Care Transformation Center Blog

Reflecting on ACO success: Kindred Healthcare and the Silver State ACO

by Jared Landis and Keerthi Bandi

Kindred Healthcare is a strategic owner and partner in the Silver State ACO, a Las Vegas-based MSSP Track 1 participant that generated shared savings in 2015.

We recently sat down with Kindred's Drew Sheinen, Vice President of Strategy and Network Operations, and Linn Billingsley, Division Vice President of the Las Vegas Integrated Market, to discuss the lessons they've learned through ACO participation. 

Question: Can you provide an overview of the Silver State ACO and its key participants?

Answer: SWR Investments, LLC, a physician consultant group, formed the Silver State ACO in 2014 and continues to serve as its managing entity. Kindred joined in mid-2014 as majority owner and The Valley Health System bought in as a minority owner in August of 2016.

When Kindred first joined, the ACO covered a total of 11,000 lives. We are now up to approximately 25,000 covered lives and 44 physician practices representing 270 physicians across the state of Nevada with a focus in Clark County in Southern Nevada and, more recently, the Reno area. Most are family or internal medicine practices, although we do have three cardiology groups and a pulmonology group. We also have a preferred provider network, which includes some specialists and select outpatient services, diagnostics, and labs.

With our hospital and physician partners and Kindred's post-acute network, which includes three Long-Term Acute Care Hospital (LTACHS), two transitional care centers, home health, hospice, and personal care, we're certainly hitting the ACO intention of building a comprehensive preferred network.

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Q: How has your involvement in the ACO altered how you utilize your post-acute settings?

A: Acute rehab utilization among Medicare beneficiaries in the Vegas market is almost 4 times the national and ACO average, while SNF utilization is below average. Everyone involved in the ACO has an incentive to discharge patients to the lowest-cost appropriate setting, so we are working to promote Skilled Nursing Facility (SNF) usage over acute rehab for inpatient rehabilitation needs. So far, we have reduced rehab utilization to three times the national and ACO average.

Home health is another focus area for us, because utilization in the Vegas market is 2.5 to 3 times the national average. It would be great if we were seeing effective use of home health over higher cost inpatient settings. In reality, there are almost 300 home health agencies concentrated in a metropolitan area of 2 million people, resulting in significant churning and over-utilization. As of now, we have reduced home health utilization within the ACO to 2 times the national average. Going forward, we intend to shift more beneficiaries into Kindred's local home health offerings, where we can more closely monitor utilization.

While we recognize that organizational strategy varies based on national trends, in the Las Vegas market these are important steps toward creating necessary behavioral changes in how people utilize post-acute services.

Q: What are some areas in which you would like to see even greater change in post-acute utilization?

A: We would like to see even more progress in decreasing Inpatient Rehabilitation Facility (IRF) and home health utilization and increasing SNF utilization. There is a physician-buy in component to achieving these goals as well as a logistical one—we need to know when a patient is hospitalized and then alert a physician to reach out and educate the patient about the ACO's aims and their post-acute options. We are making progress on this; we have a real-time view on admissions into all of the ACO in-network hospitals and are looking to expand our capabilities. For non-ACO community hospitals, we drive admissions to designated hospitalist groups in exchange for a role in selecting high-quality downstream placements for patients there. It'd be great if that was working at even a 50% compliance rate. It's our biggest challenge as well as our biggest opportunity.

Q: What challenges have you faced in securing provider buy-in to the ACO's aims?

A: Many participating physicians initially assumed that Kindred's motive for joining the ACO was to increase volumes to our own post-acute settings rather than to drive savings. We've had to make it very clear that our involvement is not to improve our own performance in particular sectors. We're here to reduce initial hospitalizations and readmissions in order to drive patients to PCP offices and into chronic care management.

Had we not distributed shared savings payouts to physicians in the final quarter of last year, we would still be on a very steep uphill battle. Now that we have, physicians are beginning to believe that this ACO can deliver on its goals and we're seeing them engage more in efforts to influence post-acute utilization. We now have three more years to get organized around this so that when we enter into greater risk and reward, we'll know how to pull the levers to effectively steer patients and physician practices even more effectively than we do today.

Q: What would you change about your strategy if you could go back and do it again?

A: The ACO partners weren't entirely certain of one another's motives or measures for success at the start, so it took time to zero in on specific activities and then even more to fully understand how to work with data around those focus areas. We should have done more forming, storming, and norming early on to quickly establish specific activities of joint interest.

Another area for reflection is how we used our limited financial resources in past years. We did the best we could, given the newness of ACOs and the difficulty of trying to run essentially an HMO on a $7 per member per month rate. We've since recouped 2015's operating costs, and are now wondering how much money to invest in the operation of the ACO as we expand this model to other markets.

Ultimately though, we've realized that while this hasn't been perfect, we're doing just fine. There is no operating manual for an undertaking like this—everyone is out there being as entrepreneurial and innovative as they can, using whatever knowledge and experience they have to try and make it work.

Q: You were among only 22% of ACO's that generated shared savings in 2015, so you've accomplished the aims of the ACO program. What are your next steps?  

A: Before we learned about our 2015 savings late last year, we opted to remain in Track 1 through 2019.  With our recently finalized relationship with The Valley Health System, expansion into the Reno area, and strong tracking for shared savings in 2016, we are beginning to consider potential next steps after 2019, such as MSSP Track 2 or 3. We do first want to get a foothold on our full catchment area to identify where we can be successful. Ultimately, taking on a bigger role in risk will depend on our ability to drive physician behavior and patient participation in a way that makes sense to be at risk.

Q: What would you tell providers considering taking on risk?

A: Three main things come to mind:

  1. Be sure you're getting into it for the right reasons. You don't want to find out later that people aren't on the same page about something as basic as why the organization was formed.

  2. Ensure that your incentives and objectives are aligned and understood by everyone involved. Identifying and communicating with key drivers of the initiative is an important step towards achieving this.

  3. Focus on data and building your tech infrastructure. You limit your chances for success if you lack the ability to use and apply data and technology.

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