How One Health System Mastered Bundled Payments

Jan. 8, 2021
In the first article in a two-part series, Donna Sabol, R.N. of St. Luke’s University Health Network in Pennsylvania shares her system’s secrets of success around its bundled payment contracting

Last month, senior executives at the Charlotte-based Premier Inc. named the Bethlehem, Pa.-based St. Luke’s University Health Network, a fully integrated, nationally recognized health network serving Pennsylvania and New Jersey, the winner of Premier’s 2020 Richard A. Norling Premier Alliance Excellence Award.

 A press release issued on that December 7 noted that “Premier presented the annual award to St. Luke’s for exemplifying the highest level of industry innovation and advancements in delivering high-quality, cost-effective care. The St. Luke’s system – which includes 12 hospitals, more than 1,900 physicians and providers, and a regional medical school campus – leverages Premier’s performance improvement infrastructure and strategic supply chain services. In using Premier’s data, technology, supply chain services and expertise, St. Luke’s has consistently achieved top decile performance for quality and efficiency,” the press release noted. “As a member of Premier’s bundled payment collaborative, St. Luke’s has been a top performer in generating positive savings, realizing more than $1 million in savings year over year. Additionally, through its partnership with Premier, St. Luke’s is leveraging innovative predictive analytics technology to improve maternal health, prospectively identifying women at risk for pre-eclampsia, postpartum hemorrhage and pre-mature birth with a high level of accuracy.” The alliance also noted that “St. Luke’s was selected from Premier’s nationwide alliance of more than 4,100 U.S. hospitals and 200,000 other provider organizations.”

In a statement contained in the press release, Premier CEO Susan DeVore stated that “St. Luke’s has been a leader in accelerating innovative breakthroughs that enhance the lives of the more than 80,000 patients across its communities. St. Luke’s has a deep commitment to high-quality care delivery, and its approach to teaching, research and collaboration has created new standards of care for both Premier members and the healthcare industry overall,” DeVore said. “Premier’s 34-year partnership with St. Luke’s is exceptionally valued, and we are honored to recognize them with the 2020 Premier Alliance Excellence Award.”

“At St. Luke’s, we’re focused on caring for the sick and injured, improving the overall health of our communities and educating our healthcare professionals,” said Donna Sabol, senior vice president and chief quality officer at St. Luke’s, in accepting the award for her organization. “Our partnership with Premier has allowed us to generate innovative new concepts that foster patient-centered care and better educate our providers and communities. This award is a true testament to the steps St. Luke’s has taken to achieve true excellence as one connected health system.”

The press release also noted that, “Founded in 1872, St. Luke’s University Health Network (SLUHN) is a fully integrated, regional, non-profit network of more than 16,000 employees providing services at 12 hospitals sites and 300+ outpatient sites. With annual net revenue in excess of $2.5 billion, the Network’s service area includes 11 counties: Lehigh, Northampton, Berks, Bucks, Carbon, Montgomery, Monroe, Schuylkill and Luzerne counties in Pennsylvania and Warren and Hunterdon counties in New Jersey. Dedicated to advancing medical education, St. Luke’s is the preeminent teaching hospital in central-eastern Pennsylvania. In partnership with Temple University, St. Luke’s established the Lehigh Valley’s first and only regional medical school campus.” The press release also noted that the St. Luke’s organization “also operates the nation’s longest continuously operating School of Nursing, established in 1884, and 38 fully accredited graduate medical educational programs with 347 residents and fellows. St. Luke’s is the only Lehigh Valley-based healthcare system to earn Medicare’s five- and four-star ratings (the highest) for quality, efficiency and patient satisfaction. St. Luke’s is both a Leapfrog Group and Healthgrades Top Hospital and a Newsweek World’s Best Hospital. U.S. News & World Report ranked St. Luke’s No. 1 in the Lehigh Valley and No. 6 in the state. Three of IBM Watson Health’s 100 Top Hospitals are St. Luke’s hospitals. St. Luke’s University Hospital has earned the 100 Top Major Teaching Hospital designation from IBM Watson Health eight times total and six years in a row. St. Luke’s has also been cited by IBM Watson Health as a 50 Top Cardiovascular Program. Utilizing the Epic electronic medical record (EMR) system for both inpatient and outpatient services, the Network is a multi-year recipient of the Most Wired award recognizing the breadth of the SLUHN’s information technology applications such as telehealth, online scheduling and online pricing information. St. Luke’s is also recognized as one of the state’s lowest cost providers.

