Comparing Capacity and Demand for Long-Term Acute Care Hospitals: Variation Between Mid- and South-Atlantic Hospital Referral Regions

Abstract

Geographic variation in post-acute care is a recurrent theme in health services research because of its relevance to overall Medicare spending. There are at least two additional reasons to understand geographic differences in post-acute care hospital services. First, local availability of critical or specialized hospital services can impact treatment options, patient choices, and ultimately, clinical quality and outcomes. Second, recent experience of the COVID-19 public health emergency highlights the need for broad coverage and availability of critical health resources to help maintain continuous operation of health systems.

This research brief examines the geographic distribution of both the availability of and potential demand for long-term acute care hospital (LTCH) care, a unique clinical setting within the post-acute continuum. The magnitude and implications of geographic disparities in the capacity of LTCHs to serve local demand provides important context for the evaluation of patterns in post-acute utilization, spending, health system reliability, and other policy imperatives under consideration as the United States emerges from the COVID-19 public health emergency.

Our analysis of data from Mid- and South Atlantic states in the calendar year immediately preceding the pandemic found that while overall capacity appears more than adequate to serve the expected demand for LTCH admissions, the small-area capacity relative to local demand exhibits a great disparity. On average, 60% of LTCH patients are Medicare FFS beneficiaries. Yet, four of fifty-six hospital referral regions (HRRs) had LTCH capacity 10 times expected Medicare FFS demand. At the same time, nearly one-third of the referral regions had no LTCH beds at all. While an assessment of whether overall LTCH capacity in the Mid- and South-Atlantic states is excessive or insufficient is beyond the scope of this study, our result demonstrates the magnitude of variation in the supply of in-region critical care resources. Any post-acute care reform should consider the need to rebalance these resources, as well as the potential impact on quality, utilization, and prevailing spending patterns.

This research brief examines the geographic distribution of both the availability of and potential demand for long-term acute care hospital (LTCH) care, a unique clinical setting within the post-acute continuum. The magnitude and implications of geographic disparities in the capacity of LTCHs to serve local demand provides important context for the evaluation of patterns in post-acute utilization, spending, health system reliability, and other policy imperatives under consideration as the United States emerges from the COVID-19 public health emergency.

Our analysis of data from Mid- and South Atlantic states in the calendar year immediately preceding the pandemic found that while overall capacity appears more than adequate to serve the expected demand for LTCH admissions, the small-area capacity relative to local demand exhibits a great disparity. On average, 60% of LTCH patients are Medicare FFS beneficiaries. Yet, four of fifty-six hospital referral regions (HRRs) had LTCH capacity 10 times expected Medicare FFS demand. At the same time, nearly one-third of the referral regions had no LTCH beds at all. While an assessment of whether overall LTCH capacity in the Mid- and South-Atlantic states is excessive or insufficient is beyond the scope of this study, our result demonstrates the magnitude of variation in the supply of in-region critical care resources. Any post-acute care reform should consider the need to rebalance these resources, as well as the potential impact on quality, utilization, and prevailing spending patterns.