By Tripti Rathi and Monica Westhead

The post-acute and senior care industry has been hit hard by the Covid-19 pandemic. Providers have spent time, money, and commitment doing all they can to make their environments safer for their staff, patients, and residents in a time of uncertainty. At this point, several months into the world’s “new abnormal,” it’s time to turn our focus to the post-acute and senior care businesses themselves.

As a part of the June Session of the 2020 Post-Acute Care Collaborative Virtual Meeting Series, we polled 164 hospital and post-acute leaders from across the country to learn more about the present state of the industry, how organizations have adapted to the first few months of the pandemic, and ongoing concerns with managing through the Covid-19 crisis.

Here’s what we found:

1. Nearly 60% of surveyed post-acute providers report more than 10% decline in referral volumes and recovery in this sector will likely be slow.

Covid-19 is anticipated to be financially catastrophic for many healthcare organizations as baseline costs continue to increase while patient volumes have been slower to rebound. In fact, early estimates show that hospitals have already lost $202.6 billion as a result of the epidemic. For the rest of the year, hospitals are projected to lose $20 billion per month.

For post-acute organizations, the Covid-19 epidemic has only exacerbated the financial pressures faced by many providers. Even as the cost of care delivery—providing PPE, adding staff to substitute for those in quarantine—rises, providers must continue restrict and closely monitor admissions to prevent outbreak spread for their already vulnerable patient populations. At the same time, with the rapid spread of the virus in the nursing home population, referrer trust in the safety of their post-acute partners may be shaken. Further, patients in home-and community-based settings may refuse visits and delay care due to infection spread concerns.

This is reflected in the fact that nearly 60% of surveyed organizations reported more than a 10% decline in referral volumes, with third of the organizations reporting 25% or greater decline in referrals.

Still, 38.6% of post-acute providers reported that they faced no decline or less than 10% decline in overall referral volumes during the first months of the Covid-19 epidemic. This is likely a function of two factors:

1. Hospitals have been looking to alternative care sites to secure inpatient capacity.
   As many hospitals prepared their facilities for expected surges, many looked to post-acute organizations to accept patient volumes, even in areas that didn’t see an initial surge in Covid-19 cases.
2. Medically complex patients still need increased post-discharge support.
   Even as hospitals and post-acute providers restrict and monitor patient transitions to post-acute care, many medically complex patients, including those with Covid-19, cannot avoid post-acute care and require extensive rehabilitative support that post-acute providers are currently well equipped to deliver.
   
   Still, volume recovery will likely be slow as providers remain cautious in accepting new patients and patients remain reluctant to seek care in post-acute settings due to the outsized impact of the virus in post-acute and nursing home settings.
   
   For now, providers should continue to shore up infection prevention protocols and focus on delivering exceptional outcomes for the patients that walk through their doors. This will likely set the stage for future recovery.

2. Providers are attempting to shift more care to the home during Covid-19 by expanding home-based care offerings. Yet acute to post-acute discharge patterns indicate that barriers to home-based care have not eased.

Shifting more care to the home has been a long-standing industry goal and many providers see Covid-19 as the catalyst that will accelerate progress toward that goal.

Hospital and post-acute executives have expressed interest in expanding services to deliver more post-acute care in the home. Yet the options health leaders are planning on expanding don’t necessarily represent a wholesale shift of post-acute care to the home (e.g SNF-at-home models), but also include a shift towards expanding care management resources and delivering more outpatient services in the home.

And despite the goal of shifting more care to the home, Medicare data shows that transition patterns for Medicare beneficiaries with Covid-19 aren’t markedly different than typical transition patterns for non-Covid-19 diagnoses.

Even though this is only one condition, the similarity in transition patterns indicate the barriers to shifting more care to the home have not been substantially eased. In some cases, a transition home is more feasible during the pandemic due to other adults in the home being at home due to working remotely, having been laid off, or needing to stay home to provide child care. However, these conditions are not expected to be permanent.

Whether or not the industry is able to accomplish their goal of shifting more care to the home will depend on how successfully regulations and provider efforts are able to eradicate the long-standing barriers to home-and community-based care.

3. It’s too soon to determine the impact of Covid-19 on hospital/post-acute partnerships. However, hospitals indicate that post-acute providers’ quality outcomes and Covid-19 mitigation strategy will likely influence future collaborations.

Acute and post-acute partnerships have been the gold standard for the way hospitals and post-acute providers work together to achieve better outcomes. With Covid-19, the effectiveness of such partnerships has been tested as it’s become increasingly difficult for post-acute providers to assist with hospital discharge priorities. For example, hospitals still value efficient patient throughput as a means of freeing up bed capacity for potential new surges in Covid-19 cases or other emergent patients. Although post-acute providers have historically assisted with this goal, it may be counterproductive now as outbreak risks looms in facility-based settings.

It’s important to note that many hospitals have taken steps to helps their post-acute partners curb outbreaks by sharing PPE and other resourcing, providing testing support, and offering infection prevention guidance.

But larger questions remain how hospitals will attempt to reconfigure collaborative efforts with post-acute providers. Much of the support hospitals provided to post-acute providers was resource-intensive and reactive to specific outbreaks in the community, which is likely not sustainable in the long term. As providers across the continuum feel their belts tighten, hospital priorities may turn to focus inward, relying on post-acute providers to keep up the efforts with less support.

For now, hospital leaders indicate that going forward, demonstrating a successful Covid-19 mitigation strategy is expected to influence hospital-post-acute partnership development.

Beyond Covid-19: Looking to the future of post-acute and senior care

It’s clear that health systems and post-acute providers alike are focused on maintaining financial stability of the post-acute sector, expanding service offerings to meet more care needs in the home, and determining post-acute partnership strategy throughout the Covid-19 pandemic.

Current provider sentiments also raise questions around if—and how—Covid-19 will catalyze industry changes that will persist beyond the pandemic.

More specifically:

• How should post-acute providers diversify service portfolios to maintain financial viability during Covid-19 and beyond?
• How will current financial pressures influence M&A activity in the market?
• Will the anticipated increase in home-and community-based care become a reality?
• Will hospitals show more interest in developing new and innovative ownership and management structures with post-acute providers?
• Will Medicare Advantage payers take a vested interest in expanding home-and community-based services and ownership of post-discharge care?