Healthcare Innovation Editor-in-Chief Mark Hagland interviewed both Donna Sabol of St. Luke’s and Chris Murphy, a principal in the Strategy, Innovation, and Population Health area at Premier, and a senior Premier executive who works closely with the St. Luke’s leaders and the leaders of other hospital-based organizations participating in bundled-payment programs, particularly those participating in the federal Bundled Payments for Care Improvement Advanced (BPCI Advanced) Model sponsored by the federal Centers for Medicare and Medicaid Services (CMS). The second part of this series will be an interview with Murphy; this first one provides excerpts from the interview with Sabol.

Congratulations on this award. Tell me about your work in the bundled payments area.

It’s part of a broader, ongoing quality initiative. We’ve been a part of Premier since the late 1980s, and have been a part of their work on clinical quality improvement since then; we were one of the first HQID [Hospital Quality Incentive Demonstration] improvement projects back in 2003, a six-year pilot. And there were fewer than 260 hospitals brave enough to transparently report quality data, because that had never been done before that. And we’ve worked side by side with Premier over the years. They help us with both bundled payment work and MSSP [the Medicare Shared Savings Program].

So how did this work fit into your overall journey around quality and accountable care?

The bundled payment program was the hallmark alternative payment model that Medicare put in place, and we went in big, putting in 84 bundles across four hospitals. We were the biggest program at the onset when it started. We figured that if we were going to do well, we would need enough at risk to make us change the way we deliver care. And now we’re in the BPCI model, which expanded that. Our participation began in the first year of the BPCI model, 2013.

What were your experiences in that program?

We did a lot of work with post-acute providers, nursing homes; we developed a group of preferred providers, SNIF providers, and helped them develop care protocols, and embedded a lot of our physicians in those nursing homes to help manage those patients, and we reduced lengths of stay and readmissions from those nursing homes, and reduced cost. And those bundles started with the admission to the hospital and ended with 90 days post-discharge. That was the bundled contract. So we were able to achieve lower cost and higher quality. Embedding the physicians was a big part of it; we also had nurses in the nursing homes working with patients with chronic illnesses like heart failure, and helped them with their case review meetings, on care planning, setting goals for patients, and with more timely and comprehensive communications with patients and families; really, just helping them manage those processes.

So, like so many things in healthcare, that ended up being focused on people and process, correct?

Yes, and a lot of it is getting people together, talking more about the patients, identifying where the opportunities are, and figuring out how to make it better.

So how has data helped you?

That’s been one of the most fascinating parts of the bundled payment program. We always knew our own internal data on readmissions, complications, costs, etc.; but what it was costing for home health, for nursing home care, for acute rehab care, lengths of stay, readmission rates, all in post-acute care, that was the key, getting that. Seeing who was performing well and who wasn’t, and what the cost was of that part of the care continuum, and where that impacted the total cost of the bundle, was really eye-opening. As in everything, the data was extremely important.

Once you got the data, did you narrow your networks?

Initially, we had to educate the nursing homes on what bundles were all about, and explain why it was important, and why we felt back in 2013 that this model would have staying power. Our message to the post-acute providers was, you can work with us now, or not do anything, and eventually, Medicare will cut costs, and they have, putting in payment changes based on readmissions. So we had weekly meetings at first and then monthly meetings. We showed them the data, and it was all blinded, so we said, here’s your data, you’re Nursing Home A, and here’s the performance from Nursing Homes B, C, and D, etc. And it was eye-opening for them.

