This year, Encompass Health (NYSE: EHC) is executing on a new playbook to drive more—and more effective—collaboration between its inpatient rehabilitation facilities (IRFs) and home health agencies.

That playbook had been in development since Mark Tarr became CEO of the company, then known as HealthSouth, in late 2016. Now, Tarr is pleased to see some promising early results in the form of improved care outcomes and higher patient satisfaction.

Birmingham, Alabama-based Encompass Health is the largest owner and operator of IRFs and the fourth-largest provider of Medicare-certified home health services in the United States. Of its 127 IRFs, 60% are located within a 30-mile radius of a company-owned home health location. The company is seeking to increase that integration through mergers and acquisitions of new home health locations, on the premise that the health care system as a whole is demanding more coordinated care, and Medicare specifically is moving toward episodic, site-neutral payments.

Simply co-locating IRFs and home health agencies is not enough, though—a systematic approach to collaboration is needed to achieve outcomes such as reduced hospital readmissions, Tarr told Home Health Care News this week. Having been HealthSouth’s COO for five years before becoming CEO, Tarr has tapped his operational expertise to oversee the development of these best practices, some of which he described to HHCN. He also spoke about the promise of predictive analytics, his view on private duty home care, and his take on the transformational mergers and acquisitions that have occurred in the home health industry over the last several months.

I believe there’s been a project at Encompass Health called TeamWorks, to drive more collaboration between IRFs and home health. What does TeamWorks involve, when did it start?

Tarr: TeamWorks is a moniker we’ve applied to the process of standardizing any operational goal that we have within the company. I think the TeamWorks clinical collaboration was the third major TeamWorks initiative that we’ve had. We don’t have them every year. We may standardize something that may not be as comprehensive as it is when we put a TeamWorks moniker on it. The clinical collaboration initiative came out of the fact that out of our portfolio of marketplaces where we had both an IRF and a home health site, there were wide ranges in the collaboration and the coordination of those patients going from the facility-based to the home setting.

Stepping back to the year 2015-2016, we started the process of defining what a clinical collaboration would look like; 2017 was the year we actually put the resources [in place], utilizing [professional audit and advisory firm] KPMG as an outside entity … to have somebody think through the process.

We had members on the TeamWorks team from both of the business segments, hospitals and folks from the home health agencies. Collaboratively, they worked to say, “If we had a perfect way to do this, to start from scratch and lay out the process for this clinical collaboration that would best meet the patient needs, family needs, and from a resource standpoint maximize what we do internally, what would that look like? What would a playbook look like for that transition from our hospital to the home setting, with our home health agency?”

We took the initial draft of what I’m going to refer to as the playbook, rolled it out to some pilot marketplaces, and then took it back, massaged the areas that didn’t work out too well or worked out better than others, and then finalized it.

By the end of last year, we had this rolled out in every overlap marketplace in the company, which is about 60% of our hospital locations.

What are some of the most important plays in the playbook?

We have someone called a care transition coordinator, CTC, which is an individual that lots of times is a nurse or case manager … they help coordinate that transition for the patient from one of our IRFs to the home setting. That person is pivotal. They have to have the clinical knowledge that applies to the patient needs, a good relationship with the hospital staff, and a good relationship with the home health agencies that are in their marketplace. And they need to be making sure that every step along the way of that transfer of that patient from the facility to home, the patient’s needs are met, whether that’s family training, medication reconciliation, establishing follow-up appointments.

It may be early on in the patient’s stay in the hospital, when already the clinical team has worked with the patient and may have said, Mrs. Smith is a stroke patient, she will likely need home health in two weeks. So, it can start early on in the process. The earlier in the process, the better it is, so that the patient and the patient’s family knows what to expect and can get more comfortable with the process.

If you look at the various settings within post-acute, the industry has not done a great job over the years in terms of making those transitions smooth, from one setting to the next. Part of it has to do with the fact that we weren’t invested in that process. You had different ownership at different levels.

We’ve tried to do everything we can to make sure that we have a very smooth, well-orchestrated transition, and that’s what clinical collaboration is all about. If we do a good job with that, then we’ll have better outcomes and better patient satisfaction.

