For frail older adults, an inpatient hospital stay can be destabilizing, often marking the beginning of a decline in functioning. For these folks and their families, the post-hospital period is a risky, confusing, and stressful time.

Our Medicare system offers hospital patients a range of different types of “post-acute” care providers to support and rehabilitate patients as they make the journey home. The problem for patients and family caregivers is that not only are there different types of providers in nearly every market, (skilled nursing, rehab hospitals, and home health agencies), but also that there are dozens within each type; and no clear and objective way for consumers or their medical providers to determine the best options.

The comparative tools for selecting providers often lack the information that matters most to patients and their families. Further, the quality measures available to judge post-acute care provider quality and performance are severely limited – making it difficult for the hospitals and health plans to use them to help discern differences in value.

Need evidence of this? Medicare data shows that in many markets, hospitals continue to spread their discharges over dozens of different post-acute providers – reflecting the mindset that there are few distinctions among providers, that home health and skilled nursing facility care are commodity services they use to discharge patients sicker and faster. Remember the predictions at the inception of value-based care? That hospitals will narrow post-acute networks to the providers with differentiated, high quality services? Well, that hasn’t happened in any significant way.

Treating post-acute care like a commodity leads to three problems:

  1. The Medicare program overpays for this care.
  2. Our healthcare system fails our highest cost, most complex patients and their families at a particularly vulnerable time in a care episode, leading to higher overall care costs throughout the rest of their lifetime.
  3. Investment in quality is not rewarded by the market, making future investment less likely.

We cannot continue to ignore this problem as we approach the next decade. According to analysis from the Kaiser Family Foundation, the projected growth in the size of the patient population most likely to use post-acute care, the 80 year olds and up, is 17% from 2010 to 2020 but 47% from 2020 – 2030. As growth in the size of the 80+ population accelerates, our deficient system will create enormous problems for payers and families.

So what are hospitals, payers, and others to do in the absence of clear quality markers? Here are a few ideas that we have noted with positive results:

1. Build relationships with post-acute care providers. Hospitals and managed care plans are not going to find perfect post-acute care providers. But they can find organizations with whom they can develop long-lasting, productive clinical partnerships. Committing the time and attention to developing these relationships can foster a more seamless delivery experience for patients and families, and increase value over time. Here’s what doesn’t work: arbitrary rules that often lead to the exclusion of organizations that don’t meet them without further due diligence. Interview the clinical and financial leadership of post-acute care organizations in the same way you’d interview any other potential partner – look for alignment of values and the ability to build trust.

2. Employ high tech/high touch solutions for discharge decision-making. Helping patients and their families select the best option for them requires two things: reliable quality and performance information you won’t get from government tools and experienced case managers who work collaboratively with the full range of providers and payers involved in the patient care. In other words, the entire discharge planning function needs to be rethought and resourced differently. While the Medicare Payment Advisory Commission continues to present options to Congress on helping hospital discharge planners identify higher quality providers, it will be years before government tools will help. In the meantime, it will be worth the cost to develop these tools first.

3. Push for value-based contracts. In the end, payment incentives must align with performance. Post-acute care providers are mightily motivated by volume but they will really put skin in the game if they are full partners in sharing the risk and the reward for delivering value.

There are PAC providers who have made investments to innovate their care delivery models and to manage and improve care for their patients. It’s time for payers, hospitals and health systems to find and partner with these providers.

For more information on improving your post-acute care delivery, contact us at



You have Successfully Subscribed!

Share This