The following content is sponsored by Community Hospital Corp.
For hospitals and health systems traditionally focused on acute care, considering a post-acute care and long-term acute care strategy may be a somewhat new concept. It has become newly important for acute-care hospitals and health systems to focus on total cost of care along the continuum because of healthcare reform's focus on population health and more accountable care.
In light of these changes, many hospitals and health systems, including Hendrick Health System in Abilene, Texas, are renewing their focus to provide the right care in the right place at the right time. "Our goal is to take care of a patient anywhere along the [care continuum]," says Brian Bessent, FACHE, assistant vice president at Hendrick Health System.
Long-term acute care in particular may be an especially new concept to many acute-care provider organizations. From 2007 through December 2012, acute-care hospitals did not have the option of considering adding a long-term acute care hospital to its campuses due to a federal moratorium limiting the creation new LTACHs and the expansion of existing LTACHs. However, since the moratorium sunset at the end of last year, acute-care hospitals and health systems can once again consider an LTACH as a viable option for their post-acute care strategy. Long-term acute care can serve as a bridge for patients caught between traditional acute care and post-acute care.
Determining market need
About 2 to 3 percent of patients in an acute-care setting would benefit from long-term acute care hospitalizations, says Leslie Boney, vice president of post-acute development at Community Hospital Corp. There are two main things hospitals should consider when pondering the possibility of an LTACH.
Surrounding market. First, hospitals should consider their surrounding market when considering an LTACH. Under current legislation, a limited number of an LTACH's patient population can come from the host hospital without a financial penalty. So, acute-care hospitals must evaluate potential referral sources for its LTACH.
"Due to Medicare's 25 percent rule, not all long-term acute care patients can come from one source," says Ms. Boney. "It may be difficult for smaller communities to fill that need." In order to seriously consider adding an LTACH, hospitals should have three to four solid referral sources in mind, according to Ms. Boney.
Patient type. "From a micro perspective, look at the needs of your hospital," says Jason Bootz, senior vice president of post-acute services for CHC. "Look at the types of patients your hospital is actively treating."
Hendrick Health System has operated an LTACH for many years, and keeps it operating because of the patient population that it serves, according to Mr. Bessent. "We're seeing sicker patients coming in the doors," he says. He also notes the system's patient population is aging and generally more likely to need longer to recover from illnesses, making the need for long-term care more likely.
Legal limitations and partnerships
Since 1993, by federal law, new LTACHs cannot operate as a distinct part within a hospital; instead, they must be governed and staffed separately from the acute-care hospital, with a hospital serving as a "host" to the LTACH. Essentially, this means acute-care hospitals that are interested in starting a new LTACH must bring in an outside partner to govern and run the LTACH as a hospital within a hospital. "It's one of the biggest barriers" to starting an LTACH, says Mr. Bootz. "Hospitals have to look externally to other sources to provide long-term acute care."
Acute-care hospitals have many options when it comes to choosing an LTACH hospital provider. Many LTACH providers are for-profit entities, but Community Hospital Corp. offers a unique, nonprofit model for LTACH development through CHC ContinueCare, the post-acute care company of CHC. CHC ContinueCare offers the host hospital a chance to participate in distributions of excess cash flow resulting from the operation of the LTACH, an offering for-profit partners don't have, according to Mr. Bootz.
Additionally, the model is unique because CHC will work with the host hospital to develop clinical platforms for the LTACH. For instance, CHC can help the acute care partner decide when a patient would benefit from long-term acute care. "In our model, we align with the acute-care strategies. In a for-profit model, they are very independent and siloed in their approach," says Mr. Bootz.
Benefits of long-term care
Though the legal limitations and restrictions placed on long-term acute care can be a bit difficult to navigate, there are several benefits that come along with having an LTACH.
Increased revenue. The LTACH will generally lease space from the acute-care host hospital — space that was previously underperforming or unused. "Usually, the space hasn't been producing revenue for the host hospital," Ms. Boney says. Therefore, the host hospital can transform part of its hospital to revenue-producing through money gained from the lease agreement. Additionally, LTACHs usually will buy ancillary services, such as lab services, CT and MRI capabilities or even housekeeping services, from the host hospital, creating a new revenue stream.
Diminished DRG revenue loss. Most diagnosis-related groups have an appropriate length of stay of about three to five days, according to Ms. Boney. Beyond that length of stay, hospitals will receive no further reimbursement from payers until a patient reaches their outlier status. However, patients who benefit from a long-term acute care stay are usually in the hospital for about 25 days. Therefore, having the ability to transition patients to the LTACH will help hospitals reduce resources necessary and the associated losses from those extended stays.
Improved patient care and outcomes. Ultimately, having the option to transition a patient to the appropriate level of care will improve that patient's health. "It gives patients a chance to heal before they move to the next level of care," Ms. Boney says. Further, being able to easily place patients in the right care setting can decrease readmission rates.
Evaluating LTACH strategy
For hospitals that already have a long-term acute care strategy, Mr. Bootz says it is still important to evaluate that strategy on a regular basis. "Even when an acute-care hospital has an LTACH strategy, [leaders] should evaluate if the LTACH strategy is the right one," he says.
The following are four areas that could signal it may be time to change LTACH strategy or partner.
LTACH quality of care. The quality of care provided by the LTACH partner should be up to the standard of care provided at the host acute-care hospital. If it slips below that level, Mr. Bootz urges the acute-care hospital to rethink the partnership. If the care provided at the LTACH is sub-standard, that reflects poorly on the host hospital. "Acute-care hospitals forget that it's not isolated. The hospital-within-a-hospital's reputation is really tied to the acute-care hospital's reputation," he says.
Willingness to change. A great LTACH operating partner will be willing to grow and modify the partnership and long-term acute care strategy, while other partners will push to stay at status quo. "As the acute-care hospital's strategy changes, so should the LTACH's strategy," Mr. Bootz says. For instance, if an acute-care hospital is moving toward providing more trauma care, the LTACH should gear up to assist in that effort.
Contract value. All contracts associated with the LTACH partner should be at fair market value, such as service outsourcing contracts and lease payments. If they're not, that should trigger a contract renegotiation, according to Mr. Bootz.
General LTACH knowledge. Good LTACH operator partners will have vast knowledge of the changing laws which govern long-term acute care. Hendrick Health System partners with CHC for LTACH consulting, which Mr. Bessent says has been invaluable. "They work with LTACHs across the country, they know the industry," he says. The laws governing LTACHs can be difficult to navigate and are subject to change, so an LTACH partner with this knowledge is especially important.
Overall, if an acute-care hospital has determined an LTACH would meet its market and community’s needs, it can be a great investment for both the acute care hospital's balance sheet and its patient population's outcomes. Having a long-term acute care strategy can also help hospitals shift to accountable care with ease.