{"id":13767,"date":"2016-04-04T15:44:42","date_gmt":"2016-04-04T19:44:42","guid":{"rendered":"https:\/\/sage-growth.com\/?p=13767"},"modified":"2023-07-26T15:45:41","modified_gmt":"2023-07-26T19:45:41","slug":"post-acute-care-looking-inward-to-respond-to-outside-forces","status":"publish","type":"post","link":"https:\/\/sage-growth.com\/critical-thinking\/blog\/post-acute-care-looking-inward-to-respond-to-outside-forces\/","title":{"rendered":"Post-Acute Care: Looking Inward to Respond to Outside Forces"},"content":{"rendered":"

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Spending on post-acute care (PAC) has grown more rapidly than spending on any other healthcare service over the past decade. Medicare spent almost $60 billion on PAC in 2013\u2014more than double 2001 spending\u2014according to the\u00a0<\/span>Medicare Payment Advisory Commission<\/a>. This trend will only continue, as the the\u00a0<\/span>US Census Bureau<\/a>\u00a0<\/span>projects the number of people aged 65 and over will double by 2050.<\/p>\n

As the need for PAC expands and the industry shifts from fee-for-service to value-based payment, hospitals will look for PAC providers who can partner with them more proactively. A successful PAC facility will be capable of easily sharing information and reducing readmission rates, requiring up-to-date technology and processes. To succeed, PAC executives and investors should consider the following three insights:<\/p>\n

1. Shared risk is the future of PAC.
<\/strong>The PAC market is incredibly fragmented, with some of the highest geographic cost-of-care variations in the healthcare industry\u201440 percent of variation in Medicare spending stems from PAC reimbursements.<\/a>\u00a0<\/span>Many have operated as mom-and-pop facilities, with a lack of strategy around what kind of patients to accept or how long to keep them before transitioning them to another care setting. Progressive PAC leaders are beginning to shift their thinking, however\u2014whereas previously a PAC facility would simply seek to fill any bed with any patient for optimal financial performance, there is now a focus on optimum patient mix to reduce risk. The Centers for Medicare and Medicaid Services have increased involvement and visibility to this niche area of healthcare by putting accountability on hospitals for joint-replacement procedures up to 90 days after discharge. As a result, we will likely see more PAC facilities enter risk arrangements with insurers and other providers through Accountable Care Organizations (ACOs), bundled payment, and capitation.

2. Expect to be held accountable for performance.<\/strong>
ACOs are now telling PACs that if they don\u2019t implement a fully functioning EHR, PACs will not be reimbursed for patients who are re-hospitalized after being treated in a PAC facility. This demand is pressuring PAC providers to better manage and coordinate patient care. Without reimbursements, hospitals will start to refer their post-acute patients to other facilities. Information-sharing and interoperability between PAC facilities and hospitals is critical for getting these reimbursements, as well as for improving quality of care. To achieve a more integrated and patient-centered payment and care delivery system, PAC facilities will need to provide data to hospitals, ACOs, and payers that show high quality, efficiency, and customer satisfaction. The faster PACs pursue this strategy, the faster they\u2019ll ensure their long-term viability.<\/p>\n

3. Success will require significant investment in information technology.<\/strong>
Many PAC facilities are a decade behind the rest of the healthcare industry in terms of technology, with only\u00a0<\/span>about two-fifths of PAC providers having adopted EHRs<\/a>. Most of those that have made the switch to EHRs have not yet implemented continuum of care initiatives. In the past, PAC facilities only depended on hospitals for referrals, creating a relationship more similar to that of two vendors rather than a partnership to deliver a coordinated care experience. With regulatory pressure pushing providers to value-based payment systems, this transactional type of relationship is no longer relevant.<\/p>\n

There are two main things hospitals will look for when considering a PAC partner: the ability to provide high-quality care, and a willingness and ability to collaborate on care coordination. Only a few PAC providers have the size and resources to succeed as-is, while others will need to collaborate together as small operators\u2014or be acquired\u2014to survive. To stay in business, PAC facilities will need to strengthen relationships with hospitals and become preferred providers in their markets. Adopting information technology systems and taking on risk as part of a network of care, are two strategic steps PAC providers can take to ensure their future.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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