Hospitals create preferred networks for post-acute care

Cleveland Clinic, Catholic Health Initiatives among systems creating networks

More health systems are creating health networks of skilled-nursing facilities (SNFs) and post-acute care providers based on quality and outcomes data—and many are finding that these networks lead to reduced readmission rates and shorter lengths of stay, Melanie Evans writes in Modern Healthcare.

About 20% of Medicare beneficiaries who are discharged from hospitals go to SNFs to receive post-acute care. Hospitals that are creating networks will now have more influence over where those patients go to receive this care and what happens during their stay.

Patients discharged from nursing homes often return to the hospital

Creating preferred networks

In 2014, Banner Health officials examined operational, quality of care, and cultural information from nearly 100 SNFs in order to limit recommended discharge facilities for patients. Of the more than 90 applications the system received for inclusion into the group, just 34 made the cut.  

As part of the network, the preferred SNFs agreed to work with Banner to provide high-quality care, including working with patients to prevent readmissions and avoid long-term stays, in return for increased referrals.

Why the country's biggest post-acute care provider is partnering with hospitals

Other systems—including Catholic Health Initiatives (CHI), Cleveland Clinic, and Partners Healthcare—have followed suit, and many are requiring facilities to submit applications to become a part of their networks. The applications include a review of quality and billing data, questionnaires, and interviews. According to Modern Healthcare, the systems choose about one-third of the SNF facilities in their markets.

Beth Israel Deaconess Medical Center CEO Christina Severin says, "We definitely think there is substantial opportunity to reduce cost and improve quality," and many systems that have created care networks are already seeing the benefits.

Positive results

So far, patients receiving treatment at Banner-preferred SNFs stay between five and seven days fewer than patients at non-preferred facilities. Moreover, all but one of the Banner-preferred SNFs reached their target for readmissions.


  • Atrius Health, which chose 35 SNFs out of 100 applicants, found that the average length of stay at preferred SNFs was no more than 15.8 days, compared with 22.3 for SNFs outside the network; and
  • CHI, whose network includes six SNFs in Lincoln, Nebraska, found that hospital readmissions within a month of discharge declined from 15% to 11% after the network launched.

Aimee Middleton—administrator of the Southlake Village Rehabilitation and Care Center, which is a part of the CHI network—says the preferred facilities have seen an increase in patient volume and clinicians are more aware of the services offered at SNFs. Tamara Cull, CHI's national director for value-based payment, says the advantages are reciprocal. "We've learned just as much from them as they have from us."

But for SNFs that do not make the cut, the negative financial consequences can be significant and lead to lower patient volumes. "For many providers, it could be life or death," says James Michel, director of Medicare research and reimbursement for the American Health Care Association.  As a result, some providers have appealed the networks' decisions (Evans, Modern Healthcare, 5/9 [subscription required]).

The takeaway: An increasing number of hospitals and health systems are partnering with skilled-nursing facilities to create preferred networks for post-acute care.

How progressive health systems build high-ROI post-acute networks

Health systems are increasingly building narrowed networks of preferred post-acute partners, yet rarely see the expected results. These networks commonly lack the capabilities to care for all of a system's high-risk patients, have only nominal structure to drive performance improvement initiatives, or go unused due to the system's inability to drive volumes to these partners.

The Post-Acute Care Collaborative's webconference on Thursday, April 28, 2016, will provide a formula to maximize returns on PAC network investment. By attending, you'll learn common barriers to success for PAC networks and how to overcome them, characteristics of optimal post-acute network partners, and strategies to drive in-network utilization of preferred PAC partners.

Register now

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