Gentiva-Odyssey - Who Will Be the Beneficiaries?

I've suggested in the past that the hospice industry is sub-scale (too many small providers) so I've been asked recently if the news about the Gentiva acquisition of Odyssey marks the beginning of a consolidation that will benefit the delivery of hospice services in the US.

The recent business transaction between Gentiva and Odyssey is a blockbuster deal (or as some analysts put it, a game-changer) not only because of the dollars involved (a billion of them) but also because it involves the combination of a for-profit home health provider with a for-profit hospice.

Several points struck me:

-Gentiva will be under great pressure to make this deal work because it expects to raise $1.1 billion in NEW DEBT financing to fund the purchase price and refinance existing debt. Such financial pressure encourages management decision-making where patient enrollment trumps patient service.
-Identifying synergies (not to be confused with economies of scale) between home health and hospice has been elusive. It's probably why there haven't been such large-scale combinations to date, and why even small-scale home health/hospice collaborations (either for-profit or not-for-profit) have been few and far between. That said, Gentiva's management has had a solid track record and may be up to the task of capitalizing on these elusive synergies.
-Health care (especially home and hospice care) is local, and after the transaction is completed, the key question will be: can a home health-hospice behemoth better advance (than other organizational delivery models) the provision of palliative care to those with chronic or advanced illness? To the extent that the new Gentiva/Odyssey entity may be able to develop accountable palliative care organizations (APCOs) within the communities it serves, then it may be worth the effort.

I'm curious to learn your thoughts.

Accountable Palliative Care Organizations (APCOs)

From time to time, clients inquire if there is a single factor which keeps communities, in general, and hospital/health systems, specifically, from realizing the full potential of palliative care. Our analyses of the Dartmouth Medical Atlas suggests to us that HOW communities are ORGANIZED to deliver and distribute palliative care may be the single most important determinant of success.

Drawing a composite picture of a hospital’s (and community's) palliative care performance from palliative outcome indicators can reveal lots about performance in meeting the needs of those with advanced illness. Our study of better-performing communities identifies several attributes shared by these exemplar palliative care communities (much has been written recently about one of these Exemplars - LaCrosse, Wisconsin). These shared attributes are:
• Multiple Points of Patient Access
• Multiple Sources of Reimbursement and Mechanisms to Enable Internal Pricing and Transfers
• Chief Palliative Care Officer
• Protocols/Tools Span Settings of Care
• Relentless Collection of Data and Focus on Accumulating and Disseminating Knowledge of Best Practices.

We refer to virtual structures possessing these attributes as Accountable Palliative Care Organizations (APCOs). In coming posts, I'll offer more detail on why these attributes matter, and why APCOs are so difficult to develop. In the meantime, I'm curious to learn your thoughts, and how your assessment of current late-life care practices in your communities confirms or refutes this organizational model.

Bellwether Hospice and Palliative Medicine (HPM) Practices

If the Hospice and Palliative Medicine(HPM) specialty is in its nascence, as widely considered, then what will the practice of palliative medicine look like five years from now? The bellwether theory offers several ideas. What, or who, are bellwethers? Simply, one who, or that, serves as a leading indicator of future trends. A bellwether stock is widely believed to be an indicator of the overall market's condition. In sociology, the term is applied to a person or group of people who tend to create, influence or set trends.



What practices might be considered as bellwethers for the HPM specialty? One might start with the practices associated with Advanced Palliative Care Communities. These are communities which score highly in the DAI Community Palliative Performance Profile. The DAI Profile uses data from the Dartmouth Medical Atlas to compile a snapshot of a community based upon its performance in an array of patient palliative care preferences. Grand Junction, Colorado and LaCrosse, Wisconsin are two Exemplar communities. A recent post on this blog had an interview with the HPM practice chief in Grand Junction.



Another bellwether is the HPM group practice which has attained “critical mass” of palliative medicine intellectual capital. What is it about these practices that makes bellwethers of them? We find that their "mass of intellectual capital" enables the "spread of science" and positions them well to take on roles as chief palliative officers of the Accountable Palliative Care Organizations (APCOs) within their service area. APCOs are virtual networks of providers whose collaboration around palliative services likely leads to higher levels of patient/family satisfaction and more efficient use of acute hospital beds. The chief palliative care officers are the integrators of these networks.



