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March 25, 2021

How Covid-19 affected hospital and post-acute partnerships

Daily Briefing

By Monica WestheadAliki Karnavas

    By Aliki Karnavas, senior analyst, and Monica Westhead, managing director

    In the fall of 2020, we surveyed health systems and post-acute providers to find out what Covid-19 had changed about their partnerships. Here are the surprising results of that survey—and the key implications for your partnerships.

    Getting the most out of hospital post acute partnership

    The way hospitals evaluate post-acute partners has not changed.

    We asked seven health systems if the Covid-19 pandemic has altered the way they evaluate post-acute partners. They all said no. Additionally, when asked to rank the top factors hospitals consider in evaluating post-acute partners, Covid-19 performance came in fourth, behind readmission rates, average length of stay, and in-setting quality outcomes.

    This might seem counterintuitive. But skilled nursing facility (SNF) Covid-19 performance is closely associated with factors such as community spread and facility size—factors that providers don't control themselves. As such, traditional quality metrics are still the most accurate way to measure post-acute performance.

    The goals of partnership initiatives are mostly the same.

    Overall, 83% of the health systems we asked said the goals for their partnership had not changed as a result of the Covid-19 pandemic. The one health system that did change its goals focused partnership more on bed availability during the peaks of the pandemic. When post-acute providers were asked this same question, they also indicated their goals were mostly the same, with slightly more focus on episodic efficiency than in previous years.

    These small changes make sense given that the capacity crunches hospitals experienced during the peaks of the pandemic made capacity management, throughput, and episodic efficiency top priorities for health systems.

    Why has Covid-19 changed so much about health care, but not hospital/post-acute partnership?

    The factors hospitals were already using to indicate high-performing post-acute providers have remained relevant during the pandemic—providers who have low readmission rates and good quality are already set up to support hospitals' goals during the pandemic and beyond. There's no reason to change those goals.

    There's also no motivation to change. In 2020, post-acute providers indicated their biggest barrier to cross-continuum collaboration was misaligned incentives. In our 2019 survey, we asked the same question and got the same answer.

    Hospitals' and post-acute providers' fundamental payment incentives remain as they were pre-pandemic, meaning the way hospitals work with post-acute partners and why they seek out post-acute partnerships remains the same—as do the challenges these partnerships face.

    Misaligned incentives are present in both Medicare fee-for-service (FFS) and value-based care (VBC). While FFS incents post-acute providers to work with hospitals to secure referrals and improve quality, hospitals under FFS have no financial incentive to work with post-acute providers, beyond reducing readmissions for specific patient populations. Under VBC, hospitals are incented to reduce post-acute spend, while post-acute providers are not.

    These competing priorities make hospital/post-acute alignment challenging, meaning providers must be even more committed to their partnerships to make them work.

    Guidance for post-acute providers

    Post-acute providers looking to form partnerships with hospitals should redouble their focus on the same core metrics that have always been foundational for acute/post-acute relationships: clinical quality and operational efficiency.

    Getting the most out of hospital post acute partnership

    Unlock the full potential of cross-continuum collaboration


    Hospital/post-acute partnership is key to hospital success under value-based payment initiatives that extend accountability for cost and outcomes beyond any one setting. Read on to get our take on how hospitals and post-acute providers should take advantage of the full range of partnership models available, establish partnerships in which both types of providers play equal roles, and continually invest in partnership initiatives to reap the full benefits of an aligned cross-continuum strategy. 

    Read now

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