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Post Acute Care in a Drug Rehabilitation Center
Running Head: POST ACUTE CARE IN A DRUG REHABILITATION CENTER 1
[Type the company name]
Post Acute Care in a
Drug Rehabilitation
Center
[Type the document subtitle]
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3/6/2017

POST ACUTE CARE IN A DRUG REHABILITATION CENTER 2

Contents
Introduction ..................................................................................................................................... 3
Driving force for PAC services industry analysis........................................................................... 4
SWOT analysis ............................................................................................................................... 5
Internal Assessment ........................................................................................................................ 8
External Assessment ....................................................................................................................... 9
Force Field Analysis ..................................................................................................................... 11
Assumptions about future ............................................................................................................. 13
Sources of Uncertainty .................................................................................................................. 13
Conclusion .................................................................................................................................... 15
References ..................................................................................................................................... 16
Appendices .................................................................................................................................... 18
POST ACUTE CARE IN A DRUG REHABILITATION CENTER 3

Introduction
The U.S. healthcare system has transformed remarkably in last few years and is evolving further.
These changes in the healthcare system have exposed new opportunities. The regulatory bodies
are aiming at cutting down the healthcare expenditure by adopting value-based reimbursements
and by penalizing the hospital for avoidable readmissions. The hospitals are aiming at providing
high-quality care to reduce readmissions. With the changes in- demographics, regulatory
framework, reimbursement practices and coverage, the post- acute care have gained focus. The
demand for acute and post-acute care services have grown dramatically. Post-acute care is a
specialized follow-up care services provided to rehabilitate the patient after the acute care. Post-
acute services are provided through- Long-term care hospitals (LTCHs), Inpatient rehabilitation
facilities (IRFs), Skilled nursing facilities (SNFs) and home health agencies (Medpac, 2015). The
mission of Post-acute care providers is to ensure rehabilitation and long-term care of the patient
so as to avoid readmissions. Post-acute care plays an important role in the healthcare industry by
educing hospital readmissions, reducing the acute care cycle, and improving the quality of care.
The importance of Post-Acute care is visible from the growing demand for post-acute care
providers. Post- acute care providers received $62 billion reimbursements from Medicare in
2012, and the industry is growing steadily (Instant Insights, 2016).
The purpose of this paper is to conduct strategic assessment of post –acute care services industry
for guiding the venture in post-acute care in drug rehabilitation center. This paper uses various
techniques for strategic assessment like - SWOT analysis, internal assessment, external
assessment, PESTLE analysis, Force Field analysis, and future outlook of post-acute care
industry.
POST ACUTE CARE IN A DRUG REHABILITATION CENTER 4

Driving force for PAC services industry analysis
The post-acute care landscape has changed drastically in last decade. It is the fastest growing
segment of US healthcare system. Around 50% of the Medicare beneficiaries were discharged to
PAC setting after being treated in acute care hospital in 2013 (Medpac, 2015).Mainly due to the
eforms introduced by Medicare & Medicaid services, the demands for post-acute care services
have increased dramatically. These reforms include – readmissions penalties, bundled payments,
site neutral payment and the new payment system for PAC (Instant Insights, 2016). Additionally,
the demand for PAC services is fuel by the aging US population and growth in chronic illness.
PAC service industry has become an attractive industry for businesses to enter due to stronger
Medicare margins (Appendices figure1).Large health systems and hospitals are entering this
industry to capture the a
ay of opportunities available. There is tremendous pressure on health
care system from payers, patients and regulatory bodies to deliver high-quality care by reducing
emergency room visits and by avoidable readmissions (Instant Insights, 2016). The PAC services
are patient centric and aim at improving the care quality. PAC facilities include- skilled nursing
facilities (SNFs), Long Term care hospitals (LTCHs), Home health agencies (HHAs) and
inpatient rehabilitation facilities (IRFs) (Compton & Mohta, 2016). In recent times, Medicare
spending aims at cutting the expenditure on acute care and is promoting the expenditure on value
ased services like PAC. Thus in such circumstances, PAC services industry is a promising area
of business opportunities.
POST ACUTE CARE IN A DRUG REHABILITATION CENTER 5

SWOT analysis
The SWOT analysis identifies the strengths, weaknesses, opportunities and threats affecting
usiness. The Healthcare industry is quite dynamic in nature, and it is important to analyze the
internal and external factors affecting the proposed business venture. The SWOT analysis
technique helps in identifying the internal and external factors where adjustments are required
(Helms & Nixon, 2010).The conclusions drawn from SWOT analysis play a significant role in
usiness planning. The SWOT analysis of PAC services is as below:-
Strengths
 Specialized Care. PAC is a specialized high-quality care which helps in reducing medical
deteriorations and significantly contributes towards reducing the number of readmissions.
 Cost Advantages. The post-acute providers have better Medicare margins due to low-cost
structure, lower manpower requirements and lesser equipment required.
 Prefe
ed by hospitals. Most of the hospitals prefer post-acute care as it decreases the length of
stay and also helps in reducing the readmissions. Due to a high number of readmissions,
hospitals are being penalized by regulatory bodies, and hence they are looking for partnering
with post-acute providers to reduce readmissions drastically.
 Better Health outcomes. The patients prefer post-acute care as it patient centric and result in
etter health outcomes.
 Higher Reimbursements. Medicare s spending significantly on Post-Acute care (PAC), and it
continues to grow further. In 2013, $9.6 million was spent on PAC services in Medicare
(Medpac, 2015). The Medicare spending on PAC in last decade has increased by 100 %,
growing from $27 billion in 2001 to $ 62 billion in 2012.
POST ACUTE CARE IN A DRUG REHABILITATION CENTER 6

Weaknesses
 Ill-defined Need. The need for PAC services is highly ill-defined as it varies from patient to
patient and depending upon the type of illness.
 Lower margins. The cost of PAC services varies from patient to patient depending on the type
of illness, type of treatment facility and type of care required. This variable cost can remarkably
educe the margins of the PAC providers. Furthermore, regulatory bodies are implementing the
measure to reduce the healthcare costs in US market.
 Staff shortage. Healthcare sector is facing a critical shortage of long-term care and PAC
providers. The PAC providers are unable to render high-quality care due to the lack of
availability of PAC experts.
 Lack of coordination. Due to lack of coordination between hospitals and PAC providers,
quality of care is poor (Daly, 2016). Furthermore, it is very difficult to measure the performance
of PAC provider as there is poor communication between hospitals and PAC provider (Compton
& Mohta, 2016).
Opportunities
 Huge Demand. The demand for Post-acute services...