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Every day it seems as though supply chain leaders take on new challenges, largely driven by evolving reimbursement models and the need for coordinated care. Extending the supply chain across the post-acute continuum is likely to be the next great challenge.
“In speaking with hundreds of supply chain leaders, the level of responsibility and oversight for post-acute care settings varied substantially by organization but one message was consistent – if you don’t manage the post-acute care continuum today, get ready, it’s coming”, noted Greg Colizzi, Vice President, Health Systems Marketing for McKesson.
There are several factors driving the focus on post-acute including an aging population, value-based reimbursement models and the need to reduce hospital readmissions, he added. For health systems, post-acute care settings play a vital role in the delivery of care and lowering the overall cost to the healthcare system, but different rules may apply.
The patient payor mix can often dictate how care and medical supplies are delivered in a post-acute setting, explained Deborah Haywood, Vice President, Strategic Development for Extended Care at McKesson. “When the patient has Medicare, Medicaid, private insurance, or managed care, the coverage dictates how much health systems will actually get paid for that care delivered in the post-acute setting. Each payor has a plan of care with a formulary of products that can be used, and most importantly, a specific time-frame within which they can get paid.”
“When the patient has Medicare, Medicaid, private insurance, or managed care, the coverage dictates how much health systems will actually get paid for that care delivered in the post-acute setting. Each payor has a plan of care with a formulary of products that can be used, and most importantly, a specific time-frame within which they can get paid.”
– Deborah Haywood, Vice President, Strategic Development for Extended Care at McKesson
“Our post-acute care provider must document the products they supply and tie them to the outcomes they have to achieve. This has not always been the case. Increased regulation for quality care and the penalties that come along with hospital readmission require closer tracking. Leveraging technology and product formulary management are key to reducing hidden costs,” Haywood explained.
Rules management systems can be set up to manage formularies and utilization, and to limit product purchases. These features can help health systems avoid over-utilization of products and monitor clinical compliance and outcomes that help support quality care. When a product order is placed that goes beyond best practice standards and rules that the provider has set, a notification is sent requiring approval before the medical supplies are shipped. This empowers the post-acute care provider to be proactive in managing supply spend utilization.
With the use of smart phones, kiosks and tablets, supplies can be ordered directly where the care is provided. In addition to formulary and rules management, many of these solutions integrate with the provider’s EHR to allow for quick search features, supply spend reporting and trending over periods of time. This gives providers and clinicians the ability to make proactive decisions empowering them to drive higher quality patient care while reducing their operating costs.
Although the post-acute care continuum is comprised of many different types of care facilities, the two likely to make up the highest volume and require the most attention:
Health systems need their supply chain teams to adapt proven best practices to meet the product and service requirements of these complex care settings. Many of the same supply chain principles still apply – the need to reduce costs, improve productivity and drive standardization. However, taking control of these initiatives can be tricky.
Skilled nursing facilities
Skilled nursing facilities operationally tend to be more like hospitals than physician offices. They are generally ordering high volume and high cube items that are relatively low costs including incontinence and nutritional supplies. However more advanced facilities include closed door pharmacies and offer lab testing for their patients. By offering point-of-care lab testing to their patients, SNFs can help identify a patient’s condition without a costly trip back to the hospital. Under current value-based care reimbursement models, hospital readmissions is a top-of-mind issue for the administrator for any SNF.
18% of patients discharged to an LTC facility are readmitted to a hospital with an average cost of $10.4K per event.1
Supply chain leaders can help their SNFs by aligning on the operational model and technology solutions that can help their staff become more productive. They can also leverage the clinical programs offered by their distributor and manufacturer relationships to help support quality of care, reduce hospital readmissions, streamline back-office functions and address staff turnover.
Home Health Agencies
Home care is one of the fastest growing sectors of the health care industry and health systems are taking note. Over the past two years, 177 health systems acquired home health agencies.2
The primary driver, “Today’s patient doesn’t want to be cared for in the hospital – they want to be cared for in the home first, whenever possible,” said Haywood.
Taking care of patients in their own homes presents some new challenges for clinicians and supply chain leaders alike. Clinicians are traveling from home to home, never really knowing the environment they are walking into, the condition of the patient when they arrive, or the availability of the products needed to treat the condition. Having the right technology and operational model is critical to the productivity of these nurses. They are not productive unless they are in front of a patient with the tools they need to perform their tasks efficiently and effectively.
“Mobile technology solutions are vital to helping the home health clinician be as productive as they can be without wasting time placing orders, filing paperwork and chasing down supplies.” Haywood explains. Having the right technology in the nurse’s hands can allow them to document visits, charge capture for supplies used and place an order for additional supplies all while at the patient’s bedside. “The more the technology is integrated into their workflow, the more patients they will be able to see”, adds Haywood.
Supply chain teams should think out of the box when designing a customized logistics strategy for home health. The last thing you want is your nurses driving back to a central warehouse to replenish supplies. That is not a productive use of their time.
There are two distribution models to consider when building your home health strategy: clinician trunk bin and patient home delivery (PHD).
A clinician trunk bin program allows the nurse to keep a tote of working stock in a plastic bin in their car. As supplies are used from the bin, they can use her mobile ordering platform to capture the utilization and place an order for those suppliers. The supplies are shipped from the distributor directly to the nurse’s home for replenishment. This supply chain strategy minimizes the number of trips a home health nurse will make to their distribution center or home health agency.
Another option is a patient home delivery (PHD) model. With this model the patient’s physician or home health nurse can place an order for the supplies specific to that patient. The supplies are delivered to the patient’s home prior to the home health nurse arriving. To protect the patient’s privacy, it’s important that these supplies are shipped in discrete packaging. The benefits of a PHD program includes making it easy to order critical supplies, improving productivity and reducing lapses in care.
When building and implementing a full post-acute strategy, health systems should focus on reducing the administrative burden of their clinicians and staff, whether in a home health setting, a skilled nursing facility, or other post-acute setting. Doing so can help support better clinical outcomes and improve business performance overall.
“Keeping the patient healthy, and comfortable for a thriving recovery is the ultimate goal in post-acute care,” Haywood stated. “Supporting the patients return to enjoying quality of life instead of being re-admitted is ideal.” Supply chain teams and their distributor can help providers anticipate supply needed to provide the best care possible. “We help health systems take the next step in achieving their goals centered around patient care, better outcomes, driving reimbursement and productivity,” Haywood concludes.
Learn how lab is a key component of your health system non-acute strategy, helping to enhance revenue and supporting better patient outcomes when set up properly with the right processes and procedures.