP and SNF staff, (iii)
escalation to the NP upon identification of a change in condition
with the patient, and (iv) implementation of a care plan that avoids
the unnecessary hospital admission by treating the patient in their
home. The value proposition that this model (and Bluestone Physician
Services’) delivers to each constituent is tremendous:
Members. Better health outcomes and reduced hospital admissions;
more benefits and services than FFS Medicare, including
coordinated care focused on individual needs of the enrollee;
Facilities. Increased revenue through more skilled nursing days
in the facility, rather than admitting the member to the hospital;
members receive better care; improved clinical and health
outcomes; increased member and family satisfaction;
Providers. Comparable reimbursement as Medicare; improved
clinical outcomes and additional support for patient through the NP;
CMS / States. Lower costs of care.
For more than 20 years, Evercare has achieved strong results,
including improved medication adherence and utilization
management, decreased hospital admissions by 50%, and industry
leading member and family satisfaction ratings.
•
•
•
•
POST-ACUTE CARE //
TRIPLE-TREE.COM30
Bluestone Physician Services Through an interdisciplinary team of physicians, nurse practitioners
and physicians assistants, Bluestone Physician Services (Bluestone)
provides on-site primary care services to complex, frail and special
needs patients in assisted living, memory care and group home
communities. The company’s delivery model is supported by a
robust communications portal and EHR that allows the nursing staff,
homecare and hospice nurses, and family members to reach the care
team (as opposed to dialing 911) when a change in condition occurs
and deliver high quality, coordinated care. Bluestone’s care plans are
customized with the family for each patient to assure appropriate
end-of-life care, further reducing costs and improving care quality.
Each patient visit includes the review of current medical concerns
and medications, as well as preventative care, foot care, skin care,
chronic disease management and arrangement of specialty care
when needed. This type of ongoing preventative care has proven to
not only reduce the need for emergency care and trips to the hospital,
but also significantly improve overall health.
Bluestone’s care model has transformed how care is delivered to
the assisted living and group home populations in the Twin Cities
area of Minnesota. The company has contracted with several local
health plans to serve over 3,000 patients in more than 130 assisted
living communities. Today, Bluestone is sharing its model with
other geriatric care providers and developing even more enhanced
care coordination strategies to further drive change across our
healthcare system.
These two models exemplify what healthcare reform is all about – improved quality, improved outcomes and greater affordability.
INDUSTRY PERSPECTIVE Q4 / 2012 31
Supporting Technology Providers Supporting technology providers can play a pivotal role in care coordination post
discharge. When a patient leaves a hospital they and their caregivers require all, but
not limited to the following: (i) information about their treatment plan, (ii) education
about their medications and other equipment, (iii) reminders about medications
and follow-up appointments, and (iv) proper transition of patient information and
medical records between hospital physicians and ambulatory-care physicians. The
common thread amongst all of these requirements is communication and patient /
caregiver engagement.
From both a research and advisory perspective, TripleTree is well versed in the
dynamics surrounding the explosion of interest in healthcare consumerism. Shifting
retail-based models and engaging the consumer are some of the motivations behind
market consolidation and ‘net new’ approaches between and amongst providers,
payers and consumers.
While ACOs, value-based purchasing, and other incentives / penalties for increased
accountability are taking hold, so too have the strategies of consumer engagement
platforms to address the growing market demands for payer / provider collaboration
and improved care coordination.
Figure 13 highlights some of the most notable investments, product launches
and acquisitions in the consumer engagement space that illustrate the need and
opportunity for consumer engagement solutions to drive improve outcomes at a
lower cost.
Homecare Homebase is a healthcare
software company serving the
technology needs of the home health
and hospice industries. The company
offers a comprehensive integrated web-
based software solution to improve
the clinical, operational and financial
success of home health and hospice
agencies. Homecare Homebase’s
software connects nurses and workers
in the field to central offices, capturing
billing, patient and care information,
eliminating paper-based administrative
tasks and ensuring compliance with
Medicare standards. It can be used
on a variety of different platforms,
including smartphones. The web-based
software can be updated immediately
in response to new regulations without
users having to upgrade to a different
version.
