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Avera St. Luke’s Hospital Reduces Post-Acute Care Costs by 40%


For a health system to succeed in today's healthcare environment, it is imperative to be proactive instead of reactive. Avera Health joined the Premier Bundled Payment Collaborative before it opted into the Bundled Payment for Care Improvement Initiative (BPCI). In anticipation of mandated bundles across the country, the health system realized that in order to be successful in a bundled payment program, they needed to learn as much as they could and carefully build the infrastructure needed to support these value-based payment models.


Avera St. Luke's Hospital began care transformation initiatives for their major joint replacement bundle in two key areas.

1. Working with a physician champion to established a strong multi-disciplinary bundled payment team and oversight structure.

2. Redeploying a nurse to develop the bundled payment nurse navigator role.

Soon after, a navigator from the employed orthopedic surgery practice assumed the role full-time, as it was discovered to be a valuable and dedicated resource for their total joint bundle. The Avera St. Luke's team, with the help of their care navigators and Premier, educated physicians on what happens in the post-acute setting and all of the costs associated with the post-acute care.

Through the Premier bundled payment analytics tool, the bundled payment team was able to show the variability in cost in the post-acute setting, as well as the length of stay in post-acute, which was more expensive and longer than the physicians ever anticipated. The entire discharge plan and process became transparent to the care providers outside of the hospital and started to drive results.


"Having the multidisciplinary team was so crucial and is often underestimated by many," said Stacey Lenker, Vice President, Payor Strategies. "Planning around the post-acute care options (physical therapy, home care, skilled nursing facilities (SNFs), etc.) has really empowered the clinical staff and generated great dialogue among the team around how to provide the best care for Avera St. Luke's patients."

Focus has now shifted to patient expectations matching provider expectations. Long-time questions are now being answered, including:

  • How long should the patient be in the hospital?
  • How long should the patient be in the SNF?
  • Do they need to go to a SNF or can they utilize home health?

Once medical providers were educated on the variability of post-acute care, patterns of referrals drastically changed at Avera St. Luke's. A transfer sheet is now part of the care process, which is filled out by the SNF and brought back to the physician, establishing a feedback loop between post-acute care and the primary care setting. Physicians at Avera St. Luke's now feel they have a better handle on the health of their patients after surgery and their results validate this belief. There has been a dramatic decrease in post-acute spend.

Avera St. Luke's found that physician engagement, accurate documentation and transparency of information have been key to their success. Premier's bundled payment team and analytics tool empowered them with the information and insights needed to engage physicians, target education and enable redesign.

Overall, the experience has helped shift the focus at Avera St. Luke's from merely operations contained within the four walls of the hospital, to a comprehensive strategy focused across the continuum of care while reducing costs, increasing patient satisfaction and improving the quality of care.

For more strategies for success in bundled payments, download Ready, Risk, Reward: Keys to Success in Bundled Payments.

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