The first quarter, we started to see, and it’s still early on, but we’re starting to see in those overlap markets where we’ve done the TeamWorks initiative, we’re starting to see a trend of increased patient experience scores in terms of, they’re happier with the discharge process from the hospital, they seem to have been very comfortable on that transition to home. As well, we’re starting to see fewer and fewer of those patients return back to the acute care hospital. Or, there are fewer of them going to a skilled nursing facility at the time they’re discharged from the rehab hospital.

Are there specific goals in terms of the readmission rate you want to achieve?

We’re early on. The lower the number, the better. I think after a couple more quarters with the TeamWorks rolled out, and we start to see these trends develop, we’ll be able to put some numbers around those and have some goals set in terms of overall impact.

Our focus last year was getting the collaboration set, standardized, and rolled out to the entire portfolio of overlap marketplaces. And that’s what we did. Now we’re expecting to see, what are the benefits of doing that?

How many care transition coordinators are there?

Those metrics are starting to play out, in terms of how many patients a care transition coordinator can care for. If we had a really large hospital with a lot of discharges, you may have more than one. Most of the overlap markets right now have one per hospital, or the agency has that on behalf of the hospital. I could easily see that being more than one for the larger hospitals. We have a couple hospitals that are north of 100 beds, and one or two that are close to 200 beds. Those would be hospitals where you could expect to see a volume of discharges great enough to warrant more than one care transition coordinator.

What’s the role of technology in supporting collaboration? You use Cerner in IRFs and Homecare Homebase on the home health side, are those companies working together to create a unified platform? 

Yes, they are. Every place that we can do interfaces, we either have or are in the course of doing that. That is key to our success on this.

We have developed an IRF-specific clinical information system with Cerner and our hospitals. Homecare Homebase obviously was initiated by [Encompass Health CEO for Home Health & Hospice] April Anthony. Our home health locations are the super-users of that IT system.

We have something we call BEACON, which is our internal management reporting system, where we capture data from several different information silos and pull it together for management reports. So, our management teams in the marketplaces now have a way of tracking what their clinical collaboration percentage is at various sites, and that information rolls up … We do the same on the hospital side. It’s better to manage and look at trends and look at those [locations] that seem to be excelling and those that seem to be lagging, so we can go in and address operational issues, whatever breakdowns there are.

Are there common issues that tend to cause those breakdowns?

It varies location to location. I think you could probably count on, like any other operational issue, there’s going to be four or five key areas where we would bring our toolbox in.

In any given marketplace, you may have a physician who has a preferred home health location or agency, that we have to win over. We usually do that by showing them our quality and the outcomes, and that’s part of the overall sales process.

It ultimately comes down to people referring to people. The better the team is working in a collaborative manner, the better off you are.

There are other points within TeamWorks, in terms of when the CTC can meet with the family and talk about Encompass Home Health and what the options are on that. There are standardized processes that we work on with our physicians as part of that same thing. I refer to it as a playbook, but it’s digitized and the process has been rolled out, so it’s really gaining some traction and we’re very pleased with where we are.

One pilot project has been happening at Christus Trinity Mother Frances, a hospital in Tyler, Texas, that is involved in the Comprehensive Care for Joint Replacements (CJR) program. What has that pilot involved?

More and more acute care hospital systems are looking for answers on post-acute. Trinity Mother Frances in Tyler happens to be one of our 42 partnered hospitals. Out of 127 hospitals, 42 are joint venture partnerships. We’re working collaboratively with them.

We said, let’s see what we can do in terms of using our clinical best practices and some of the applications that we have with our systems, and let’s take a particular diagnostic category that we think we can bring some expertise in, relative to the coordination of care. What’s the discharge process, what’s the best site for that patient to be placed in?

In that marketplace we took hip fractures. Even though we have been working with that hospital for years, there were a lot of opportunities that we could collaborate on. I mentioned earlier, that whole transition from one setting to another is an area that acute and post-acute hasn’t always been real linked up on.

We had 40 hip fracture patients, which is 18 more than we’d seen the previous time period, and only one of those patients was returned back to the acute care hospital for a readmission. So, we feel like that is real good progress even though it’s still a fairly small sample size. But it shows us, and shows Trinity Mother Frances, that working with a post-acute provider like us, there are benefits to be had in terms of overall quality outcomes, and by the way, some of those are the ones tied to payment or the avoidance of penalties at the acute-care hospital level.

