The effectiveness of post-acute care

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 DESCRIPTION (provided by applicant): Post-acute care (PAC) serves as an important transition for patients who no longer require acute hospital services but are too sick to be discharged home. The use and costs of PAC have risen dramatically over the past decade, with 38% of Medicare hospitalizations leading to PAC use. In 2012 Medicare spent $62.1 billion on PAC, nearly double what it spent ten years earlier. As payment reform under the Affordable Care Act is implemented, including policies that favor increased coordination of care and bundling payments over multiple providers and settings, the importance of PAC is expected to continue to grow. Yet, surprisingly little is known about how to effectively and efficiently use PAC to improve patient outcomes. The Institute of Medicine recently reported that geographic variation in Medicare spending per beneficiary could be reduced by an astounding 73% if variation in PAC use were eliminated, suggesting that we are far from using PAC consistently. Furthermore, the effect of PAC use on patient outcomes is unclear. The overall goal of this study is to examine the use of PAC and how that use affects costs (total Medicare costs), patient outcomes (mortality, functional status, discharge to the community, and readmissions to the hospital), and value of care. Unlike previous studies that have examined the effects of hospital care and PAC in isolation from one another, we examine their effects jointly. Under current payment reforms that emphasize coordination of care, it is essential to inform more effective PAC use throughout episodes of care. In addition, while most previous studies focus on a single type of PAC, we look simultaneously at the three most common settings: skilled nursing facilities (SNFs), inpatient rehabilitation facilities (IRFs), and home health agencies (HHAs). Our specific aims are 1) to describe trends in PAC utilization, costs, and outcomes, decomposing the trends into changes on the extensive margin (e.g., the number of people using any PAC and each type of PAC) and changes on the intensive margin (e.g., the intensity of care conditional on receiving a type of PAC); 2) to assess jointly the impact of hospital care and PAC on costs, outcomes, and value; and 3) to assess the response by hospitals and PAC providers to incentives for coordination of care, using Accountable Care Organizations as an example. We use strong quasi-experimental methods to identify causal effects. Results will enable us to identify the most promising avenues for using PAC efficiently and productively to improve patient outcomes after an acute hospitalization. They will also have direct policy and practice implications for the multi-setting decision-making central to emerging models of coordinated care.