For Klingensmith HealthCare, the important factor in a patient's hospital-home equation is the DASH in between.
The Ford City, Pa.-based company is in the process of reinventing itself — and that DASH is a vital component. DASH stands for Discharge + Assessment & Summary @ Home, a program Klingensmith began in 2009 as a means of remaining viable in an increasingly difficult environment for home medical equipment providers.
"We no longer define ourselves as a [durable medical equipment company]," says Dan Easley, senior vice president of sales. "We are this chronic disease management company. We are well planted in the home. What we have to do is a better job of defining what we can do in the home. With all these chronic disease management patients coming down the pike here, you've got to rely on what you can do in the home."
In a perilous HME world fraught with tsunami-sized changes such as competitive bidding and threats such as audits and constant cuts in reimbursement, it is important for HME companies to be forward-thinking, says Klingensmith's Kim Wiles, BS, RRT, vice president of respiratory services.
"As a DME company, you are forced to look outside the box, to look at health care reform and position yourself to [adjust to] how that is going to look in the future," she explains.
How that future looked to Klingensmith was not like a traditional HME company.
"In the DME world, we are always worried about how we can get it there cheaper and faster," Wiles says. "But there are other payers out there who are looking for more than that. We really need to look at how we can bring value to them.
"The future of home care is beyond DME," she adds. "As an industry, we really need to look outside that box. Going down the road, it is really chronic disease management."
Taking a Breath
Klingensmith started out on this road two years ago. It wasn't an unusual path — with 150 employees and six locations serving the western portion of Pennsylvania as well as northern West Virginia and eastern Ohio, the company has made a name for itself through its endeavors.
Since its beginning as a pharmacy in the 1940s, the company has constantly reinvented itself. For 30 years, it has been a traditional full-service HME company, adding and subtracting equipment and services as needed. Both Wiles and Easley, founder of Inspired Technologies and developer of a conserving device, were initially brought on board to enhance the company's respiratory services sector.
Respiratory services has since become one of the provider's key strengths. So it was natural, with competitive bidding looming along with further cuts to oxygen, that Klingensmith would take at look at that area. It quickly became clear that most of the company's respiratory patients had chronic obstructive pulmonary disease, a condition that often resulted in repeated hospitalizations.
"What we realized is that we had this huge intersection between the dozen [respiratory therapists] working under Kim and holistic management of the patients," says Easley. "We had to get away from just understanding how to deliver oxygen to determining how that patient uses oxygen and how to manage the disease."
In other words, Klingensmith RTs and technicians were on the front lines. They were in the homes of the patients, while hospitals and physicians were not, and they, more than anyone else, could help assess a patient's risk factors and medical status.
"What you really want to understand," Easley says, "is what types of services you can wrap around that patient as a value-added approach that gets way beyond providing equipment. How can we better take care of the people in the home so they can better manage their disease?"
"We thought about aligning ourselves with the patient," Wiles adds. "Then you have a whole different perspective on the value you drive and what your business definition is. The patient is the center. It drives everything you do."
So Wiles, Easley and their team set out to explore possibilities for a continuum of care that would boost the patient's quality of life, expand Klingensmith's reach and aid payers. They quickly realized they needed a way to measure patient progress and outcomes.
"You can only imagine how many studies we looked at," says Wiles.
"The first year we were looking at what was working in England, what was working in Italy, what was working in the U.S.," says Easley. "There was no silver bullet out there."
So, they wrote their own software with 100 different question sets to assess patients.
"The respiratory therapist goes in and it is not, 'Do you understand how to use your equipment,'" Wiles says. "We ask, 'What do you want to be able to do at the end of 30 days?' [The answers] are something like, 'I want to go to the movies with my grandchildren' or 'I want to go shopping.'"
While the assessment also includes clinical goals and risk factors, the patient goals are vital.
"If you didn't have patient buy-in, your results were flat in the water," Easley says, adding that typically, patient care is a lot about negative reinforcement and how the patient is failing to perform to standard.
"We wanted to get away from that equipment orientation," Wiles says. "Now, we are all striving to meet that goal with the patient — the hospital, the RT, the company. It's patient-centered versus equipment-centered.
"It is," she adds, "beyond a postcard and a phone call."
The rubber hit the road in December 2009, when DASH was finally launched.
"We did three different visits [to each COPD patient] in the first 30 days," Easley says. Those visits by a technician and a respiratory therapist were supplemented by telephone calls from a patient care coordinator to the patient. "In total, there were 18 contacts in those first 30 days," he says.
As intense — and costly — as that attention appears to be, it was critical, Easley and Wiles contend, because Klingensmith personnel were able to identify and help ameliorate risk factors, as well as work with the patients to improve their performance.
