John P McHugh1, Jacqueline Zinn, Renee R Shield, Denise A Tyler, Emily A Gadbois, Sneha Soni, Vincent Mor. 1. John P. McHugh, MBA, PhD, is Assistant Professor, Department of Health Policy and Management, Mailman School of Public Health, Columbia University, New York, New York. E-mail: john.mchugh@columbia.edu. Jacqueline Zinn, PhD, is Professor, Department of Risk, Insurance and Healthcare Management, Fox School of Business, Temple University, Philadelphia, Pennsylvania. Renee R. Shield, PhD, is Clinical Professor, Department of Health Services Policy and Practice, School of Public Health, Brown University, Providence, Rhode Island. Denise A. Tyler, PhD, is Senior Research Health Policy Analyst, Aging, Disability and Long-Term Care Program, RTI International, Research Triangle Park, North Carolina. Emily A. Gadbois, PhD, is Project Director, Center for Gerontology and Healthcare Research, School of Public Health, Brown University, Providence, Rhode Island. Sneha Soni, MHA, is Graduate, Department of Health Policy and Management, Mailman School of Public Health, Columbia University, New York, New York. Vincent Mor, PhD, is Professor, Department of Health Services Policy and Practice, School of Public Health, Brown University, and Health Scientist, Providence VA Medical Center, Rhode Island.
Abstract
ISSUE/TREND: Postacute care has been identified as a primary area for cost containment. The continued shift of payment structures from volume to value has often put hospitals at the forefront of addressing postacute care cost containment. However, hospitals continue to struggle with models to manage patients in postacute care institutions, such as skilled nursing facilities or in home health agencies. Recent research has identified postacute care network development as one mechanism to improve outcomes for patients sent to postacute care providers. Many hospitals, though, have not utilized this strategy for fear of not adhering to Centers for Medicare & Medicaid Services requirements that patients are given choice when discharged to postacute care. MANAGERIAL APPROACH: A hospital's approach to postacute care integration will be dictated by environmental uncertainty and the level of embeddedness hospitals have with potential postacute care partners. Hospitals, though, must also consider how and when to extend shared savings to postacute care partners, which will be based on the complexity of the risk-sharing calculation, the ability to maintain network flexibility, and the potential benefits of preserving competition and innovation among the network members. For hospital leaders, postacute care network development should include a robust and transparent data management process, start with an embedded network that maintains network design flexibility, and include a care management approach that includes patient-level coordination. CONCLUSION: The design of care management models could benefit from elevating the role of postacute care providers in the current array of risk-based payment models, and these providers should consider developing deeper relationships with select postacute care providers to achieve cost containment.
ISSUE/TREND: Postacute care has been identified as a primary area for cost containment. The continued shift of payment structures from volume to value has often put hospitals at the forefront of addressing postacute care cost containment. However, hospitals continue to struggle with models to manage patients in postacute care institutions, such as skilled nursing facilities or in home health agencies. Recent research has identified postacute care network development as one mechanism to improve outcomes for patients sent to postacute care providers. Many hospitals, though, have not utilized this strategy for fear of not adhering to Centers for Medicare & Medicaid Services requirements that patients are given choice when discharged to postacute care. MANAGERIAL APPROACH: A hospital's approach to postacute care integration will be dictated by environmental uncertainty and the level of embeddedness hospitals have with potential postacute care partners. Hospitals, though, must also consider how and when to extend shared savings to postacute care partners, which will be based on the complexity of the risk-sharing calculation, the ability to maintain network flexibility, and the potential benefits of preserving competition and innovation among the network members. For hospital leaders, postacute care network development should include a robust and transparent data management process, start with an embedded network that maintains network design flexibility, and include a care management approach that includes patient-level coordination. CONCLUSION: The design of care management models could benefit from elevating the role of postacute care providers in the current array of risk-based payment models, and these providers should consider developing deeper relationships with select postacute care providers to achieve cost containment.
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