Healthcare Reform Spurred by Affordable Care Act Requires a Value-Based System

By Gary Ulicny, Ph.D.
President and CEO, Shepherd Center

The passage of the Affordable Care Act has significantly increased the pace of healthcare reform implementation. Many experts believe the most significant change will require healthcare providers to document their value. In this context, value is the relationship between the cost of providing healthcare and the outcomes the care yields.

Shepherd Center is unique in providing value by saving money before the injury, during rehabilitation and also once a patient returns home. Because we have our own ICU, early referral to Shepherd can eliminate a lengthy stay in an acute care hospital’s ICU. After patients discharge, keeping our readmission rates low saves ongoing health resource use.

By producing better functional improvement during rehabilitation, we can substantially reduce the amount of assistance patients will need over a lifetime.

We are confident in being able to provide value because we have focused on a small subset of the post-acute population. By focusing only on brain and spinal cord injury treatment and rehabilitation, Shepherd Center has created a database that allows our clinicians to make accurate predictions about the course of treatment for patients. 

As post-acute providers working to survive in this new world order, we must have accurate information about the costs of care, as well as the ability to relate that cost to changes in outcomes. This means our new electronic medical records (EMR) system must track costs so we can analyze their effects on outcome. 

For example, if we provide more physical therapy for a patient, what is the return on that investment in the patient’s functional improvement? For providers who offer the general spectrum of post-acute care, it may be difficult to extrapolate some costs associated with specialized populations.

Even within Shepherd Center’s specialized patient population, extrapolation may be difficult. For example, Shepherd’s average age for patients in the spinal cord injury program is in the mid-30s. But the larger Uniform Data System (UDS) indicates the average age is in the 60s. This means that even among very specialized diagnostic groups, there may be huge swings in the healthcare costs based on factors such as age, demographics, etc.

Even more importantly, to demonstrate ongoing value, healthcare organizations must be able to track costs associated with healthcare use once patients leave the hospital setting.

Clearly, adapting to the new rules in healthcare reform will require many post-acute healthcare providers to increase their data analysis capabilities and their ability to manage patients through an entire continuum of care. Yet, post-acute care is fragmented across many settings (e.g., inpatient rehabilitation units, long-term care hospitals, skilled nursing facilities, outpatient programs).

The role of case management will become increasingly important because new, value-based reimbursement models will require facilities to know exactly when to move the patient to a less costly level of care without compromising outcomes. Providers who flourish will be the ones who understand the importance of value and figure out how to provide it.