Landis: Why post-acute care is suddenly in the spotlight

Daily Briefing Q&A

The Daily Briefing's Hanna Jaquith spoke with the Post-Acute Care Collaborative's Jared Landis about the state of post-acute care (PAC) reform.

Q: In recent months, we've heard calls from two congressional committees demanding reforms across PAC settings. What are the major issues at hand?

Landis: At the highest level, there is a perception—and to some degree, an accurate one—that spending on PAC is out of control in the current environment. We've seen some major studies come out this year that have placed a spotlight on PAC from a cost perspective. [Editor's note: For more, see this Institute of Medicine report and Health Affairs study.]

So, lawmakers are currently looking into PAC to rein in spending, and part of that strategy involves appropriate utilization. There's a ton of nuance within that, but that is basically the idea: Post-acute spending is a huge cost driver, and we need to better utilize these settings to control cost growth.

Q: Utilization issues are prevalent in health care right now—from imaging to cardiovascular care. What does ensuring appropriate post-acute utilization really boil down to?

Landis: It really comes down to two issues, the first being: Are we getting patients to the right setting from the start?  There are no standard guidelines around this, so it's a huge challenge. This might mean we treat a patient in a higher-acuity, higher-cost setting such as a long-term acute care hospital (LTACH) when they could actually be treated in a lower-cost, lower-acuity skilled-nursing facility (SNF).

The other question is: Are we transitioning the patient to a lower-cost, lower-acuity setting as soon as clinically appropriate? Profit motives impede this transition in certain cases, but in others, regulations are keeping this from occurring. For example, LTACHs have to maintain an average length of stay of 25 days to be credentialed, so even if they make great functional improvement with a patient in 13 days, they can't afford to transfer that patient to a lower-cost setting, like an inpatient rehab facility (IRF).

Q: So in working to control Medicare cost growth, what elements of PAC are being targeted?

Landis: That's part of the problem. We're not sure if the issue [is] inadequate care, or post-acute providers keeping patients in higher cost settings for too long for their own financial gain? Is it driven by the acute care hospital not providing appropriate discharge instructions or not being a willing care collaborator?

There are a lot of factors here, and to my knowledge, there haven't been any good analyses that tease out what the key drivers are, or what reforms would be most impactful. I think it's fairly obvious that readmissions are the main source of post-discharge cost growth and variability, but beyond that, it's a bit murky on what needs to be done to rein in costs.

Q: To date, what types of efforts have been undertaken to bend the PAC cost curve—and have they been successful?

Landis: The first wave of value-based payment programs that addressed these post-discharge spending issues [recently] came online, with the hospital readmissions penalty program receiving the most attention. Previously, there was little incentive for acute care hospitals to proactively work with post-acute, and vice versa, beyond the simple fact that PAC providers depend on acute care for patient referrals.  

This created an almost vendor-like relationship between the two sectors.

However, now the readmissions program and provisions in the Affordable Care Act (ACA)—including bundled payments, ACOs—have ushered in programs that link payment process and outcomes metrics and reward improved quality and efficiency. 

Not to mention other strategies that promote care coordination across acute and PAC settings, such as the PACE program.

The problem is: Most of these programs do not place the onus for change directly on PAC providers unless it happens to be a PAC provider convening a bundled payment model. So these strategies address the issue, but in a very piecemeal way, creating a lot of competing incentives and involving a lot of different stakeholders in pushing toward those ultimate cost-reduction goals.

Q: How are these efforts affecting acute care hospitals?

Landis: We've seen more hospitals adopting the role of "external cost and utilization manager," intervening in the setting to ensure patients aren't bouncing back. Again, that's because under these Medicare programs, instead of directly having PAC facilities' payments tied to performance, you have the acute care hospital's payment tied to PAC performance.

As a result, PAC facilities have had to elevate their game from a quality standpoint to receive patient referrals from hospitals. And under bundled payment initiatives and ACOs, providers in PAC are increasingly being held accountable for their performance.

Q: Given their evolving roles, how has the relationship between acute care hospitals and PAC providers changed?

Landis: We're seeing more and more hospitals set up preferred provider networks. Under these partnerships, hospitals work with their PAC providers to create a set of metrics that allow for apples to apples comparisons of care provided at SNFs, for instance. The networks also create standards around data exchange, put in place collaborative improvement infrastructures, and serve as an opportunity for joint quality initiatives—such as cross-continuum care pathway development

Q: You recently blogged about how hospitals can leverage post-acute capabilities for additional benefits beyond improved care transitions. Any other advice you'd offer hospitals on this front?

Landis: Well, I’ve just committed this sin myself, but I’d recommend that hospitals recognize the difference between post-acute settings. 

An LTACH is not an IRF or a SNF, and the value of home health or hospice services is very different from the value of facility-based PAC. Understanding the nuances between different post-acute environments will really allow them to create powerful partnerships.

Q: What promise do these partnerships hold for achieving long-lasting cost reductions?

Landis: We still have a very long way to go when it comes to care transitions and post-discharge cost reduction—even for those acute care hospitals with progressive relationships with PAC partners. It takes a long time to cascade down these strategies to the operational level and really change post-discharge care. That hospitals are being more conscientious in choosing their PAC partners shows we're starting to take those initial steps.

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