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Data power in the managed care era

November 25, 2013
by Lois A. Bowers, Senior Editor
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Capturing and understanding data about their own facilities’ performance is crucial if long-term care (LTC) companies want to attract and keep business from hospitals, managed care organizations (MCOs) and accountable care organizations (ACOs) while maintaining or improving care quality, according to two presenters at the 2013 American Health Care Association/National Center for Assisted Living (AHCA/NCAL) annual meeting.

Hospitals, MCOs and ACOs are looking to transfer risk related to asset deployment, regulations, the law, and profits and losses, noted Ken Lund, chief executive officer of Shea Family in San Diego, an 80-year-old company that offers a continuum of services including independent living, home healthcare, meal delivery, transportation, assisted living, skilled care and hospice.

“In terms of an added-value proposition...we were all about demonstrating the ability of the [MCOs] and the acutes to transfer risk to us, and we were comfortable in saying that because we knew our data, we knew historically where we had come from, and we knew how to manage our data into quality outcomes and successful financial results,” Lund explained. MCOs and hospitals are very interested in the quality of care and customer satisfaction that an organization can deliver on their behalf, he added.


To obtain the needed data, Shea relies on partners for its clinical backbone and data management systems. The company then uses the data to show the hospitals and MCOs with which it does business when they are discharging patients too soon, for instance, and the financial and other ramifications of such actions. That knowledge gives the LTC organization leverage to proceed in the manner it deems appropriate, Lund said.

“When you go in with data that you know, you’re in a great position to negotiate, because I guarantee you that hospital system and that managed care system has data,” Lund said. “Some of [those] data may be accurate, some of [them] may not be accurate, but if you don’t know your own data, you’re in an incredibly strategically weak position.”

OtherLund tips from Lund: Know your routine and ancillary costs and think about which computer systems will best facilitate what you want to accomplish (Shea uses an MCO’s therapeutic interchange, for instance, so that physicians can quickly convert expensive prescriptions to less costly ones when it makes sense to do so, and one MCO likes the convenience of using Shea’s clinical backbone system so that its physicians can start their notes in it). Also consider the different ways in which services can be offered in a managed care environment (therapy, for example, can be offered in group settings, when appropriate, to make the most of a capitated rate), he said. All of these parameters, ideally, can be negotiated as part of a contract.

“These are incredibly sophisticated organizations,” Lund said. “If you’re not a large system, I’d highly recommend that you get someone who is a contracting expert in this area. They exist, and they’re going to save you a ton of time and heartache.”

Smaller operations hoping to enter and have a large presence in the managed care arena—whether through a traditional managed care system, ACO or bundled payment system—need to think of their existing partners and how they fit into what they have to offer, Lund said. “If you’re first to come to that party and you preemptively strike to the managed care company or to the acute and say, ‘Here’s our network. We’ve already affiliated. These are the outcomes that we can demonstrate,’ that’s a differentiator, and what you need to do is be able to differentiate. It’s a huge opportunity for you to create for yourself.”

Regardless of the organization’s size, however, those new to managed care will want to bring contracting, legal, technologic or whatever other expertise is needed to the relationship, Lund said. “The patients you’re going to be seeing in managed care are entirely different,” he added. “They are the sickest of the sickest, and the types of treatment you’ll be providing will require training that you probably haven’t delivered yet.”

Van Dyk Health Care of northern New Jersey, with 70-bed and 96-bed SNFs and a 120-bed assisted living facility, also relies on partners to stay competitive and prove the organization’s value.

The small organization’s partners provide clinical and financial resources, the ability for the company to benchmark itself against other facilities nationally and locally, the ability to share data with referral sources via marketing information, and the ability to manage diseases efficiently, Chief Operating Officer Mary Jo Kurtz told session attendees. In the case of its SNFs, she said, “Our whole goal is to try to prove to the hospitals that we have the infrastructure to keep their patients with us during their rehab stay.”