The result: Hospital readmissions dropped dramatically. Of 400 patients in the DASH program since its implementation, the re-hospitalization rate has dropped by 75 percent, Easley says, from 24 to 26 percent to 4 percent.
Those are serious numbers that could garner a hospital's attention. Tucked away in the legalese of the Patient and Protection Affordable Care Act is a provision that, effective in October 2012, Medicare can either reduce or withhold payments from hospitals at which patients have been readmitted within 30 days of their release.
Under that provision, a 20 to 30 percent readmission rate for COPD could cost hospitals a total of about $50 million, Easley says. If a provider can prove its services result in a much lower rate, hospitals might well seek it out.
"We are really now getting the ear of a lot of hospitals and a lot of payers because 2012 is right around the corner. It's now critical. You can no longer spin the lottery wheel and pick the preferred provider of the day because the hospital is on the hook for that readmission in 30 days."
The data has been a key selling point, Easley and Wiles say.
"Payers are all about data," Easley says, "so we made sure we had that data before we talked to them … The response has been fabulous. They don't have to do this program themselves."
For Klingensmith, the data has another value. It can pinpoint the possibility of offering new services, identify risk factors and alert the team to the impacts of missing something in patient care or not treating an issue.
"Every month we look at the data — what are the misses, what's the problem with the miss," Wiles says. "It is a program that evolves daily, and looking backward over your six months of data gives you a lot of perspective as well."
The Next Step
Klingensmith hasn't stopped at DASH. In March of this year, it took the next step in its plan to focus on chronic disease management. The company opened a spin-off, Klingensmith Critical Care, a home health agency.
Why?
"Two reasons: KCC is an existing avenue to offer home respiratory services (DASH) and be paid via the HHA benefit," says Wiles. "Secondarily, KCC offers us the opportunity to expand the impact of DASH by including clinical nursing for the other co-morbidities encountered, and the [occupational therapist/physical therapist] services allow for early pulmonary rehab activities to be begun."
There is another plus to having an HHA, she says.
"We also have the advantage of respiratory therapists being utilized in KCC, which is not a recognized profession in the eyes of [the Centers for Medicare and Medicaid Services], therefore not reimbursed. For this reason, it is rare to find an HHA employing a respiratory therapist. We feel the respiratory therapist is key in keeping the COPD patient out of the hospital. They are the experts in lung disease management, and now, with the added ability of the nurse and other professions, we are truly working as a coordinated team for the patient."
She says Klingensmith is not planning to be a "full-blown HHA," but having that inherent clinical expertise reassures the respiratory patient that the company has the ability to take care of him or her.
So how does this pay off for the provider? It is, after all, a costly program to undertake, Easley and Wiles say.
"It's multiple thousands of dollars," Easley admits. "We made the decision not to be profitable or to be barely profitable for two years to fund it."
KCC is the answer to the recoupment-of-expenses question.
"Expenses for the development of the software, hardware, additional RTs and marketing materials will be recouped through the revenues of KCC and, later, via contracts for clinical respiratory management services with payers," Wiles explains.
For example, Easley says, many Medicare Advantage plans have initiated quality improvement bonuses, so by putting together a best-practices program for COPD management, Klingensmith could enhance the MAPs' revenue and earn some bonus bucks as well.
Also, he continues, "Hospitals have shown us how to go beyond cost avoidance. It is more revenue enhancement. Any program they can look at that enhances revenue is especially attractive."
Easley says Klingensmith actually "identified the COPD market share for each hospital in western Pennsylvania, targeted the opportunities to gain COPD market share by partnering as a DASH/COPD Center of Excellence and correlated each 1 percent point gain in share as generating $1 million in revenue."
With that formula, the stunning drop in readmissions that the DASH program is recording could save one Klingensmith area hospital system $4.5 million to $6 million, and $1 million to $2 million for individual hospitals, the company estimates.
Already, Klingensmith is seeing some very positive results from DASH, Wiles and Easley say.
"We are seeing double-digit, topline growth," Easley says. "We are seeing that leveraged into profitability. We are seeing COPD patients having a net worth to us that is two-and-a-half times what it was before."
That's encouraging, because Klingensmith doesn't plan to stop with COPD.
Wiles says that the company's goal is eventually to provide disease management for congestive heart failure patients, etc. But that's down the road; first, Klingensmith wants to perfect the COPD disease management system.
"We've got our data behind us, our validation behind us and a couple of studies coming out," Easley says. "We don't really hit full stride until 2012 to 2014, when all these things you read about in health care reform come to pass. When 2012 hits, we're there."
