ACOs, bundled payments, readmissions - oh my!
Accountable care organizations, bundled payments, the hospital readmission reduction program, site neutral payments...the list can go on! Skilled nursing facilities (SNFs) are facing a perfect storm of regulatory changes that demand they provide a higher quality of care at a lower cost. Seemingly all at once, providers across the care continuum are working to align themselves with hospitals. How might these forces impact opportunities in local markets?
While hospitals are still essential in this strategic puzzle, the performance of providers in other post-acute settings becomes all the more important. Home health agencies, inpatient rehabilitation facilities and long-term acute care facilities are all active participants in this high-stakes game. Finding the right partners is possible but requires a thorough understanding of the following:
- Hospitals' pain points
- Relative strengths and weaknesses of the market's post-acute providers
- Relative strengths and weaknesses of one's rehabilitation program and care options
- Tastes and preferences of the market's current and future seniors
This generates a slew of questions when applied to specific markets and specific opportunities. Here are just a few considerations when evaluating a new market, repositioning an existing SNF or relocating an existing SNF:
- Are hospitals penalized for excessive readmissions?
- Is there an ACO or hospital system in the market?
- What providers receive substantive discharges from the market's hospitals?
- Are top providers sources of readmissions to the market's hospitals?
- Why are patients hospitalized in this market?
- Does one's current rehabilitation program meet the needs of the market's hospitals and patients as well as fit the demographics and lifestyles of the market's current and future seniors?
Moreover, SNFs that have an assisted living component or are part of continuing care retirement communities (CCRCs) have other considerations. There may be opportunities to use top home health agencies as partners in their lower acuity residential care settings. This has to be measured against the option of using the SNF's rehabilitation or therapy gym as options as well.
At heart, it's about understanding the forces within your local marketplace. Here we rest on the wisdom of the ancient Greeks: “Know thyself.” Not all markets are equal, and providers have strengths in different areas. Success requires fitting one's relative strengths to the needs of the market.
Dan Lindberg is an analyst with Direct Supply Aptura and has a Master of Science in Applied Economics.