company profile
POST-ACUTE CARE //
TRIPLE-TREE.COM32
Figure 13: Consumer Engagement Activity Continues to Accelerate
CO N F I D E N T I A L Property of TripleTree, LLC. Not For Distribution. 8
2011
• Eliza recapitalized by Parthenon
• Xerox partners with Medco Health Solutions on new communications system
• Varolii raises $8 million from various investors
• Aetna acquires PayFlex • Optum Health acquires
Connextions
January 2012
• RedBrick Health launches mobile platform for consumer health and wellness engagement
• change:healthcare announces $10 million equity raise
February 2012
• Through Q2 2012, HCSC has invested $100 million in re-platforming MEDecision with enhanced patient engagement solutions
March 2012
• Precision Health Media raises venture funding and expands leadership team
May 2012
• Castlight announces $100 million raise • SolutionReach announces growth equity
investment from Summit Partners • MEDSEEK announces buyout with Silver
Lake Sumeru and Essex Woodlands
• Healthline launches Consumer Engagement Platform
• Towers Watson acquires Extend Health for nearly 7x revenue
Q1 2012 Q2 2012 Today Q3 2012
June 2012
• Altegra Health acquires patient communications company Warm Health • Getinsured.com partners with Accenture for the implementation of a
statewide California Health Exchange • Aon Hewitt invests $40 million on internal development of exchange
platform
April 2012
• Liazon Corporation raises $18 million from various investors, including Bessemer Ventures, Bain Capital, and Beacon Bioventures
August 2012
• Change Healthcare announces new leadership after partnership and capital raise from BCBS
• Connecture raises $20 million in a recapitalization lead by Great Point Partners
INDUSTRY PERSPECTIVE Q4 / 2012 33
Multi-model consumer engagement has become a top priority across payer, provider
and PBM with the realization that the healthcare industry is amidst a transition from
a business-to-business (B2B) to a business-to-consumer (B2C) model. Technologies
and services to communicate at the right time, with the right message, through the
desired mode, have proven to drive increased actions individuals must take to obtain
the greatest benefit from the healthcare services available to them.
Amongst a myriad of evolving technology solutions, Phytel is taking a leading role in
providing innovative solutions that automate care coordination and health management
programs to improve outcomes and reduce cost in the post-acute market. Phytel has
a deep product suite of automated patient engagement, population reporting, care
coordination, discharge follow-up and patient self-management tools. In particular,
Phytel Transition provides a comprehensive toolkit that closes provider communication
loops and empowers patients and their providers to improve outcomes by: (i) identifying
high-risk patients, (ii) communicating post-discharge instructions and educating the
consumer, and (iii) gauging the patient experience.
A wide range of technologies have the potential to support post-acute care transitions.
The following table provides an overview of these technologies, their applications and
their potential outcomes.
Founded in 1999, Curaspan Health
Group, Inc. is connecting providers
hospitals, post-acute care providers,
payers and transportation companies
via secure electronic patient-transition
networks to improve outcomes as
patients transition between sites and
levels of care. With a customer base of
over 400 hospitals and 4,000 post-
acute care providers, the company’s
SaaS-based Synchronized Patient
Management Solution is catching the
eye of our nation’s largest providers
and payers by enabling these parties
to communicate and securely share
real-time, clinical information, access
patient data in any setting and use that
data to drive better clinical outcomes.
company profile
POST-ACUTE CARE //
TRIPLE-TREE.COM34
Figure 14: The Potential Impact of Supporting Technologies
Integrated Care & Care Coordination Providers – Emerging Care Delivery Models Despite the fact that the need for care coordination services has
been apparent for some time, the industry is still in its infancy
with regards to design and implementing programs that show
measureable results. One only needs to consider Medicare
spending and its unsustainable path, which will only worsen as the
baby boomers continue to age. Drastic changes are underway for
the Medicare program to ensure its long-term sustainability and
while Medicare Advantage is a part of the solution, government
policy will impact the profitability of commercial insurers. How
these insurers manage care across a variety of post-discharge
settings is a massive lever for cost management. The companies
profiled below are a few of the industry players that have developed
or currently provide solutions to support emerging care delivery
models that are poised to have a significant impact on care
coordination and costs within our healthcare system.
The trend of vertical integration and aligning physician pay to
quality became ever more apparent when Humana announced
on November 5th its agreement to purchase Metropolitan Health
Networks (MHN), a provider of coordinated and accountable to care
to over 87,500 MA, Medicaid and other customers. Over 80% of
MHN’s revenues were generated through contracts with Humana
to manage the care of its members in Florida on a capitated-
basis, whereby MHN assumes the risk for all of its patients’ cost.
