The U.S. post-acute care (PAC) market is growing at 4% and is expected to be $470B in value by 2026, spanning across various post-acute settings. These include home health and hospice centers, skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and long-term acute care hospitals (LTACs). Though SNFs continue to dominate the market, home health is one of the fastest growing segments—driven by the growing geriatric population.
PAC services are delivered after the patient is treated at a health system, which means that PAC providers rely heavily on referrals to place patients. However, recent trends impacting the health systems, such as the digitization of discharge planning, the IMPACT act, value, risk- based payment models, and the COVID-19 crisis, are requiring PAC providers to re-imagine their inbound patient journeys.
Going forward, PAC providers will need to “meet the customers where they’re at” and provide a path of least resistance in order to grow their market share. This entails unpacking customer’s challenges as well as the technology landscape in which PAC provider’s customer operate. Then PAC providers need to work back and enable their internal processes and infrastructure to be nimble and agile.
The health system mindset
Health systems are optimizing for length of stay to improve utilization and lower cost. To that end, case managers start thinking about transitioning patient care, post discharge, as soon as a patient is admitted. In fact, quick PAC placement decisions are key in minimizing added hospital days.Patient satisfaction (HCAHPS scores) is another key metric that health systems track—case managers are constantly trying to improve patient experience by personalizing PAC options and providing a seamless care transition.
For example, case managers and discharge planners often juggle multiple activities to enable an easy transition of care, such as anticipating post-acute care needs early on, arranging for social determinants of care, orchestrating multiple level of care, and/or waiting for lab results and patients to stabilize before discharge. The last thing they want are PAC providers who are not responsive or act as a “black box” behind the referral decision-making process. When that’s the case, the result is a reset of a majority of the transition of care processes.
There are several other factors that are influencing how transition of care is handled by health systems. These key factors include:
- The IMPACT Act. Established by the Centers for Medicare & Medicaid Services, these rules mandate health systems to inform patients of choices, and share quality and resource measures that are used as part of the discharge planning process. The aim is to ultimately increase transparency, patient empowerment and the quality of care.
- Risk-based payment models. Health systems are using quantitative and qualitative data to manage their network of PAC providers on costs of episode, Medicare Star ratings, care delivery quality, and more. This places an administrative burden on the PAC providers to be part of the strategic referral network.
- COVID-19 crisis and virtual liaison. Amajority of the health systems shut down access for non-frontline visitors during the pandemic. As a result, PAC liaisons and support staff who worked on site to facilitate seamless discharge started providing services virtually. This trend, in addition to other acceleration of changes in healthcare, is here to stay for the foreseeable future.
- Digitization of discharge planning and integrated care coordination. While the degree of technology sophistication varies by organization, several health systems have started investing in technologies that enable patient choice right from the bed side. They also allow health systems to send referral packets to multiple PAC providers based on patient preference and insurance coverage. These tools act like a marketplace for PAC providers, enabling them to bid for services.
The solution landscape
We conducted a study to understand the landscape of solutions available to help case managers with the discharge planning and integrated care coordination process, with an emphasis on first-time referrals. Four key segments emerged:
- No liaison, no tool. This group refers to case managers who are not using any care coordination technology today. Instead, they may be searching through brochures or looking online, making phone calls, faxing, etc. They’re not using any liaison services provided by PAC providers.
- No liaison, EMR e-referral users. In this segment, case managers primarily use the built-in EMR e-referral functionality to manage patient PAC placement. Again, there’s no liaison services.
- No liaison, integrated care coordination tool users. There are case managers who leverage an integrated care coordination tool for patient placement, and don’t utilize liaison services.
- Liaison service users, technology agnostic. Finally, this group includes case managers who work with a designated liaison provided by PAC providers to handle placement processes.
It's been reported a case managers’ challenge is the lowest if they have a designated liaison on the PAC provider side who reduces their burden and takes ownership of the patient placement process. The experience is enhanced by guaranteed turnaround times and a reduced need for follow-up document transfer and communication. This is especially true if the PAC providers have worked with health systems to grant liaisons direct access to EMR systems.
For case managers who don’t have access to liaisons, their challenge with discharge planning decreases as technology enablement increases. Common challenges that still cut across all segments include:
- No real-time status updates or communication. There is currently no established process like a Domino’s pizza tracker that gives case managers the ability to track placements in real-time. Even with a care coordination tool, the experience is the same when PAC providers don’t proactively update the statuses of the requests through the platform.
- A lack of upfront information about PAC facilities. Access to information such as bed availability, insurance coverage, and facility demographics and capabilities can save case managers time and avoid reworks when they find out a certain facility is not eligible later.
