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Senior Living Business: Identify—And Use—Operational Benchmarks

Prepare For Health-Care Reform By Documenting Your Excellence

 Defining appropriate operational performance metrics, identifying improvement opportunities, and measuring and monitoring results are important strategies that help an organization understand its operational effectiveness and position itself for continued success.

 Clearly, it has always been important to track performance metrics. And senior living organizations have been better than others in tying their metrics to their strategic plans and the corresponding initiatives—mainly for purposes such as tracking certain quality indicators or meeting survey requirements, according to Nicole Fallon, Manager of Health Care Consulting at LarsonAllen in Minneapolis, Minnesota. As part of health-care reform, Medicare (and probably Medicaid) will begin reimbursing providers based on value rather than volume in the next few years—and maybe even sooner by some third-party payers.

 “A value-based purchasing concept manifests in a variety of ways,” she explained. “Providers need to lower the cost of delivering care while maintaining or improving the quality of care delivered.” As a result, providers need to start implementing best practices and finding more cost-effective ways to deliver care. Although a lot of the health-care reform details have yet to be ironed out, providers will be rewarded for good quality, for meeting certain benchmarks, and for making certain improvements over time. Organizations may be benchmarked against themselves and/or their peers.

 Health-care reform and the payment reform pieces of it—bundled payments, value-based purchasing, accountable care organizations—may appear daunting; but, simply put, a hospital will receive a bundled payment, and a post-acute care provider will negotiate for a portion of it. The data accumulated from a variety of metrics over time will make the case for the nursing home.

 So where do you start? Today, nursing homes are paid as long as someone is in the bed. But does the organization know what it really costs to do short-term rehab for someone post-hospitalization for a hip replacement vs. someone who’s there for a chronic problem? What is the range if the person has complications—three problems instead of just one? What is the difference if the person is age 45 vs. 85? There are a lot of moving parts. 

 For senior living organizations, tracking hospital readmissions is a good starting point. Hospitals will be penalized severely for being in the bottom quartile of readmission rates. By helping a hospital reduce its readmissions, the post-acute provider will be well-positioned for referrals or can become a preferred provider.  Want to read more? Click here for a free trial and download the current issue today