If hospitals in CJR are seeing financial upside through their participation in that program, is that trickling down to the post-acute providers that helped them achieve that?

No.

Should that change?

If this train can continue, where you have a very small percentage [of patients] readmitted to the hospital, I think that bodes very well for us to continue to be part of that process and should get more and more of those patients.

We approached every acute care hospital in the CJR markets and told them we were ready to work with them on that, up to and including looking at how we could potentially take some [financial] risk in order to participate on the upside that they would be getting. And the way the documents from CMS [were written], it got more complicated that what people were willing to take on at that time. But we did get a lot of goodwill just from the fact that we put ourselves in that position. I think it’s one of the benefits of our scale and ability to apply resources in that manner.

How much can technology and predictive analytics help in determining the right setting and care for, say, a hip patient?

A great deal.

We now have a large bolus of information, our own information from our hospitals, that we can extract electronically, thanks to the nearly five-year, $200 million [effort] to get the Cerner [platform] across our entire portfolio. It’s also a stepping stone toward working with Cerner on the Post-Acute Innovation Center, where we can collaborate with them and use their huge database to help create these predictive analytics and start to identify the best practices for identifying what patients belong in what setting, and what type of conditions they may have.

We’ve already tried it and have rolled out something we call React. That’s all internal, where we used our physicians to come up with a series of markers they consider that could indicate a greater likelihood of a patient needing to be readmitted to the acute care hospital. Within the Cerner system, we were able to put in various warnings, and we have protocols that our physicians can take action on before a patient gets to a situation that may indicate that they’d need to be readmitted. Sometimes it’s as simple as hydration or a medication adjustment.

That is one example of how we’re using data analytics and predictive modeling, that we say, it looks like we’ve got some hospitals that are running higher on acute-care transfer rates than others, what can we do with those patients earlier on in their process so that we can be aggressive in their treatment?

You’ve spoken on earnings calls about the intention to acquire home health agencies in IRF markets, to increase care collaboration. What about private duty home care? Other home health companies are branching into this service line aggressively, and Medicare Advantage plans might start to cover this type of care starting next year. But I know April Anthony has said there’s not a strong desire to add private duty. 

I agree with April, right now, in terms of the private duty space. We’re not convinced that we have to do that right now. I don’t want to say we would never do that. We are getting two locations through the Camellia acquisition, and we plan to continue running those. Right now, we have no near-term plans to get into that service line in a big way.

There have been some major transactions announced in the last year, including the LHC Group merger with Almost Family, and Humana buying a stake in Kindred at Home. What do you make of this consolidation and how it’s changing the competitive landscape? 

It’s interesting. For Humana specifically, we have very little overlap where they’re a payer for us. The MA [Medicare Advantage] plans have historically not paid very well, but I think the fact that Humana is taking a dive into home health hopefully will be an indicator on the value that they see. Home health is the low-cost setting. I still think that there is a chance at some point in the future where MA plans will see the value of home health and be willing to pay a fair rate for that. It’s kind of a wait and see right now, but I think it’s a pretty good indication that Humana sees the value in home health.

There have been some other signs of potential health care disruption on the horizon. I’m thinking of Amazon, Berkshire Hathaway, and JP Morgan Chase teaming up on a health care initiative, and rumors of Wal-Mart considering a Humana buy-out. Anything on your radar that concerns or intrigues you?

It’s interesting to watch this happen.

Our focus right now is really on the blocking-and-tackling of our business. I’m very excited about the fact that we’ve been able to show the growth that we have on a consistent basis, and that our strategy of having a facility-based and home-based setting, and our belief on where payment is headed in an episodic manner, positions us well for the future. We’ve talked a little about the IT and investments we’ve made there. I think that’s all part of letting us be at the right place at the right time with the right level of care, in an efficient manner. We see a lot of growth opportunity with the demographic tailwind that’s out there. Whether that’s on the IRF side or the home health side or even the hospice side, the demographics are very favorable for post-acute and will drive the need for our services in the years to come.

Written by Tim Mullaney