Annals of Long Term Care

This article is the last in a three-part series. Part I appeared in the September issue and Part II in the October issue of the Journal.

Financial Incentives and Structural Issues

Recommendations
Health care organizations (HCOs) should:

1. Ensure that financial incentives among providers are aligned to promote (1) high quality care transitions, and (2) the transmission of essential data elements to practitioners involved in a patient’s care across different settings.
2. Structure their delivery systems to promote seamless transitions across care settings.
3. Review benefits coverage and limitations with patients and/or practitioners prior to a transfer, and explain to patients what they should expect at the next care setting(s).

Statement of Problem

Payment mechanisms commonly lack incentives for assuring that optimal care coordination occurs across settings. Per-stay (or per-case) payment mechanisms can promote premature patient transfer without adequate focus on the patient’s needs at the next setting. Yet reducing the length of stay in one setting may negatively influence care as well as costs in a subsequent setting. Furthermore, each additional care transition provides another opportunity for an adverse transition-related event or error to occur.

Structural barriers may also impede the provision of optimal care for patients in transition. For example, HCOs that attempt to create an affiliated or contracted continuum of care for a variety of acute and post-acute services often encounter differences among providers with respect to their mission, staffing, internal incentives, and professional cultures. These differences can contribute to poor communication, insufficient information transfer, and inadequate preparation of the patient and caregiver. Further, the continuum of care may be incomplete or lack the capability to care for certain subsets of patients, such as those who require ventilators, have antibiotic-resistant infections, or have moderate-to-advanced dementia. Finally, tensions may arise within HCOs between clinicians who desire to affiliate or contract with high-quality facilities and the finance department, which desires to negotiate the lowest rates.

The manner in which services are structured also impacts the provision of care. For example, under one HCO, a patient with osteomyelitis may be treated at home and receive intravenous antibiotics three times daily from a visiting nurse. Under another HCO, the home health agency may not have the technical ability or requisite staffing to provide such frequent home visits, requiring that the patient be admitted to a skilled nursing facility (SNF). Although some degree of variation is inevitable, the HCO is responsible for adopting mechanisms to ensure that care is provided in the most appropriate setting and is of high quality. Also, the lack of a common medication formulary across settings heightens the risk for miscommunication and error as the medication regimen must be revised in each setting.1-4

Additionally, patients may not comprehend their benefits package and their resulting financial obligation, including how that obligation varies by care setting. For example, a common misconception among patients and caregivers is that their SNF benefit covers 100 days of care, irrespective of medical necessity. In addition, some patients may choose to receive care in settings that lack adequate staff and resources (eg, going directly home instead of to a SNF), potentially resulting in a lack of essential services and a greater risk for medication errors, fragmentation of care, and utilization of costly services.

Proposed Solutions

During negotiations with affiliated or contracted facilities and providers, HCOs can attempt to create financial incentives that support information transfer.