Why you should be focusing on post-acute care

New (and old) financial incentives warrant a cross-continuum approach

Numerous financial incentives exist that promote the close coordination between acute care health systems and post-acute care. We outline the six most impactful of these incentives, their specific impacts and how these incentives warrant a cross-continuum approach.

To learn more about each of these incentives, download our complimentary guide The Rationale for a Post-Acute Network, Part One: Why focus on post-acute care?

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Blog Post: The 3 post-acute care partnership structures that promote long-term collaboration

Acute care health systems’ interest in post-acute care partnerships has surged since the Affordable Care Act, and with strong rationale. Post-acute care (PAC) has always played a critical role in health care, providing the rehabilitation and long-term care services necessary to return patients to health. But the divide between hospitals and PAC providers, created by fee-for-service payment, has led to a system where post-acute providers hold vendor-like referral relationships with hospitals rather than relationships that maximize potential for care coordination.

Furthermore, acute care administrators have historically lacked significant financial rationale for stronger PAC relationships. Under fee-for-service, preventing readmissions requires administrators to cannibalize hospital volumes, and hiring care coordination staff adds to hospital overhead without generating additional revenue.

The Affordable Care Act has, however, increased the incentives for acute care systems to work closely with post-acute providers. Incentives to reduce hospital length of stay combined with an overall commitment to improvement patient outcomes generated basic alignment with post-acute providers, but readmission penalties, value-based purchasing, and risk-based payment models such as bundled payments and Accountable Care Organizations (ACOs) have raised the importance of post-acute alignment.

Specifically, the following are notable financial incentives for hospitals to align with post-acute providers:

  1. DRG-Based Hospital Payments
  2. Readmission Penalties
  3. Mortality Penalties
  4. Federal Meaningful Use Requirements
  5. Patient Satisfaction
  6. Cost Accountability Programs

Download our guide The Rationale for a Post-Acute Network, Part One: Why focus on post-acute care? to learn more about each of these incentives.


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