Others contend that bellwether practices are generally found in bellwether states (Florida leaps immediately to mind). Why? Because late-life care organizations (hospices, typically) in these bellwether states make greater use of HPM physicians. As illustration, Medicare data from Healthcare Market Resources reveals that Florida hospices generate revenue from physician services nearly three times that of the national average. Finally, the practices, small or large, which stand out by virtue of their chiefs. Some argue that such practices, dependent upon a single individual, have an unstable foundation and thus would not "qualify" as a bellwether because their best practices are not institutionalized.



Others counter that Accountable Palliative Care Organizations, and Communities, are often the lengthened shadow of their leaders. We’re uncertain to which view we lean. Yet, one is hard-pressed to deny the influence of these pioneers. So, until we learn that the exercise is fruitless, we’ll continue to look at these "pioneering" practices as bellwethers.



I invite your professional experiences and insights, as we explore in upcoming posts the future practice of Hospice and Palliative Medicine, as seen through the eyes of the bellwether theory.

Future Growth Prospects for HPM Physicians - Where Will They Be?

When I describe to health care colleagues outside the hospice and palliative care field the nature of my work (developing medical staffs of palliative medicine physicians) the usual response is something along the lines of : That must be a high-growth field". At first, it was easy to agree. I'm unsure now.


Why?


One, industry data suggests that hospice utilization may be approaching its zenith. In the ten states with highest hospice penetration (% of deaths served by hospice), utilization has dropped in recent years in seven of the ten.


Two, while the number of people availing themselves of the hospice benefit has grown annually by 2.3% from 2001-2008, the number of hospices has grown nearly 5% annually, or a rate more than twice that of the growth of patients using the hospice benefit (2010 MedPac Report). If one believes that small equals proficiency, then surely this is the golden era of hospice care. 50 % of hospices ADMIT fewer than two patients per week.


Three, hospital-based palliative care programs, another significant employer of HPM physicians,
may be experiencing growth in terms of new programs, but hospital-based programs are finding "same-store" growth slowing.


There's no disputing that hospices of today's median size are not as likely as hospices with an average daily census of 100 or more to deploy the services and expertise of a full-time HPM physician. Industry observers have been asserting for the past decade (and perhaps longer) that hospices will be consolidating. Meanwhile, there are few signs that such consolidation is indeed occurring. In fact, the biggest transaction in 2010 has been the acquisition of a national for-profit hospice chain by a HOME HEALTH giant. Who's to say if such a transaction will lead to hospices combining their operations with like-minded organizations, thus spurring the oft-cited predictions of consolidation.


Are home health-hospice combinations a positive development? Certainly could be, depending upon where one sits. And how will HPM physicians fare under such combinations? I'm curious to learn your thoughts.

Leadership Competencies in Exemplar Late-life Communities

What competencies are common among the leaders in exemplar palliative care communities, I'm asked from time to time. At the risk of oversimplifying, I'll suggest three

These community leaders, whether professional managers, physicians, or nurses, are particularly skilled at envisioning, energizing, and stimulating a change process that coalesces communities, patients, and professionals around new models of late-life care. These leaders have an uncanny ability to align their own priorities with those of the organization and the needs and values of the community. Call this a transformation competency.

These leaders display the ability to use metrics and evidence-based techniques to hold stakeholders to high standards of performance, using force of personality rather than the power of one's position. These leaders also understand the formal and informal decision-making structures around late-life care. In other words, they are adept at execution, translating vision and strategy into optimal organizational AND community performance.

And, these leaders are competent at building and sustaining relationships that evolve into networks, and take a personal interest in coaching and mentoring others. Put another way, these leaders possess exceptional people skills.

What competencies have I overlooked? I'd like to hear from this blog's readers.

Palliative Care Grand Rounds- June 2010

Have a look here for this month's round-up of the highlights from the palliative care blogosphere, hosted by Julie Rosen at the blog Bedside Manners.