- EMR interoperability with external systems. Printing and faxing patient information is a tedious process. Some of the work is alleviated via the integration between care coordination tools and EMR systems for the initial referral packet. However, there is room for improvement in the follow-up process—building a “pull” instead of “push” process where PAC providers can extract additional patient information without communicating back and forth with case managers.
A growing and fragmented market
The care coordination solution market is crowded and expanding. Many of the solutions are moving toward holistic care planning and value-based care, which includes population health and patient engagement. Existing players serve about 50% to 60% of the health systems in the U.S. and continue to grow their footprints. Health system customers are their main revenue source although alternate business models exist. These vendors are typically laser focused on meeting discharge planners’ needs.
Technology vendors play in one of four segments:
- EMR systems are unlikely to expand into care coordination and disrupt the market. Rather they’ll likely continue to serve as the patient information database and system of record that connects with care coordination tools. Some EMR versions offer e-referral capability with a barebone PAC provider database of fax numbers manually maintained by the health systems.
- Care coordination suites include discharge assessment, risk management, PAC guide, placement, and end-to-end care transition. Example vendors include Allscripts (Careport), Ensocare, Morcare, etc. Allscripts, with the largest install base, is expected to emerge as a leading player if the market starts to consolidate.
- Conveners provide technology suites as well as clinical support services across patients’ post-acute care needs, both on-site and remote. Vendors such as NaviHealth and CareCentrix excel in value-based models and bundle payment arrangements.
- Placement solutions focus solely on patient choice and the PAC patient placement process. Example vendors include Repisodic, SilverVue, and Aidin. This is a small segment today, but the IMPACT Act will likely drive further adoption of such tools for health systems to comply with patient choice regulation.
The impact on PACs
Although fast growing, no care coordination market solution will dominate the market in the next three to five years. The best channel to grow referrals will depend on the size, segment, and geographic footprint of PAC providers. Small, regional PAC players may only need to focus on a single channel, while multi-regional PAC providers will likely operate in a blended environment of multiple referral channels. These include:
- Various care coordination solutions. The adoption of such solutions is a health system decision that is hard for a single PAC provider to influence. PAC providers will need to “meet the customers where they’re at” and subscribe to multiple platforms if needed to receive referrals. One important factor to consider is tiered subscription models that would influence rankings in searches. Subscription also entails active participation in the marketplace and provides updated information at regular pre-defined intervals on status including insurance verification, clinical documentation and resource/facility availability.
- Liaisons where high-touch service investment has been made or makes sense to make given high patient volume and competitive environment. Although highly preferred by the case managers and most likely to secure referrals, liaison channels were costly and hard to scale before COVID. However, COVID has helped discharge planners and PAC providers realize that liaisons no longer need to be on-site to be effective, which can potentially improve utilization of these resources in the future.
- Standalone referral systems offered by PAC providers. PAC providers can choose to offer health systems that no technology today with a standalone referral solution. Since case managers prefer one platform to manage all PAC referrals, the solution can only generate incremental referrals in the short interim until a comprehensive care coordination solution is adopted by the health system.
Manual and disjointed internal processes can create bottlenecks that prevent PAC providers from responding quickly. With admissions and clinical staff working across multiple channels, central referral management solutions will be pivotal to consolidating referrals and streamlining internal collaboration. A central referral management solution can serve as the “brain” that absorbs referrals, aggregates information, and connects with various internal systems on the PAC side such as the patient registration system, EMRs, and scheduling systems. Key functionalities that eliminate manual work and drive efficiency include:
- Care coordination system interoperability. This is essential because it aggregates referrals from multiple systems to be centrally managed by PAC provider admissions staff and feeds individual care coordination system with accurate, up-to-date facility information.
- EMR interoperability. This enables health system EMR systems to pull needed follow- up documentation without constantly going back to case managers to request incremental information.
- Referral workflow management. This allows for collaboration between central staff and decentralized clinical staff through one interface. It also provides real time updates and schedule availability, and tracks and analyzes conversation/ admission performance in one place.
Succeeding in a complex environment
Operating in a blended environment will continue to foster complexity for PAC providers. Given the uncertainty in the solution landscape, meeting customers where they are is the order of the day. PACs will need to invest in both their front and back office solutions to provide seamless transitions of care across the care continuum, while providing visibility to their partners on quality and outcomes.
Enhanced infrastructure, collaboration with partners on bi-directional interoperability, and referral workflow management capabilities that track placement requests and performance metrics will all be essential going forward. Such efforts will undoubtedly drive patient volume, and ultimately separate the PACs that succeed in this complex landscape from those that struggle.
Authors Craig Kane and Chris Paddison are partners and Sachin Mahishi is a principal in the Digital Transformation practice, and Linda Zuo is an associate, in the health practice of global strategy and management consulting firm, Kearney.