The U.S. post-acute care market is growing at 4% and is expected to be $470B in value by 2026, spanning across various post-acute settings.
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 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:
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:
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:
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:
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:
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.