Wag The Dog: Will Subacute Providers Drive Upstream Innovation?

By Gregg A. Masters, MPH

One of the more interesting and perhaps developing trends to watch in fledgling accountable care enterprises or ACOs is the blueprint adopted for their chosen pathways towards integration (clinical, economic or legal). Since all healthcare is [hyper] local and, once you’ve seen an ACO, you’ve seen one ACO its vital to appreciate not just the nuances of strategy differentials but the fundamental structural imprint of the local or regional delivery system.

As I have written before not only have we built our cathedrals of medicine separated by ‘moats and silos’ from the very people they serve, i.e., patients, but also the tapestry of service delivery is more often than not laced together in a provider driven discontinuous pattern of relationship driven referral practices, vs a patient centric approach.

Typically, top dog in the provider referral footprint food chain is the general or acute health care hospital, or regional referral center. All others are niche speciality play competitors or network integrated service extensions, i.e., ASC’s, free standing cancer centers, urgent care, etc.

Most of the network creation and management effort has focused on the acute care side. Yet as emerging ACOs begin to shift the focus from individual to population level health outcomes management, aided by certain economic consequences of potentially improper care management, i.e., readmits within 30 days of discharge, there is a renewed vigor with which the upstream providers’ (hospital, academic or regional referral medical center) examine their relationship with their ‘downstream providers’, i.e., the subacute world of SNF’s, Rehab facilities, home health agencies, case managers, medical assisted living, etc.

After all who is in a better position to judge the quality of the ‘output’ from the upstream factory, than the downstream recipients (both institutional and professional) of their work?

It seems as we look to quality of care and broad spectrum clinical risk management issues, particularly from a potential readmit point of view, the voice of the downstream players will now matter more than it has to date.

Perhaps we’ll even see a spate of acquisitions and mergers to place the downstream network into the tapestry of upstream acute care practices. From EHR to HIE nervous systems to clinical pathways of collaboration there will be much re-engineering on tap.


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  1. Gregg, Good discussion of a topic worth following. Agree, both Medicare and commercial ACO and AC-like initiatives tend to put hospitals and larger physician groups closer to the top of the food chain, to the potential disadvantage of ancillary and specialty providers. Difficult for these folks to have a voice when they are not at the negotiating table.

    Can they get a seat at the table by collaborating and consolidating? Would love to hear of examples where this is being tried.

  2. Hi Vince, thanks for comment. Sorry, I just picked up today.

    Definitely something to watch, I suspect the typical solution will be vai vertical integration and acquisition of the key downstream players. This may minimize the critical input an arm length relationship might otherwise afford. I know, call me a cynic!

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