Post-acute providers are holding their breath in anticipation of slashed reimbursement from all sides. They'll spend most of 1996 maneuvering for position to weather likely reductions in Medicare and Medicaid payments in the following years.
The smoothest road may lie ahead of companies that have made progress in balancing the Medicare and Medicaid patients they serve with those covered by private insurance. But it'll still be bumpy, especially for smaller providers.
Look for many of those mom-and-pop companies to hear the call of the large for-profit chains. King-sized health systems are bulking up on post-acute services, with the aim of one day providing all types of care to each capitated patient. With their financial resources, these for-profit giants will be the hardest to turn away. Just as they entered regional markets one by one to gobble up hospitals, they'll be doing the same with post-acute services.
The post-acute providers that don't succumb to the Columbias and Tenets of the world still will have to form partnerships.
Companies like HealthSouth Corp. and Beverly Enterprises that started out offering one element of the so-called "continuum"-such as long-term and skilled-nursing care, home care, hospice, rehabilitation, or outpatient surgery-are adding subsidiaries that offer other kinds of care. That activity results in companies calling themselves post-acute-care providers, instead of just plain nursing home or rehabilitation enterprises.
Hospitals and health systems will boost their means of treating older and sicker patients from the time they enter the hospital through their outpatient services, and on to home care or long-term care.
Elderly patients, the biggest users of post-acute care, will continue to garner attention from managed-care companies itching to take on risk programs.
There are two other developments to watch in 1996. First, if Wall Street overreacts to Medicare and Medicaid reimbursement changes, that could especially hamper publicly traded companies. Second, government investigations into possible Medicare and Medicaid billing fraud will continue full force, particularly in home care and rehabilitation. But look for the industry to more actively self-regulate as providers step up their internal monitoring.
One thing is certain: Inpatient days will continue to fall-as much as 34% by 1999, according to the Sachs Group, an Evanston, Ill.-based healthcare information firm. State by state, outpatient revenues are beginning to surpass inpatient revenues. But any drop in inpatient days doesn't guarantee an outpatient boom; patients' use of some outpatient services also may decline.