For the post-acute healthcare industry, last year was full of fear and uncertainty. After the initial (and prolonged) tumult of the Affordable Care Act and the eventual (uneasy) alliance the industry formed with it, the new Trump administration seemed poised to shake everything up again.
Well, the dust has cleared after the administration’s first year, and the picture for 2018 looks to be filled with much less uncertainty. That’s not to say that the year won’t be full of change – just that the industry can better predict what those changes will be.
“I think reducing unnecessary utilization in healthcare is going to be a key focus of the administration today and in the near future,” said Saqib Akhter, CEO of Post Acute Analytics, a company that helps health systems and providers monitor their patients in real time outside their four walls. “Healthcare represents almost 20 percent of the gross domestic product (GDP) and is growing at a rate that is greater than economic growth. That has to be curtailed. It’s absolutely critical.”
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CMS will undoubtedly focus on post acute, since variation in post-acute care services accounts for the vast majority of Medicare spending variation.
“There are four settings of care in post acute – long-term acute care hospitals (LTAC), in-patient rehab facilities (IRF), skilled nursing facilities (SNF), and home health. These are all paid via different mechanisms. Presently, there’s no way for an apples-to-apples comparison of cost and efficacy across these four settings of care,” said Akhter.
“This year and over the next few years expect to see payment models geared toward ensuring that patients have the best outcome at the right cost no matter where they are in the post-acute setting – with the end goal being site-neutral payments. This is a great opportunity for post-acute providers that have been – and are – making investments in quality, cost avoidance, and appropriate utilization of care. Those are going to be the beneficiaries of this sort of a payment model.”
Site-neutral payments mean paying the same amount for services regardless of whether a patient is treated in an LTAC, IRF, SNF, or home health. Currently, CMS employs site-neutral payments certain rehabilitation services. When this plan was announced in 2015, hospitals immediately reacted by building fewer outpatient facilities in 2016 (outpatient development has since rebounded). Could the prospect of site-neutral payments across post-acute care have a similar effect?
“We’re finding that many skilled nursing operators have put new construction on hold or have scaled back considerably because of the uncertain environment around repayment methodology. However, it’s also because the utilization of SNFs is decreasing, both in the percentage of patients that are going to skilled nursing facilities after being discharged from hospitals and total length of stay,” said Akhter.
“Also, with greater focus on higher-quality providers, the poor-quality providers are being weeded out. This is offset somewhat by the aging population of baby boomers. But, given factors that both positively and negatively impact demand, in the short term, SNF ownership by private owners will likely decrease.”
However, Akhter does not believe that SNFs will be down for long.
“You’re seeing a general shift where skilled nursing is one of the lowest cost institutional settings for care. The more types of patients they can care for, the more valuable these institutions will become. Therefore, higher-quality skilled nursing facilities and those that are investing in handling higher-acuity patients will benefit by making themselves an alternative to hospitals, LCATs, and IRFs.
“That doesn’t necessarily mean we will see greater ownership by private owners, but it is a growth opportunity for skilled nursing facilities to tap into patients that they haven’t cared for previously.”
These trends are all indicative that the move toward value-based care is continuously picking up speed. 2018 and beyond will see a continued emphasis on incentivizing value directly through payment systems, with the goal being to reduce stays, decrease readmissions, and improve patient outcomes.
“Post-acute providers that have high quality, the ability to care for higher-acuity patients, and are concerned with a patient’s the overall outcome and total cost of care are the ones that will succeed,” said Akhter.
“In order to do that, providers need to know what’s happening to their patients when they are no longer under direct control. They will need to be able to monitor patients that are going off track, so they can be corrected in real time. They will need to be able to easily identify inefficiencies in care pathways. They will need to be able to work seamlessly with all partners along the continuum of care. Those are the key areas where technology is going to play a role in ensuring providers are best positioned today and in the future.”
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