The Patient Protection and Affordable Care Act has fundamentally changed the healthcare marketplace and permanently altered the role of post-acute programs in the strategic response of health systems.
This is a challenge for many hospital systems as they have under invested in management talent and the infrastructure of their post-acute capabilities. As payment models evolve and providers become more accountable for patient’s costs, care will be driven to the lowest cost settings. A hospital’s post-acute capabilities could be an engine that drives profitability or the burden that causes missed opportunity.
This evolution is forcing health systems to respond. Those that are accepting this new environment are pursuing a clear view of the condition of their post-acute care strategy and capabilities. An integral part of a health system’s business model will be designing and implementing a post-acute strategy. This is not only fundamental, but vital for thriving in this new marketplace.
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A successful post-acute strategy creates five substantial benefits for any hospital system:
- Improve the quality of care
- Gain greater control over market share
- Sustain and ultimately increase margins
- Improve the hospital system’s overall value proposition
- Adequately position the health system for new reimbursement
methodologies
Hospital leaders must consider the following factors as they think about integrating a post-acute strategy to navigate the post-reform environment.
Care Coordination Infrastructure
In our view, we believe a true post-acute strategy requires a care coordination infrastructure separate from what occurs inside the hospital. It’s the appropriate place because they typically have an informal care coordination infrastructure already set up. Formalizing this infrastructure is a critical aspect to thriving in the post-reform era.
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Management
Your post-acute management team may be excellent post-acute care providers, but are they the leaders for the new environment? New payment structures are driving up the value of transitional care models. This requires the post-acute division to reach across and into other organizations and the post-acute management team must have the credibility to do so.
Seat at the Table
Have you given them the political clout? The key to successfully implementing and running a post-acute division is defining the management team as equal partners across the leadership spectrum of your health system.
Access to Capital
Are you willing to allocate the appropriate financing to building the care coordination infrastructure outside the hospital? In our experience it takes minimal capital to build a successful post-acute care platform, however, health systems have many priorities and post-acute care is often on the bottom of the list.
Own or Outsource
Do you really need to own the post-acute capability? In most cases we think you do, but do you need to own all of it? If not, which parts can be outsourced through selling it or joint venturing? As with the health systems core business, home health, skilled nursing facilities and other segments of post-acute care are under intense reimbursement pressure. As a stand-alone business unit, these segments must operate efficiently. If they do not it is sound business sense to find a partner to strengthen the weak link as long as they are incentivized appropriately and buy in to the overall post-acute care strategy.
