Reduce Cost, Increase Revenue: The Power of Inpatient Rehabilitation Partnership

Hospitals are facing significant financial challenges, including rising supply and labor costs, increasing regulatory burdens, and other operating pressures. Moreover, 40% of hospitals are operating in the red, and 31% of rural hospitals are at risk of closing, notes a Kaufman Hall report.¹

These pressures are pushing hospitals to find ways to improve their financial health while maintaining effective care delivery.

Three key areas where a joint venture (JV) or contract management partnership with a trusted and experienced inpatient rehabilitation provider can help enhance hospital financial performance:

1. 1. 1. Reduced Readmissions

Re-hospitalizations and other transfers in the post-acute setting can lead to poor patient satisfaction and care quality, ultimately creating negative financial consequences. Research shows that some of the lowest-performing hospitals around the nation experience readmission penalties 2-3X higher than those performing at an average rate.²

Through specialized expertise, access to national resources, and a refined strategy to recruit and retain top talent, a rehabilitation partner can optimize the efficiency and profitability of a rehabilitation unit or hospital.

Additionally, a qualified rehabilitation partner can help:

• • • • Streamline patient throughput
      • Reduce care costs for both the patient and hospital
      • Aid in effective staff training and education
      • Create a more positive patient experience from admission to discharge

When a hospital can rely on a partner for best-in-class rehabilitation expertise, factors such as patient outcomes, staff retention and a facility’s bottom line can all benefit.

1. 1. 2. Improved Operational Spend

In a Commonwealth Fund study of 10 developed countries, the U.S. stands out for its exceptionally high healthcare spending as a percentage of its Gross Domestic Product (GDP), yet it lags significantly in overall performance.³ This trend is apparent in communities across the country, as an increasing number of local hospitals are spending more on care (labor, supplies, technology) but continue to see suboptimal outcomes.

The knowledge and expertise supplied by a qualified partner allows hospitals to leverage economies of scale to help significantly reduce operational costs. This includes optimizing supply chain management for lower procurement costs and employing data-driven insights to identify and implement cost-saving measures across various operational areas.

By implementing these strategies, hospitals can enhance healthcare efficiency and affordability, ultimately benefiting both patients and the hospital. Furthermore, widespread adoption of JV or contract management partnerships could significantly contribute to improving the U.S.'s healthcare spending and performance, potentially reversing the nation's downward trend in global rankings.

1. 1. 3. Enhanced hospital performance under value-based care

The shift to value-based care (VBC) has pushed hospitals to reduce spending while improving quality and outcomes. According to a McKinsey and Company report, 90 million people will be receiving care under VBC models by 2027 – a jump from 43 million in 2022.⁴

A post-acute partnership strategy aids in a successful transition to value-based care. It can help:

• • • • Equip hospital staff and leadership with the resources to increase care quality and efficiency
      • Produce more timely transfers to post-acute settings
      • Reduce readmission risk
      • Generate long-term cost savings for the hospital overall

Through strategic partnerships, hospitals can effectively navigate the complexities of VBC, therefore helping to achieve the above outcomes while also positioning themselves for long-term financial sustainability.

Making partnership a part of your hospital’s strategic priorities

Partnering with a national rehabilitation provider is a key next step in helping hospitals achieve profitability and sustainability into the future.

Contact us to learn how Lifepoint Rehabilitation can help your hospital improve patient outcomes and financial health in 2025 and beyond.

References:

1. https://www.kaufmanhall.com/insights/research-report/national-hospital-flash-report-may-2024-metrics
2. https://www.advisory.com/Topics/Post-Acute-Care/2018/08/Unlocking-the-Financial-Benefits-of-a-Post-Acute-Strategy.
3. https://www.commonwealthfund.org/publications/fund-reports/2024/sep/mirror-mirror-2024
4. https://www.mckinsey.com/industries/healthcare/our-insights/what-to-expect-in-us-healthcare-in-2024-and-beyond