OUTLOOK 1997: POST-ACUTE-CARE POTENTIAL: HOPES FOR COST-QUALITY BALANCE MOVE BEYOND HOSPITAL
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January 06, 1997 12:00 AM

OUTLOOK 1997: POST-ACUTE-CARE POTENTIAL: HOPES FOR COST-QUALITY BALANCE MOVE BEYOND HOSPITAL

Charlotte Snow
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    While the pressure has been on acute-care hospitals to offer high quality at lower costs, the buck is stopping with post-acute-care providers.

    They offer all the services on the other side of the care continuum-skilled nursing, subacute care, assisted living, rehabilitation and home care.

    They also represent everyone's last chance to cut the fat out of the healthcare dollar and still keep patients healthy and satisfied.

    A lot of hopes will be riding on post-acute providers this year as payers and the government continue to search for a panacea for the nation's healthcare budget busting.

    Consolidation and diversification will continue to be the providers' key strategies.

    Both independent not-for-profit nursing homes and larger, for-profit long-term-care companies will aggressively pursue links with subacute, assisted-living and home-care providers.

    They want to make sure that they don't lose out on any of the revenues flowing from one level of care to another. Annual revenues for post-acute providers of all kinds are now running at about $145 billion.

    If a patient in a company's assisted-living facility needs rehabilitation therapy, you can bet that company wants to refer the patient to one of its own rehab providers.

    Some government officials think post-acute care may be a way out of the cost-quality balancing act. In Georgia, state officials endorsed a Medicaid reform plan that calls for a temporary freeze on opening new nursing home beds because state healthcare experts say too many people are institutionalized when they could be receiving home care at a lower cost.

    Consumers also like the idea of having more options for care than a traditional nursing home. As the baby boomers start retiring in the next decade, their demands are expected to expand the $30 billion home-care and $15 billion rehabilitation industries by more than 15%.

    But post-acute-care providers don't operate in a vacuum.

    Acute-care hospitals will be cutting in on their action. For-profit giant Columbia/HCA Healthcare Corp. has already made aggressive moves into home care.

    Consolidation issues represent another potential pothole.

    Independent nursing homes that band together in networks may not be able to cling to their ideal of working together on managed care and purchasing contracts but maintaining their autonomy in other areas.

    Likewise, larger companies that have formed networks through mergers and acquisitions will now have to iron out the wrinkles related to melding different work cultures and information systems.

    Much-anticipated reimbursement changes could hit the fan in 1997 and create other worries. A proposal for a Medicare prospective payment system for post-acute providers has bounced around for years, and companies are being advised to step up their preparation efforts.

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