With expanding life expectancy, the aging of the baby boomer generation and the rise in chronic conditions, the demand for post-acute care and long-term care services has never been greater. At the same time, the PAC and LTC markets are facing tremendous pressures. Patients are voicing stronger preferences to “age in place” and receive care at home; the average patient acuity in PAC facilities is increasing; cost pressures in the system are pushing patients to lower-cost care settings across the PAC continuum; providers are facing reimbursement pressures and greater scrutiny from payers and employers; and payers are demanding higher-quality performance, more integrated care delivery and a shift away from the traditional “heads in beds” volume-based operating models.
In this evolving market landscape, PAC and LTC providers are struggling to meet the needs across their patient groups, referring providers, payers and regulators. L.E.K. advises organizations (and investors) on how to adapt to the changing PAC and LTC market needs, reassess their operating models and improve their care delivery models.
Key questions and challenges
Some of the key questions post-acute and residential care providers are facing include:
- How quickly is value-based care penetrating the PAC and LTC markets? What VBC models are and are not working, and how should we prepare for the transition?
- Which markets are the most attractive for expansion, given local supply-and-demand dynamics?
- How should we think about market consolidation and integrating care across the PAC spectrum?
- What role should providers, payers and third-party “PAC conveners” play in optimizing care pathways?
- How can we improve clinical outcomes (e.g., preventing readmissions to acute care) and improve coordination and communication with patients’ primary care and acute care providers?
- How can evidenced-based protocols and data analytics help assess the most appropriate site of care and length of stay for each patient episode?
- What opportunities are there for us to increase support for caregivers, better address the social determinants of health, and leverage community resources more effectively?
- What opportunities are there to improve end-of-life and palliative care models?
- How should remote monitoring equipment and telehealth be deployed to help allow patients to recover or age in the setting of their choice?
- How should we prepare for pending regulatory changes, and what can be done to mitigate the impact?
- How can we drive operational performance and improve the reimbursement mix to optimize performance across our portfolio of facilities?
- As the U.S. payer mix continues to shift toward managed care in Medicare and Medicaid, how can we improve our relationships with payers, optimize contracting approaches and deliver on payer quality expectations?
Examples of our work
To learn more about how we help clients create value, please refer to these case examples:
- Completed an in-depth assessment of the ongoing shift to managed care and value-based contracting, including the impact on post-acute care, and refined the organizational design of an operator of hospice care, assisted living facilities, skilled nursing facilities and inpatient rehabilitation facilities, to enable best-in-class managed care contracting.
- Collaborated with a provider of integrated post-acute care services to develop a comprehensive strategic plan, including a roadmap to becoming a convener capable of taking financial risk from payers. The client is pursuing a multiyear plan in accordance with the recommendations L.E.K. provided.
- Provided strategic design, financial modeling and implementation support to a health plan for a new advanced care model focused on transitions of care and post-acute care management. Our work delivered significant improvement in clinical outcomes and cost savings by providing direct patient care to the sickest, frailest Medicare Advantage members through physicians and nurse practitioners employed by the health plan.
- Developed a strategic growth plan for a long-term acute care hospital operator, including assessment of payment and regulatory reform; analysis of the impact of the managed care, value-based care and accountable care evolution; and in-depth analysis of several geographic markets for potential expansion.
- Developed a comprehensive growth strategy for a provider of palliative, hospice and end-of-life care, articulating best-in-class practices and assessing potential partnership opportunities that positioned the client to achieve increased revenue and scale, and to extend its reach and mission.
- Completed commercial due diligence of two hospice and palliative care providers, and developed an innovative assessment of the “s-curve” growth for hospice and palliative care in any given market, to enable efficient market assessment and prioritization for future investment.
- Completed an in-depth assessment of the facility-based long-term care provider market — e.g., assisted living facilities, independent living facilities and retirement centers, certified nursing homes, adult day care, inpatient rehab facilities — and developed a go-to-market plan focusing on the ALF and nursing home segments, for a distributor of medical equipment, products and supplies.