Clock is Ticking on Providers to Claim ‘Post-Acute Spoils’

In the race to create coordinated care networks, hospitals and health systems have been accused of failing to pick up the pace, opening the door for proactive post-acute providers to control their own destinies.

“From a historical point of view, I don’t think post-acute care has been an area of focus [for health systems],” Wyatt Ritchie, a managing director at health care-focused investment banking firm Cain Brothers, tells Senior Housing News. “It’s still an area of mystery for many health systems.” 

There’s a question as to whether health systems will cede their claim in shaping post-acute care delivery, Ritchie wrote in a recently published Cain Brothers’ Comments article, co-authored by Cain Brothers Managing Director Bill Pomeranz and 4sight Health CEO David W. Johnson.

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Savvy post-acute care companies are redesigning post-acute care delivery to emphasize better transitions, outcomes and coordination, the authors wrote. And, with health systems and hospitals seemingly failing to step up to the plate, there’s an opportunity for post-acute providers to “stake their claim” when it comes to post-acute care services coordination, Ritchie explains.

Still, there’s the threat of intermediaries, like NaviHealth, swooping in and “claiming the spoils,” Ritchie says. Brentwood, Tennessee-based NaviHealth collaborates with health plans to guide patients from acute care settings to the most appropriate levels of follow-up care—for example, rehabilitation in skilled nursing facilities, assisted living communities or back home.

This has historically been a problem for the post-acute industry, according to Mainstreet Health Senior Vice President Gary Smith.

“In the past, we didn’t act quickly enough as an industry, so intermediaries swooped in,” Smith tells SHN.

Mainstreet Health is the operating division of Carmel, Indiana-based investment company Mainstreet Inc. Mainstreet Health has three projects currently under construction in Arizona and Texas, and six additional projects in those states, plus one in Pennsylvania, scheduled to begin construction later this year. All projects are expected to open sometime in 2017.

All things considered, post-acute providers should determine how to position themselves for success before it’s too late, Ritchie says. But not everyone will succeed.

“I think you’re going to see post-acute providers that do really really well, and there will be some that will be left out,” Ritchie says.

At Mainstreet Health, the plan is to take full advantage of that by appealing first and foremost to hospitals’ desires. And it appears to be working.

A ‘seat at the table’

“Post-acute care, as an industry, has finally gotten a seat at the table with hospitals and health systems,” Smith says. Mainstreet Health’s approach, which it has refined from Mainstreet’s development approach, involves truly listening to their prospective partner’s wants and needs. 

“We approach our partners in a way that’s about creating a partnership that serves their particular needs,” Smith says. “One of the things that we try to do in the first or second meeting [with a hospital or health system] is listen to their issues, listen to their vision, and then position our strategies and our tactics around actions we think we can take that fit their vision.”

This approach ultimately means Mainstreet Health must remain flexible. 

“We aim to be adaptable and flexible market by market, partner by partner,” Smith says, likening these meetings with hospitals and health systems to sales pitches. 

Along the way, Mainstreet has encountered some proactive hospitals, but more often than not, the health systems it attempts to woo drag their feet.

“Hospitals and health systems are notorious for their lack of rapid decision making,” Smith says. “It is extremely difficult and challenging to work your way through the layers of management.”

While this tends to be the case across the board, Smith says, Mainstreet Health has an advantage over other post-acute care providers in that it is a private company with a CEO, Zeke Turner, who makes decisions fairly quickly, and it does not have a board it must run decisions by before they’re made.

Mainstreet Health, at present, is focusing on securing partnerships with hospitals to become their post-acute provider of choice, Smith explains. 

When it comes to what hospitals are looking for in a post-acute partner, it’s helpful to have a full continuum that offers home-based post-acute care, Ritchie advises.

“You’ve also got to be aggressive in going after and participating in the bundled payment programs,” he says. “Invest in information technology and systems—those operators that do are going to get a leg up on others.” 

Written by Mary Kate Nelson

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