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Length of Stay and How it Impacts Hospitals

For hospitals, managing the length of stay is not a new concern. What has changed, however, for many hospitals is the level of attention and focus on it. At the height of Covid-19, many hospitals were merely in “survival mode” and were doing everything they could to meet the patient’s needs.

Born out of necessity, a reactive mindset drove the creation of having to develop strategies to move patients through the continuum due primarily to capacity issues. In a post-acute Covid era, it is time to get back to the basics of managing the length of stay in a more proactive approach.

To develop effective strategies, hospital leaders must first understand common root causes of long lengths of stay.

Establish a Target

Not having an established target can be a root cause of many length-of-stay issues. The old saying goes, “If you aim at nothing, you will hit it every time,” which describes what most leaders had to do when they were in “firefighting” mode, just trying to keep operations going. Luckily, Medicare publishes the geometric length of stay expected by MS-DRG annually. The data gives healthcare teams a common language and measure that provides the yardstick the discharge planning team should use to predict lengths of stay.

To become more proactive, discharge planning teams can establish targets by understanding early on during care what MS-DRGs, and the associated length of stay will likely be for their patients. To provide a realistic prediction of evolving MS-DRG and associated length of stay, healthcare leaders should ensure coders use concurrent coding in real-time based on documentation rather than waiting until after discharge.

Take “Discharge Planning Begins on Admission” Seriously

We all know the saying that discharge planning begins on admission. One of the basic oversights in this area is not setting expectations for the patient’s family on day one. When a discharge planning team starts the conversation upon admission, this allows for crucial conversations to occur that will ensure that goals and barriers are understood by the entire care team. What we do not want to see is discharge planning occurring after the provider rounds at 8:00 A.M., and suddenly, the care team is thinking about transportation and other details required for the discharge of the patient.

Imagine if you are with your family member at admission and the discharge planner has just finished their admission assessment and provides the following information:

“We hope that your loved one will be better soon and will be able to get back home. Please note that our providers usually round early in the morning before 8:00 A.M. To better understand the transportation needs of your family member, if they are discharged to home, what arrangements will be made to pick up your family member? Just so you are also aware, once the provider discharges them to home, they will go home the same day the order is written and therefore, we need to have everything pre-arranged.”

The above messaging can be personalized by each individual discharge planner as long as the intent is accomplished by starting the discharge planning upon admission. Ultimately, hospital leaders will need to reinforce and set expectations around the day of discharge including instilling a sense of urgency for all who have a role.

Manage Physician Preferences and Communication

Many hospitals have moved to a hospitalist model to manage care of inpatients. As the hospitalists engage specialists needed for care, issues affecting length of stay may arise. This can cause confusion with who is in “charge” of the patient, often leading to delay in discharging patients because the specialist has yet to see the patient.

To resolve this, leaders need to set expectations for both hospitalist and specialist when it comes to who is discharging the patient. If there is sufficient evidence within the parameters of sound clinical care for the hospitalist to discharge a patient, the hospitalist should be able to do so. This not only leads to decreased length of stay, but also helps clinical staff taking care of the patient to know who ultimately will discharging the patient.

Clear the Path for Post-Acute Services

A good relationship with post-acute organizations is imperative for the timely and effective transition after discharge. Discharged patients may go home with no services, home with home health, home with outpatient therapy services, skilled nursing facility, inpatient rehabilitation, or a long-term acute care facility. When patients are discharged to a post-acute facility, to ensure a smooth transition, leaders need to take a proactive approach to develop relationships with organizations that will ensure a smooth transition of care, a high level of communication, and a timely transfer of patients.

For example, some payers require prior authorization for admission to a skilled nursing facility. Leaders should find those skilled facilities that will do their part in the flow of information between all parties to facilitate a timely transfer. Alignment of communication and priorities is a must with these post-acute organizations.

Operational requirements such as preauthorization for admission to the skilled facility, for instance, must be completed with a sense of urgency. Discharge planners then play a role in communicating back to the patient and the family which post-acute facilities will have a smoother transition of care to help them make an informed decision when choosing a facility that is right for them.

Hospitals do not always have to have ownership in these organizations to have timely and effective communication. In fact, we find that many of these post-acute services, which are under common ownership, often operate in silos; that is, the director has goals and a budget they are trying to meet, and they are focused on that. They may not be tuned into the superordinate goals of the entire system, and the decisions they make for their unique level of care may not be the best for the system and the patient.

Length of Stay Financial Considerations

The variable cost reduction associated with reducing the length of stay may be obvious to some and not to others. Regardless, there are a couple financial considerations that may not be “front-of-mind” but cannot be discounted as you work to manage your length of stay.

One is the Medicare spend per beneficiary. The Spending per Hospital Patient with Medicare measure shows whether Medicare spends more, less, or about the same per Medicare patient treated in a specific hospital, compared to how much Medicare spends per patient nationally. This measure includes any Medicare Part A and Part B payments made for services provided to a patient during the 3 days prior to the hospital stay, during the stay, and during the 30 days after discharge from the hospital.

We have mentioned the need to collaborate with post-acute organizations for timely transfers. You will also want to work with post-acute organizations who provide efficient and effective care. Since this measure (Medicare spend per beneficiary) extends to thirty days after discharge, those costs that are incurred during this period is part of the formula and can affect your scoring. The score is part of the formula for value-based purchasing and thus can have a financial impact for the hospital.

Second, you will want to be mindful of premature discharges in which the MS-DRG is part of the transfer policy. When patients with certain Medicare MS-DRGs are discharged to a transfer facility (home health, skilled nursing facility, inpatient rehabilitation, inpatient psych or long-term acute care facility) and the length of stay is less than the expected one, the hospital may be subject to reduced payment. Let’s be clear. The care team at the hospital should provide the care needed on a patient-by-patient basis. They should also be aware of these length of stay parameters as a general target or guideline.

Weekend Coverage

Many hospitals have Monday through Friday case management/discharge planning with perhaps some “on call” services on Saturday. Consider staggering the schedule so that there is a person available on, at least, Saturday, to meet the needs of the patients and the hospitalists.

Contact Blue & Co. about Length of Stay Solutions

Is your length of stay in alignment with expectations? There are so many variables affecting length of stay. Perhaps it time to conduct a root cause analysis to see if there are some reasonable steps you can take to reduce your length of stay and associated costs. Reach out to your local Blue & Co. Advisor or a member of our Physician/Hospital Services team below.

John Britt, Physician/Hospital Services Senior Manager

Crystal Bingham, Physician/Hospital Services Manager

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