Obama administration eyes post-acute care

The Obama administration will intensify its focus on cutting healthcare costs related to care after hospital discharge, Kaiser Health News reported.

Medicare spending per capita on post-acute care services grew about 5 percent or more annually in 34 of the 50 largest hospital markets in the United States, according to an economic analysis by Kaiser Health News. Some states, such as Louisiana, spend more than 30 percent of all their Medicare dollars on such services. Altogether, the program spent about $62 billion on such services in 2012.

Although hospitals have the power to act as effective fiscal gatekeepers for post-acute care, few actually do, according to Kaiser Health News. "They have not had to think remotely about costs or quality or anything except: Where's a bed available," Anne Tumlinson, a consultant at Avalere Health, told the publication. "Often doctors have very little to do with the discharge decision. Largely it has to do with the supply of providers and type of providers in the area."

And Medicare often pays widely differing rates to care for patients with similar conditions. It will pay more than three times the rate if a stroke patient is discharged to a rehabilitation facility instead of sent home and cared for by health aides. Moreover, nursing home facilities tend to have a woeful record on controlling hospital readmissions, driving up costs on the inpatient side even further.

As a result, the Obama administration proposes bundling payments for post-acute care, reducing payments to post-acute providers and refocusing payment rates on demographically similar patients rather than the services rendered.

The proposals--which the administration still must flesh out in great detail-come as healthcare spending has increased dramatically in recent months with the rollout of the Affordable Care Act.

However, industry observers believe it will be a long and sometimes difficult path to level and reduce post-acute care payments and costs. "It's going to be a fairly ugly transition to get to a more efficient, streamlined system," Stephen Parente, a healthcare economist at the University of Minnesota, told Kaiser Health News. "It's going to be a consultant's bonanza."

To learn more:
- read the Kaiser Health News article