Hospitals aren’t exactly strangers to challenging financial conditions. Generally, they’re operated on awfully tight margins to begin with. But that’s just the tip of the iceberg.
Competition is heating up thanks to an acquisition-fueled marketplace, while many are also working to attract and retain the best in a limited talent pool. Then add in healthcare reform, which has providers struggling to adjust to new reimbursement models and a system that rewards the value of care over volume.
With that and a lot of other things in mind, three major credit rating agencies have given the sector a poor outlook, according to a report from financial consulting firm Lancaster Pollard. But the report doesn’t just outline challenges; it presents an interesting opportunity: senior housing.
“Seniors Housing Opportunities for Hospitals” offers insight on how hospitals are well poised to capitalize on the need for more environments for aging.
And while there are several reasons offered for why, there’s one that specifically answers one of the previously mentioned financial challenges.
You see, Medicare will partly determine hospitals’ reimbursements based on readmission rates. And when, for example, a senior patient is discharged and perhaps stepped down to a long-term care provider, there’s no oversight by the hospital over the care received there … or whether that care may lead to the patient ending up back in the hospital.
But what if the hospital and the LTC site were all part of the same care continuum?
On the acute care side, we hear a lot about this. Healthcare providers are expanding their reach, creating hub-and-spoke systems that provide outpatient centers and clinics within communities, providing easy access to care for patients that all ties back to a main campus or medical center—a solution to managing patient health more effectively and efficiently, all under a single brand umbrella.
There’s been plenty of buzz about long-term care being the next logical step in expanding and enhancing healthcare systems, but few have dipped their toes in the water.
The Lancaster Pollard report says small community hospitals are particularly primed for success. For starters, the additional cash flow would obviously be beneficial. But then there’s the matter of demand—in smaller, rural communities, especially, LTC offerings are often both limited and outdated, pushing the need for newcomers to these markets.
Community hospitals are already closely tied to their local area, and a move to senior care offers a built-in referral system, the report notes. To make sure that patients receive an appropriate level of care when in the hospital and when not, this type of move stands to keep patients within a providers’ system, where things like readmissions could maybe be better controlled.
Is it time for hospitals to launch sister long-term care communities? Only time will tell. But this is at least more food for thought.