TECHNOLOGY APPLICATIONS
• Patient Education
• Medication adherence & reconciliation
• Remote patient monitoring
• Personal health information
• Social support
• Remote training an supervision
EXAMPLE TECHNOLOGIES
• Automated patient communication• Medication reminders and dispenser• Medication list software• In-home diagnostic devices• Problem detection algorithms• Videoconferencing• Social networks
POTENTIAL OUTCOMES
• Reduced hospitalizations
• Increased patient satisfaction
• Reduced costs
• Improved health
• Increased quality of life
INDUSTRY PERSPECTIVE Q4 / 2012 35
Through the company’s newly formed subsidiary, Symphony Health
Partners, Inc., MHN has struck a graduating risk arrangement with
Humana to manage the provision of healthcare services to nearly
one million Humana Medicare Advantage members in Cincinnati,
Northern Kentucky, and Indianapolis service areas. After the first
two years of the contract, during which Symphony will receive a
base administrative fee, the arrangement shifts to a limited risk basis
beginning in 2014, followed by full-risk in 2015. MHN’s provider-
centric model is becoming increasingly popular, as it helps lower
costs and increase quality by giving physicians additional financial
incentives to keep patients out of the hospital. The company’s model
of care, which includes a physician network of 33 owned primary
care practices and 450 contracted independent primary care
practices, has achieved proven results (Figure 15) of high quality
care, lower costs and improve patient satisfaction and providers
across the U.S.
The purchase of MHN is Humana’s latest foray into providing medical
services, as the insurer seeks more levers to control rising costs
in Medicare. We expect further vertical integration as medical cost
management has become a critical focus for this country, given
skyrocketing healthcare costs and ballooning deficits. Regardless,
MHN’s patient-centric approach to care coordination has driven results
that should be the envy of payers and providers across the U.S.
POST-ACUTE CARE //
Figure 15: MHN’s Utilization Results
Utilization Metric
Admission / 1,000
Hospital Days / 1,000
Average Length of Stay
Acute Readmissions
Generic Dispensing Rate
Source: Metropolitan Health Network Q2 2012 Investor Presentation
Medicare Population
335
1,968
6.2
21%
60%
Metropolitan Health Networks
317
1,412
4.23
9%
84%
Results
Down 5%
Down 28%
Down 32%
Down 12 ppt
Down 24 ppt
TRIPLE-TREE.COM36
Independent Living Systems (ILS) provides an integrated suite of care management solutions focused on long term managed care, nutritional support services, complex care
management, care transition services, and a range of other member management related services. As shown in Figure 16, these synergistic
services create a patient-centered, holistic approach to long-term care that enables strong partnerships among individual patients, caregivers,
payers and the care delivery system. Today, ILS serves over 2.5 million lives on behalf of its health plan clients and is gaining significant traction
as its value proposition to the major healthcare constituents continues to proliferate.
Figure 16: ILS’ Integrated Suite of Care Management Solutions
MANAGED LONG-TERM CARE
Holistic care and support services provided in the home of Medicare, Medicaid and Duel Eligibles
“High-touch”, “low-cost” services that address daily living and innovate systems that monitor, measure and report care
Reduces financial burden for consumers, payers and providers
NUTRITIONAL SUPPORT SERVICES
Provides means and nutrition services to members to help them regain and maintain their health
Post discharge meals: meals are delivered to the patients home immediately upon discharge
Chronic Care & Disease Management Meals. Nutritional plans for those with chronic diseases,
Meals for sustained health living. Ensure members have access to health meals, particularly when they are unable to shop for or prepare themselves
COMPLEX CARE MANAGEMENT
Patient-centric communication that facilitates access to community based services and expert care coordination for the elderly, those with special needs, and dual-eligible populations and their families
Following a telephonic assessment, A group of highly trained nurses, social workers, and care coordinators work as a team to manage the care and services identified on a member’s individualized care plan
To optimize the utility of the service, ILS has developed a proprietary cloud-based care management tool that integrates member data with metrics relevant to health plans’ needs
CARE TRANSITION SERVICES
A holistic approach to transition services to provide critical support, care coordination and guidance to patients post discharge to facilitate a successful recovery at home for elderly and at-risk populations
Individualized counseling. Coach meet with patients in hospital prior to discharge, follow-up with a home visit in 72 hours and maintain contact telephonically during transition (up to 60 days)
Comprehensive home visit. Assessment of the patient’s needs and lifestyle through a home visit
Specialized technology. Identifies institutionalized members and manages cases through a web-based portal, which can be integrated into a health plan’s existing medical management and operational processes
INDUSTRY PERSPECTIVE Q4 / 2012 37
The Power of Surveillance in Population
Health ManagementManaging the care of a health plan’s installed membership base
requires superior surveillance capabilities to identify the individuals
that need the most support from the healthcare system. Establishing
a plan of action and closing each patient’s unique gaps in care,
improves outcomes, quality and patient satisfaction. On the backs of
traditional HEDIS and Medicare Advantage risk adjustment audits
and more recently the Affordable Care Act, a new category of clinical
auditing solutions are emerging that cut across cost, care and quality
management. One company that is at the forefront in changing how
individuals are cared for in the healthcare system is Outcomes Health
Information Solutions (Outcomes). Outcomes is a leading provider
of end-to-end solutions for healthcare data acquisition, auditing
and analytics for use in payment integrity, compliance and quality
reporting in the healthcare industry. More specifically, the company
provides a “preemptive” suite of services that allows Medicare
Advantage plans to measure and influence results by closing gaps in
care and quality. The company’s unique surveillance technology allows
it to organize disparate data to efficiently listen to data and create
actionable intelligence. The company extracts meaning from volumes of
diverse data to pinpoint patient care needs and address discrepancies,
facilitating the right care at the right time for each specific patient.
