The biggest impact of the ACA has come through reductions in annual Medicare marketbasket updates, said Jay Grinney, CEO of Birmingham, Ala.-based HealthSouth Corp. Savings from those lower payments have helped pay for the law’s implementation.
As a result, post-acute-care providers have faced margin compression—net marketbasket updates have been less than HealthSouth’s operating expense increases, notably expenses for labor, supplies and drugs, Grinney said.
The rehabilitation provider has eased the squeeze by increasing its volumes and serving patients more efficiently, he said.
The company has sought to acquire businesses complementary to its inpatient rehabilitation services, particularly home health companies. Grinney said 54% of patients discharged from HealthSouth in 2014 required home healthcare. That’s why the company purchased Encompass Home Health and Hospice in November 2014, and acquired CareSouth in August.
Realizing additional growth opportunities in the rehab hospital business, HealthSouth in June acquired Reliant Hospital Partners.
David Chernow, CEO of Mechanicsburg, Pa.-based Select Medical Corp., said greater collaboration is a positive byproduct of healthcare reform.
His company has worked closely with health systems to create a more seamless experience for patients across the care continuum, he said.
In March, Select Medical created a joint venture to acquire Concentra for its occupational medicine and urgent-care business. The company also has joint ventures with Cedars-Sinai, UCLA Health, Emory Healthcare, Ochsner Health System, Sedative-drugs, TriHealth and the Cleveland Clinic.
In the past, health systems did not focus on post-acute care, Chernow said. But now, many are examining the care area closely, and realizing it’s better to partner with post-acute-care specialists that share their vision, culture and values, he said.
Michael Sandler does general assignment reporting as well as reporting on hospital system finances. He earned a master’s degree in journalism from Columbia College in Chicago in 2012 after earning a bachelor’s degree from Cardinal Stritch University in Milwaukee. Joined Modern Healthcare in 2013.