Post-acute providers adapt to re­form

Modern Healthcare - - BY THE NUMBERS - By Michael San­dler

Post-acute-care providers are ad­just­ing their busi­ness plans to bet­ter nav­i­gate the chang­ing ter­rain cre­ated by the Af­ford­able Care Act, as re­duced pay­ment rates and con­sol­i­da­tion pres­sure their industry.

The big­gest im­pact of the ACA has come through re­duc­tions in an­nual Medi­care mar­ket­bas­ket up­dates, said Jay Grin­ney, CEO of Birm­ing­ham, Ala.based HealthSouth Corp. Sav­ings from those lower pay­ments have helped pay for the law’s im­ple­men­ta­tion.

As a re­sult, post-acute-care providers have faced mar­gin com­pres­sion—net mar­ket­bas­ket up­dates have been less than HealthSouth’s op­er­at­ing ex­pense in­creases, no­tably ex­penses for la­bor, sup­plies and drugs, Grin­ney said.

The re­ha­bil­i­ta­tion provider has eased the squeeze by in­creas­ing its vol­umes and serv­ing pa­tients more ef­fi­ciently, he said.

Industry con­sol­i­da­tion has been fa­vor­able for HealthSouth, be­cause it fa­cil­i­tates clin­i­cal col­lab­o­ra­tion among post-acute providers, he said.

The com­pany has sought to ac­quire busi­nesses com­ple­men­tary to its in­pa­tient re­ha­bil­i­ta­tion ser­vices, par­tic­u­larly home health com­pa­nies. Grin­ney said 54% of pa­tients dis­charged from HealthSouth in 2014 re­quired home health­care. That’s why the com­pany pur­chased En­com­pass Home Health and Hospice in Novem­ber 2014, and ac­quired CareSouth in Au­gust.

Re­al­iz­ing ad­di­tional growth op­por­tu­ni­ties in the re­hab hospi­tal busi­ness, HealthSouth in June ac­quired Re­liant Hospi­tal Part­ners.

David Ch­er­now, CEO of Me­chan­ics­burg, Pa.-based Se­lect Med­i­cal Corp., said greater col­lab­o­ra­tion is a pos­i­tive byprod­uct of health­care re­form.

His com­pany has worked closely with health sys­tems to cre­ate a more seam­less ex­pe­ri­ence for pa­tients across the care con­tin­uum, he said.

In March, Se­lect Med­i­cal cre­ated a joint ven­ture to ac­quire Con­cen­tra for its oc­cu­pa­tional medicine and ur­gent-care busi­ness. The com­pany also has joint ven­tures with Cedars-Si­nai, UCLA Health, Emory Health­care, Och­sner Health Sys­tem, Pin­na­cleHealth, Tri­Health and the Cleve­land Clinic.

In the past, health sys­tems did not fo­cus on post-acute care, Ch­er­now said. But now, many are ex­am­in­ing the care area closely, and re­al­iz­ing it’s bet­ter to part­ner with post-acute-care spe­cial­ists that share their vi­sion, cul­ture and val­ues, he said.

Grin­ney

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