Additionally, the company’s senior care services identifies high-risk
patients and gaps in care via risk scores, prior admissions, number
of medications, chronic conditions and other indicators and assigns a
personal health concierge to these members to lower medical expenses
by facilitating effective care, increased patient satisfaction and improved
quality scores (HEDIS and STAR ratings).
While the health plan marketplace must continue to invest to automate
its legacy medical management competencies, the industry is most
focused on innovation and collaboration. However, legacy care
management / population health management platforms are woefully
inadequate to address today’s and tomorrow’s market needs:
Need to Look Forward, Not Backward – Systematic shift away
from retrospective care management towards real-time /
prospective population management
Need to Empower Clinicians With Actionable Data at the Point of
Care – Alert-driven workflow and analytics must be woven into
the day-to-day actions of providers
Need for Payers to “Cross the Chasm” and Become More
Provider Relevant – Payer-based technology vendors must help
obtain connectivity inside the four walls of the provider office
Need to Help Enable Providers to Take on Payer-based Activities
– Providers will be taking on more payer-driven activities and will
be as focused on quality measure as well as HCC-risk scoring for
their MA members
•
•
•
•
POST-ACUTE CARE //
TRIPLE-TREE.COM38
ZeOmegaZeOmega, a provider of web-enabled and rules-driven workflow
software for integrated care management, is taking a leading role in
fulfilling these industry needs. The company’s solutions enable the
integration of workflows across the care management continuum,
automate workflows intelligently based on client business rules and
facilitate collaboration between payers, providers and members,
thereby transforming traditional episodic-based care management
into a proactive and collaborative population management paradigm.
With an installed base across health plans, TPAs, care and disease
management organizations who collectively manage over 23 million
members, ZeOmega is placing actionable intelligence in the hands of
payers and providers to drive better outcomes, improved efficiencies
and increased collaboration among all the major constituents in the
healthcare ecosystem.
INDUSTRY PERSPECTIVE Q4 / 2012 39POST-ACUTE CARE //
LOOKING AHEAD As we await the influx of new enrollees in the healthcare system in
2014, a perfect storm is looming for which the healthcare system
could be grossly unprepared. While it is unlikely that one player in
the post-acute care market can solve the problem of unnecessary
hospital admissions, we do believe that increased collaboration
between the providers, payers and consumers can make significant
strides in eliminating this waste in the system. The incentives for
these constituents to work together are beginning take hold and
innovators across the care continuum are making investments and
developing new strategies to prepare for the explosion of high-risk
individuals into our currently disjointed healthcare system in 2014.
For a growing number of market participants, the post-acute care
market represents an outstanding opportunity for growth and value
enhancement. Entering 2013, we believe there is an increased
demand for products, services and solutions in this category,
resulting in continued strong growth, robust M&A activity and an
increased focus from the professional investment community.
TripleTree is dedicated to the Healthcare Services (Acute Care,
Alternative Site Delivery, Care Coordination and Collaboration,
Community-Based Care Delivery, DME Distribution, Home Care,
Hospice, Infusion Therapy, Managed Care, and On-site Healthcare
Delivery / Urgent Care) and looks forward to helping business
owners, investors and others interested in this important arena
within healthcare to understand and capitalize on the opportunities
that undoubtedly exist.
TRIPLE-TREE.COM40
END NOTES
Agency for Healthcare and Quality, National Healthcare Quality Report, 2011.
Agency for Healthcare Research and Quality, Potentially Preventable Hospitalizations for Acute Chronic Conditions, November 2010.
AHIP, Innovations in Reducing Preventable Hospital Admissions, Readmissions, and Emergency Room Use, June 2010.
MedPac, Health Care Spending and the Medicare Program, June 2012.
American Action Forum, Healthcare Reform and Medicaid: Patient Access, Emergency Department Use, and Financial Implications for
States and Hospitals, September 2010.
Represents Medicare spending
http://www.foxnews.com/politics/2012/08/23/more-than-2200-hospitals-face-penalties-for-high-readmissions/
June 2012 Amedisys Investor Presentation
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