Post-acute care--the next frontier for controlling Medicare spending.

A striking conclusion from the Institute of Medicine’s recent report on geographic variation in Medicare spending is that post-acute care is the largest driver of overall variation.1 Medicare pays for post-acute care — short-term skilled nursing and therapy services for patients recovering from acute illness (typically after a hospitalization), provided by home health agencies, skilled nursing facilities (SNFs), inpatient rehabilitation hospitals, and long-term care hospitals. In 2012, Medicare spending for these services exceeded $62 billion. For patients who are hospitalized for exacerbations of chronic conditions such as con-