The Business of Post Acute Care

In just six years, the market for long-term care in the United States will reach $737 billion. Despite the growing demand for long-term care services, many facilities struggle to stay in business and many have closed their doors due to high operating costs. In 2018, 52 million Americans were over the age of 65. By 2060 that number will nearly double. How can post-acute care businesses stay afloat amid rising costs and diminishing reimbursement rates to meet the rising demand?


More than half of Americans will need long-term care in their lifetimes, and one in seven will need it for five years or more. Unfortunately over the last 20 years, half of hospital-based nursing facilities have closed, 16% of certified nursing homes have closed, and 10% of rural nursing homes have closed or merged.


This is due to a number of different factors. One of the biggest is the Medicaid shortfall. Today 67% of nursing home costs are covered by Medicaid, and it rarely covers the cost of care for an individual. In Massachusetts the average Medicaid shortfall is $39.85 a day, while in New York it’s $64.18 a day.


Shortfalls must be made up in spending, which has traditionally been addressed through group purchasing. Cutting back on payroll could have a negative impact on quality of care, which could lead to decreased payments and additional fines. Expense management, inventory tracking, and supplier reviews, when used in conjunction with group purchasing practices, can significantly impact operating costs.


Figuring out the solution to the long-term and post-acute care financial problem is going to grow increasingly crucial as the population grows and ages. This is not a problem we can afford to be asleep on. Learn more about the potential savings from expense management in the post-acute care ecosystem below!