The False Divide Between Acute and Chronic Care is Diluting Your Strategic Edge

Silos are Strategic Liabilities

Most people pick a side in value‑based care.
Episodes of care or total cost of care.
As if they’re rival ideologies instead of complementary levers.

That false divide is slowing progress.

Models like BPCI‑Advanced, which overlapped with ACOs (patients can be attributed to an ACO and “fall into” a BPCI-A episode based on their hospital stay final DRG), make the connection impossible to ignore. When a patient sits in both programs, incentives stack. Suddenly, the ROI of devoting resources to managing an acute episode starts to look different.

And that’s where the real leverage is.

Acute episodes create accountability for the post‑discharge trajectory and post-acute throughput of often complex, vulnerable patients.
ACO infrastructure creates accountability for the long‑term trajectory of all attributed patients. Together, they form a feedback loop that improves quality and reduces avoidable spend.

Policy is moving in this direction.
The LEAD model and the IPPS proposal to expand CJR nationwide signal a future where episodic and population‑based models overlap by design.

Clinicians should take note.

Hospitals should take note.

Advanced primary care teams accountability for cost and quality of care should take note.

Then layer on chronic episodes of care, which the LEAD model plans to add in the near future.

Here’s the thing—

Chronic disease management, typically the work of advanced primary care teams, can reduce ED visits and inpatient admissions. But care for some conditions is often driven by clinicians outside the advanced primary care team’s walls. This is the basis of long-term episode types. They create a framework for partnering with providers managing specific conditions that are the drivers of high spend.

Chronic episodes of care payment arrangements, such as those for diabetes, depression, low back pain, and chronic kidney disease, can help reduce the likelihood of a patient presenting to the ER or being admitted to the hospital by aligning incentives between the at-risk providers and/or organization and others in the clinical care ecosystem.

And when a patient in a chronic episode IS admitted to a hospital, the acute episode program structure can function as a part of the continuum of coordinated care.

This is where trust is built with patient.
This is also where goals‑of‑care conversations finally happen. And speaking of goals of care—

Advanced Care Planning Emerges in the 2027 IPPS Proposed Rule 

The latest IPPS proposal includes an eCQM advanced care planning measure. CMS understands that patients need to be engaged in conversations that help them understand their options and make informed choices. Yes, advanced care planning must happen regularly in outpatient physician practices. But they belong in the hospital, too. More on that shortly.

The bottom line: 

Episodes of care and total cost of care aren’t separate domains.
They’re interlocking gears.
Acute episodes, chronic care management, and population‑level accountability work best when they work together.

That’s how you improve outcomes.
That’s how you reduce avoidable spending.
And that’s how you build a system that finally makes sense for patients.

Why the Overlap Matters Now

• Episodes address the “discharge fast, hope for the best” problem. 
  Hospitals have historically been incentivized to move patients out quickly, not ensure what happens next is in the best interests of the patient given the totality of their needs.

• ACOs address the “nobody owns the long‑term outcome” problem. 
  Primary care teams have a long-term perspective and often focus on population-based levers like preventive testing, annual wellness visits, and patient engagement.

• Together, they create shared accountability for the full patient journey and the reality of navigating the health care ecosystem. 
  Acute → post‑acute → chronic → preventive.
  One continuous arc instead of disconnected events.

• Policy is aligning the incentives. 
  More overlap between episodic and population models is growing because we’ve learned how powerful it can be based on model tests.

                ┌──────────────────────────┐
                │      GEAR 1: ACUTE       │
                │        EPISODES          │
                ├──────────────────────────┤
                │ • Manage hospitalization │
                │ • Own post‑discharge     │
                │   trajectory             │
                │ • Reduce complications   │
                │   + readmissions         │
                └─────────────▲────────────┘
                              │
                              │ feeds into
                              │
┌──────────────────────────┐  │   ┌──────────────────────────┐
│   GEAR 3: TOTAL COST     │◄─┘   │     GEAR 2: CHRONIC       │
│        OF CARE           │       │        EPISODES          │
├──────────────────────────┤       ├──────────────────────────┤
│ • Close preventive gaps  │       │ • Stabilize complex pts  │
│ • Manage long‑term risk  │       │ • Engage caregivers       │
│ • Reinforce episode      │       │ • Enable goals‑of‑care    │
│   success                │       │   conversations           │
└─────────────▲────────────┘       └─────────────▲────────────┘
              │                                    │
              └────────────── interconnected ──────┘

What Policymakers Are Signaling

We are entering the phase where learnings from the past 12+ years of value-based care model testing are paying off. Policymakers know more about what works, and they are doubling down on that.

Model overlap is more intentional.

There is an incremental benefit to the patient and there’s a greater chance of improving cost and quality outcomes when patients fall into both program types. The TEAM Model and CJR-X are overlapping with MSSP and LEAD by design. What this means is hospitals must think about their role differently. Their engagement in helping to drive down medical cost trend is non-negotiable.

There’s a greater emphasis on advanced care planning. 

It was tested as a quality measure in prior models. In the 2027 IPPS Proposed Rule, we see it emerge as a quality measure for the hospital itself. It’s time to move beyond the acute care excuses of “that’s not my job,” and of physicians in the hospital saying “that’s for their primary care doctor to deal with.”

No.

Primary care must do its part. They must have regular discussions with their patients with chronic and serious illness and make sure they understand their disease trajectory, their goals, and their options. No argument here from me.

But hospital-based clinicians don’t just get to wash their hands of it because of where they interact with patients. It’s easier (and necessary) to access the information needed to have a meaningful conversation about a patient’s advanced care plan while a patient is in the hospital.

And it’s not something that can be punted to a nurse or a social worker—a frustrating push-back I heard for years. Physicians must own this as part of their responsibility. Hospitals will need to put systems in place to ensure this happens. That being said, it’s harder than most think.

But this is the beauty of CMS’ statutory authority to drive care transformation. It’s a requirement for everyone, so everyone will have to figure it out.

CMS is ratcheting up expectations of cross-setting coordination of patient care, and caring for patients with their whole care plan in mind. Not just the plan to discharge them.

A lack of meaningful incentives has yielded fragmented silos of care. Hospitals, primary care, specialty care, post-acute sites—they can’t operate in their own bubbles anymore. Or at least they shouldn’t.

Accountability expectations are changing.

It used to be perfectly acceptable to only be accountable for the actual work you do when in front of a patient or when they are in your building. Soon, we will all see that those were the “bad old days.” Policy changes, including payment incentives, changes to conditions of participation, interoperability requirements, and health tech advancements are accelerating the pace of change.

For hospitals themselves, length of stay is no longer the only metric that counts.