As the Source of 73% of Variation in Healthcare Spending, Post-Acute Care Can Make or Break Your Organization’s Strategy

by Louise Bryde, Principal and Doug Johnson, Principal | Stroudwater Associates

As the healthcare industry moves toward value-based payment models, hospitals, health systems, Accountable Care Organizations (ACOs), and health plans have increasingly recognized the importance of post-acute care (PAC) as a key component of their organizations’ care continuums.

A widely quoted report by the Institute of Medicine in 2013 identified PAC as the source of 73 percent of the variation in healthcare spending, significantly increasing attention to the cost and quality of post-acute care services. In its September 2017 report to Congress, MedPAC found that PAC had the greatest cost variation among all sectors when compared to acute and ambulatory care.

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