It took a while for them to get comfortable for it. And we were very transparent in sharing data on each element of the post-acute care bundle. We also told them we would eventually unblind the data. And we did tell them we would narrow our networks. Two-thirds were able to stay with us, and one-third were not. And then we started a post-acute collaborative, and we invited them to share best practices with one another, in our preferred group. And then we unblinded the data. In our first collaborative meeting, we unblinded the data, and we had really good attendance.

All of that really speaks to classic clinical transformation work. What have some of the biggest lessons learned, been?

Several. One is that we realized that we had been very siloed along the care continuum, prior to bundles. So we really had to approach everyone as partners, with the goal of improving care to our patients. And let’s face it, long length of stay, just because payers will pay for it, won’t cut it. And they might say, well, I have a head in the bed. But we had to convince them that you’ll have heads in beds based on more admissions from us as preferred providers. And sharing the data was also key: unblinding the data at the appropriate moment. People are competitive and want to be the best. And we did it in a way that was supportive and brought people along over time. It takes building relationships and trust and building confidence, and you can’t do it in a punitive way, it has to be done in a supportive way, that we’re in this together, and that takes time.

And the other thing is, you can’t take your eye off the ball. The moment you say, we’re doing well… I always say, if you want a beautiful garden, you have to water it and weed it and provide it with fertilizer. I’m a gardener, and I have beautiful rose bushes, so the metaphor comes naturally to me! The other learning is that you have to do this in a big way, have enough at risk, to make fundamental changes. A lot of people took on one, two, or three bundles, and that’s not enough.

Is there anything that you’d like the new Congress and administration to think about, or do?

I think that it would be good if they could get more input directly from frontline providers into their policymaking. But being part of Premier is part of it, because we have representatives on Capitol Hill through them. And federal policy leaders could save a lot of frustration on the providers, if they could listen to providers in advance.

What will happen in the next two years?

The program has changed; you used to be able to pick individual diagnoses, but you can’t do that anymore, you have to take on specific clinical service lines like cardiac care, so you have to look at how you care for patients in different clusters. And we’re in orthopedics, cardiac, and neuro, and those are high-volume areas, so we’ll do well.

Is there anything you’d like to add?

I think it’s just really important to stay ahead of the curve and be innovative, and to welcome new opportunities and ways of approaching care. It’s the gift that keeps on giving, when you can improve your quality and cost. It certainly has helped with IBM Watson, Leapfrog,  U.S. News, and other national groups. We’re performing very well and are being recognized.

What might you like to say to healthcare IT leaders?

You need to partner with your chief quality officer! But really, technology has been fundamental to our success. We’re an Epic shop and have put Epic into all of our hospitals and clinics. And our goals—mine and our CIO’s—has been, if we’re going to spend a lot of money on our EHR, we want to improve our outcomes. So we have an IT person in every workgroup, so per sepsis, for example, we built tools into Epic, and have a sepsis algorithm that identifies that a patient is very early in sepsis, we can intervene very early. And we’re top-performing in that area. That’s how our IT department and our medical record have helped us to improve our sepsis care. And we use a lot of AI, to identify early sepsis—we use an algorithm that alerts us.

When did you begin to use an algorithm for sepsis?

About three years ago. And sepsis is the number-one discharge area in many parts of the country. And we’re using an algorithm for COVID-19 patients as well. And we’re monitoring patients through remote pulse oximetry, so if they start to see a patient start to deteriorate, they can quickly get to the patient. And we’re watching it virtually, so the floor nurses don’t have to go into and out of the patients’ rooms all the time. We began to use that algorithm for our COVID patients in March.

In the companion article to appear next, Premier’s Chris Murphy shares his perspectives on the learnings coming out of the ongoing bundled payments collaborative at Premier

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