Annals of Long Term Care

Perhaps nowhere are incentives more misaligned than they are when it comes to providing urgent care to a nursing home resident. Picture the following typical scenario: Mrs. M, an elderly nursing home resident, is found to be having a productive cough and a fever. The nursing staff can complete an assessment and provide this information to the attending physician who can then order diagnostic studies and treatment, or, instead, the nursing staff can call the attending and simply state, “The resident does not look good” and recommend that the resident be sent to another facility for treatment. To the nurse, this means that there is no need to complete an assessment, to obtain tests and treatments, or to further manage this resident; instead, one call to 911 is all that is needed.

From the attending physician’s perspective, sending the resident to the emergency department for assessment and any future management means decreased liability. And for those attendings who also follow their patients in the hospital, it can mean increased visit revenue for the acute care management of the patient. For the nursing home’s administrator, sending the resident to the hospital means decreased liability and increased revenue when that resident returns to the nursing home under the Medicare Part A sub-acute stay. One can easily see that the current incentives for sending residents to hospitals do nothing to encourage nursing homes to raise their level of clinical services so that residents can be cared for in the nursing home, thus avoiding hospitalizations.

The costs of a nursing home failing to provide appropriate urgent care to its residents are significant and will likely grow. Beyond the overall increased healthcare costs related to acute hospitalization instead of ongoing care in the nursing home setting, there are additional “costs,” including the emotional trauma to the resident and family due to a transition in care and the well-established adverse effects and iatrogenic complications of hospitalization. In one study, 58.3% of elderly patients suffered at least one iatrogenic complication during their hospitalization.¹ A recent study from the Henry J. Kaiser Family Foundation asserts that a 25% reduction in hospitalizations among Medicare beneficiaries residing in long-term care facilities would have yielded an estimated savings of $2.1 billion last year alone.²

The findings from the Centers for Medicare & Medicaid Services (CMS) Nursing Home Special Study demonstrated that a reduction in potentially avoidable hospitalizations by 33% would save Medicare over $1 billion annually.³ This number is not surprising to those who understand the scope of the problem. A study published in 2000 showed that 40% of hospital admissions and 36% of emergency department transfers among 100 residents from seven Los Angeles nursing homes were considered inappropriate.⁴ In a more recent study, it was found that in New York state, Medicare spent more than $200 million on hospitalizations related to ambulatory care–sensitive diagnoses among long-stay nursing home residents, meaning diagnoses that could have been treated in the nursing home rather than in the hospital.⁵ The scope of this problem makes it clear that, at a time of limited healthcare resources, we cannot afford to provide inappropriate care.

Aligning Incentives
The correction of this problem has already begun in long-term care. For example, the alignment of incentives is a cornerstone of Medicare’s Special Needs Plans (SNPs)⁶ that rather than serving all Medicare beneficiaries in a geographic region as traditional Medicare managed care plans are required, focuses on one of three unique groups: persons with a specific chronic illness such as Alzheimer’s disease; those with both Medicare and Medicaid coverage; and persons who are institutionalized.