Big Problems, Even Bigger Opportunity: What Has to be Done About Post-Acute Care

By: Tim Gordon, Founder & Managing Partner

Perhaps no sector of healthcare is more rife with challenges and opportunities than long-term, post-acute care. The common denominator that one finds when examining the post-acute care landscape is inefficiency. Everywhere you look, things are being done like it’s the 1990s. Phone-tag with patients, faxes to suppliers, manual data entry… how much time and money, and how many positive outcomes for patients are drowning in this archaic system?

Substandard treatment and inadequate monitoring lead to operational delays, which results in huge numbers of adverse and temporary-harm events for patients – the majority of them preventable – according to a March 2014 Office of Inspector General report. The reality is, too many hospitals and emergency rooms treat discharged patients like they are out of the system; an approach that contributes to a revolving door of patient readmissions every single year, which is both damaging to patient health and costly for acute-care hospitals, which remain by far the most expensive site of care, at an average of $2,882 per day.

It’s time for a change.

To manage chronic care effectively, we need to start focusing on preventative strategies, utilizing technology to intervene at precise moments, and increasing patient and caregiver engagement. Fortunately, there is a ray of hope: Just as bright, talented entrepreneurs have disrupted a range of industries by exploiting gaps and plugging holes – so too is the post-acute care industry being transformed. As with all things healthcare, it just takes a little more time. But change is coming.

Inefficiencies in the Market

The success or failure of the post-acute care model hinges on the communication and coordination of the healthcare providers involved in the patient-transfer process. Unfortunately, the current system for patient-transfer leaves a lot to be desired. A January 2018 survey of 162 hospitals by HIMSS Media uncovered numerous gaps between hospitals and post-acute providers that result in operational and clinical inefficiencies. For example, only a quarter of hospitals are partnering with post-acute providers to track patient care, and more than half have no established processes to manage post-acute providers, or are uncertain if they do. For those with processes, just 7% make use of automated discharge or referral management software. According to the survey, 25% of hospitals still communicate manually (phone calls, faxes and paper documents). This is mind-boggling.

A manual approach to patient monitoring is both inefficient and expensive. Cloud-based communications portals, telemedicine services, automated discharge or referral management software, and partnerships with preferred post-acute providers will free up nurses’ time and enable them to focus on core activities, as well as provide a consistent flow of touch-points that engenders a deeper sense of comfort in patients. This creates a smoother, more efficient transition from acute to post-acute care. Additionally, patient outcomes are improved, which leads to lower costs in the long run. So integrating technology into the operational workflow of providers is a win-win across the board.

The good news is that some integration is already taking place. Acute and post-acute care providers are finding that technology which synchronizes patient data with care plans gives case managers roughly 50% of their day back, which leads to more time spent with patients and their families, and more bespoke care packages tailored to each patient’s specific needs. Additionally, more and more hospitals are taking the time to determine which of their post-acute care providers are leveraging technology to track and improve patient outcomes. By reviewing readmissions, hospitals and referring physicians are working with post-acute care facilities to figure out what works, what doesn’t, and what can and should be handled differently. Those are the types of conversations that need to be had if our post-acute care model is to evolve beyond its current limitations.

Another positive forward-looking indicator is the willingness of older generations to adopt modern technologies into their lifestyles. Boomers have proven especially adept at doing so, which implies there will be less friction when integrating technology into the next generation’s long-term care continuum. Of course, we still have a lot to accomplish on this front for the current generation of patients – the majority of whom are over 75 and suffer from multiple chronic conditions. Advanced technologies such as biometric remote monitoring and risk-assessment analytics can help predict which patients are at a higher risk of readmission, and which need greater post-discharge oversight. But these advanced tools – which rely on wearable or digital technology – are rendered useless if the patients themselves are incapable of incorporating them into their daily routines. It’s no use having an app that can predict a patient with a chronic hip condition’s risk of falling if that patient has a barrier to utilizing the app in the first place. The solution is to educate patients about new technologies with the same dedication and zeal that goes into educating them about drugs and medical procedures.

The Change-Makers

Fortunately, there are a host of companies and startups looking to address these gaps in the post-acute market. To attack the inefficiencies currently embedded in DME, Parachute Health built a platform that allows suppliers to receive clean documentation, as opposed to illegible and often inconsistent faxes, which can delay discharges and create unnecessary data entry tasks leading to operational backlogs. Parachute’s digital platform accelerates the discharge procedure by providing patient management tools, delivery status updates, and MD signature capture all in one easy-to-use interface. And their electronic messaging service means providers don’t have to worry about back-and-forth phone interactions. The end result? Recovering patients get the DME they need, when they need it – before they end up back in the hospital. Hey, it’s the 21st century – it’s time healthcare moved away from faxes and phones and joined the digital revolution. Thankfully companies like Parachute are making that happen.

Another company doing amazing things in this space is Friend Health. We interviewed Founder and CEO Coley Parry in the Q2 installment of our newsletter. Friend Health collaborates with healthcare partners to bring in-home care to some of the most at-risk patient populations via multi-disciplinary care teams and proprietary technology. Their system saves costs by treating patients in their lowest acuity setting – at home, where the vast majority of chronically ill patients prefer to be treated. And because they tailor their care plans to the individual patient, Friend can deliver better patient outcomes all while utilizing a more efficient deployment of resources; exactly the kind of disruptive innovation that the post-acute care space so desperately needs.

And no commentary on post-acute care innovation would be complete without mentioning the impact of telemedicine. Companies like TripleCare and Call9 offer preventative treatment right at patients’ bedsides, affording them quick and easy access to leading physicians and healthcare professionals. Needless to say, patient outcomes improve substantially, as TripleCare and Call9 physicians have treated thousands of conditions on-site, the former avoiding hospital admissions for over 80% of their patient populations, and the latter decreasing hospital visits by over 50% for SNF patients.

Challenges and Opportunities

While it’s true that the post-acute care industry faces numerous challenges, it’s also true that beneath every challenge lies an opportunity. Take regulatory uncertainty, for example, which is a core concern of industry participants. What will CMS reimburse for when it comes to Medicare and Medicaid, and how will those reimbursements inform investor decision-making?

If we step back a moment, regulatory uncertainty exists in any industry undergoing innovation. Why should healthcare be any different? Yes, it’s unnerving not knowing how the federal government will react, but the likelihood is that once the benefits to both patients and the country’s bottom line are accounted for, disruptive technologies will continue to be welcomed with open arms (of course, I’m no expert on government policy, so don’t hold me to that one).

Along that same line of thinking, here are some eye-opening stats that you may or may not already be aware of:

  • • 10,000 Baby Boomers reach age 65 every day, and that will continue for the next 19 years
  • • 49 times as many people reach age 85 now than did a century ago
  • • Medicare costs are forecast to increase to $1.087 billion in 2024, reflecting a compound annual growth rate of 6.1%
  • • Spending on Medicare beneficiaries in their last year of life accounts for roughly 25% of total Medicare spending on beneficiaries age 65 or older

Clearly the rise in elderly patient populations and life expectancy will contribute to increased healthcare challenges and put incredible strains on our overall health system, most especially in post-acute care. But let’s not forget all of the positive tailwinds our industry has at its back: the advent of disruptive technology, a tech-enabled patient population primed to take full advantage of that innovation, and ambitious healthcare entrepreneurs working tirelessly to connect the dots. With that foundation laid, we should be comforted in the knowledge that the future for post-acute care will be more efficient, less costly, and produce a greater degree of positive outcomes. It has to.