Colorado Care Synergy Collaborative Part of a Growing Trend in Hospice

A group of nonprofit hospice, home health, and palliative care providers have formed a collaborative network to support, sustain and grow their services across Colorado. Collaborations such as these have been vital for many smaller hospices to remain competitive with larger players in the space and to maintain eligibility for value-based payment programs such as direct contracting.

Care Synergy is a cooperative enterprise of four affiliate organizations that include The Denver Hospice, Pathways Hospice and Pikes Peak Hospice and Palliative Care, along with home health provider The Colorado Visiting Nurse Association. Within the Care Synergy model, each provider continues to operate as its own distinct and independent entity. Each organization will continue their own quality, licensure and compliance operations while working together to share best practices and generate cost-sharing efficiencies in a strategic collaboration.

Care Synergy provides a shared pool of services such as accounting, payroll, revenue cycle and treasury management, information technology (IT), human resources, compliance, education, and marketing and communications. Through the consolidated operating system, each provider utilizes the same software programs and organizational tools, including electronic medical record and general ledger systems.

The combined collaborative allows the providers to not only pool their operational resources, but also grow and sustain their financial and staffing opportunities, according to Tim Bowen, CEO of Care Synergy.

“By consolidating, combining and integrating all of the back-office functions that were historically done by each individual affiliate, it has dramatically improved the cost efficiencies and economies of scale that these providers cannot achieve on their own,” Bowen told Hospice News. “When you add in the group purchasing and group contracting opportunities that scale offers, it has materially improved financial performance and cost control for each affiliate. It has allowed the affiliates to offer far more competitive salaries for staff and a wider array of benefits, far exceeding what any one affiliate was able to offer and afford on their own.”

The collaborative’s combined geographic footprint spans across Colorado Springs at the southern end of the Front Range to the Denver and Boulder metropolitan areas. Their service region extends to the Wyoming state border with an overall population base of more than 4.5 million residents. Together, the network of providers cares for more than 40% of all hospice patients in Colorado, according to Bowen.

Hospice utilization among Medicare decedents hit 53.2% in Colorado during 2018, ranking the state 13th nationwide and hovering above the national average of 50.3% that year, according to the National Hospice & Palliative Care Organization.

Seniors 65 and older make up 14.6% of Colorado’s overall population. The state’s population of seniors grew more than 29% between 2010 and 2015, according to the Colorado State Demography Office and the U.S. Census Bureau. The number of people older than 65 totaled 646,000 and accounted for 12% of Colorado’s population in 2013, according to the Colorado Department of Transportation, which projected that the state will see this number rise to 18% by 2040.

In the face of rising demand, having a combined footprint has allowed the hospice, palliative care and home health providers to gain a leg up on competition not just in scale but in buying power as well, according to Dawn Darvalics, president of Pikes Peak Hospice and Palliative Care based in Colorado Springs.

“When there’s more of us we have purchasing power with our pharmacy company, durable medical equipment company, medical suppliers and payers,” said Darvalics. “Having that larger footprint really allows us to secure agreements and contracts that we likely would not be able to do as a stand-alone hospice with much fewer employees and patients that we care for, as opposed to all four of us together. The future of non-profit, stand-alone hospices is questionable.”

Through these coalitions, providers can take advantage of cost saving opportunities by increasing their pool of financial and staffing resources. Collaboratives have been sprouting up nationwide in a trend gaining speed in hospice as smaller nonprofit organizations work to better compete with larger companies.

In January, seven hospice and senior care providers formed together in a multi-state collaborative of Advanced Illness Partners, a joint venture geared for participation in the Center for Medicare & Medicaid Innovaation’s direct contracting payment models. Five Wisconsin hospices formed the Wisconsin Hospice & Palliative Care Collaborative (WHPCC) in February to bolster payer relationships, maximizing their scale and negotiating power. The California Hospice Network (CHN) formed in 2019 as a coalition of nonprofit hospices restructuring leadership and operations to prepare for entry of hospice into value-based payment programs beginning this year such as Medicare Advantage.

With the Jan. 1 inception of the the value-based insurance design (VBID) demonstration, payers and hospice providers now have the option to participate in Medicare Advantage. The program is designed to increase access to hospice services and facilitate better coordination between patients’ end-of-life providers and other clinicians, according to the U.S. Centers for Medicare & Medicaid Services (CMS).

Emerging value-based payment models were a part of the decision to join the network, among other factors, according to Nate Lamkin, president of Pathways Hospice based in Fort Collins, Colo.

“The Medicare carve-in is something that hospices have been thinking about, planning for and talking about for years. There was a rush not just in hospice and home health, but really in all sectors of health care to scale up,” said Lamkin. “Our collective scale puts us on the radar of payers in a way that smaller, individual nonprofits wouldn’t be. Becoming part of the Care Synergy network was a sustainability question, because I don’t know how much longer individual, community-based nonprofits like us could have survived in this kind of environment without these kinds of efficiencies or cost savings.”

Sustainability and growth for smaller hospices has been a volatile journey as they navigate not only a changing payment environment, but also a global pandemic. Hospices nationwide struggled as COVID-19 pummeled operations and finances. Shortages of personal protective equipment (PPE) and staffing support plagued the health care industry at large, with smaller hospices among the hardest hit.

On their own, each affiliate would have had a major challenge to secure the necessary supply of PPE, according to Bowen, who told Hospice News that Care Synergy took on the task of securing PPE for the entire network of organizations. The collaborative leveraged its combined buying power to ensure there was never a shortage for any provider member.

The Care Synergy network supported the providers efforts to secure Provider Relief Funds made available through The CARES Act, enacted March 27, 2020, which earmarked $175 billion for health care providers to recoup revenue lost due to the pandemic.

“It was very helpful to have a group of folks really looking at those opportunities for businesses during COVID-19,” Darvalics told Hospice News. “As relief funds for businesses were released, we were becoming intimately aware of all of the guidelines and rules surrounding the use of those dollars so that we could have meaningful conversations at an accelerated rate, because we had someone in our network devoted to looking at that across the board.”