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Partnering in Postacute Darkness? CMS Has Data That Will Help
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Partnering in Postacute Darkness? CMS Has Data That Will Help

Terry E. Hill, MD
Health systems will improve postacute outcomes when CMS begins sharing its performance data on nursing facility chains.
Am J Manag Care. 2019;25(12):578-579
Takeaway Points
  • Hospitals, physician groups, and health plans suffer from information asymmetry in trying to collaborate with nursing facilities managed by corporate chains.
  • Investments of time and resources in postacute collaborations will be more fruitful when information on chain performance is available.
  • CMS now collects chain ownership information but has yet to aggregate performance data by chain and share this performance on Nursing Home Compare.
  • Transparency of chain performance will trigger improved postacute outcomes via direct and indirect mechanisms.
In 2013 the National Academy of Medicine pointed out that by far the largest source of variation in Medicare costs is postacute care.1 Health systems then began to pay increasing attention to postacute care, especially as more providers became accountable for those costs. Meanwhile, CMS, researchers, and the media continue to point out enormous variation in skilled nursing facility (SNF) quality. Nursing Home Compare (NHC), the CMS public reporting website, is a market-based transparency strategy designed to enable consumers to choose higher-quality facilities. Upstream organizations such as health systems, hospitals, physician groups, and health plans are increasingly using NHC to inform their own efforts to channel patients to better facilities. While this use of NHC is all well and good, the National Academy of Medicine2 and the Government Accountability Office (GAO)3 have long criticized CMS for not aggregating measures from individual SNFs into measures for the multifacility organizations (ie, corporate chains) that manage SNFs. In this commentary, I outline why upstream organizations, and not just consumers, should be concerned about this lack of transparency and how this information could accelerate improvement in this chronically troubled sector of healthcare delivery.

NHC Has Proven Validity

The good news is that NHC includes a robust host of measures reflecting quality, utilization, and cost. Its 5-star system now aggregates these measures into a postacute score, a long-stay score, and a global score. Even earlier versions of NHC have proven validity. Channeling patients to SNFs with higher scores leads to lower mortality, fewer readmissions, and shorter stays.4

Most of us who are upstream providers being held accountable for readmissions and/or postacute costs have begun developing formal or informal relationships with SNFs, in some cases sharing data systems and establishing our geriatricians, nurse practitioners, care coordinators, and educators within the facilities. NHC can assist us in choosing preferred SNFs and developing such partnerships, but it still leaves us with knowledge gaps and a series of challenges.

What’s Missing Is Chain Performance

NHC offers a line of sight into the performance of only individual SNFs, but more than half of nongovernmental SNFs are managed by corporate chains, most of which are for-profit. We can expect yet more consolidation to occur.5 Research studies have found both positive and negative effects of chain ownership. From the upstream provider point of view, however, what matters is not whether chains in general are good or bad; what matters is whether a given chain with its SNF(s) in a provider’s territory is likely to be a good candidate for long-term collaboration. Corporate managers of chains make decisions about strategies, policies, personnel, and resources that have consequential impacts on care quality within their facilities. Their decisions lead to performance variation among chains as well as variation among SNFs within their own chain, whereas their local administrators usually lack the power and resources required for innovation, and the frequent turnover of these administrators can lay waste to collaboration efforts.

Given the increasingly obscure power hierarchies in this industry, upstream providers may have difficulty even discovering which SNFs are in which chains. Indeed, this has been a chronic complaint of the GAO, the Office of the Inspector General (OIG), and even staff at CMS regional offices.3 CMS now collects chain ownership information but has yet to aggregate performance data by chain and share this performance on NHC. As a result, upstream providers suffer from unnecessary information asymmetry in trying to choose and collaborate with SNFs.

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