- Sprawl increases obesity.
- When the best costs the least.
- Update on Indonesian Tsunami.
- Spine implant. market in 2016: $10 billion
- Explaining how progressives will ration healthcare.
You are currently browsing the monthly archive for October 2010.
Tags: Links
Most people know that in the U.S., all Americans (i.e., citizens or permanent residents) are eligible for Medicare once they turn 65. However, the benefits are not the same for all individuals. For instance, the following groups can receive Part A Medicare coverage without paying a premium:
- Individuals who already get retirement benefits from Social Security or the Railroad Retirement Board.
- Individuals who are eligible to get Social Security or Railroad benefits but haven’t yet filed for them.
- Individuals who either themselves or their spouse has Medicare-covered government employment.
Some individuals qualify for both Medicare (for the elderly) and Medicaid (for the poor). These dual-eligible beneficiaries receive reduced cost sharing burdens as well.
There are two groups of Americans who can qualify for Medicare before they reach age 65. These include:
- Individuals who have received Social Security or Railroad Retirement Board disability benefits for 24 months.
- Most individuals with End-Stage Renal Disease.
Source: Medicare.gov.
Tags: Medicare
The New Health Dialogue blog hosts a Halloween-themed Health Wonk Review. Check it out!
Tags: HWR
Why are hospitalization rates so high for Medicare beneficiaries living in long-term care facilities (i.e., skilled nursing facilities, nursing facilities, and assisted living facilities)? The first reason is obvious: they are sick. If they weren’t, they wouldn’t need to be living in these facilities in the first place. Hospitalizing sick patients is often necessary. Unnecessary hospitalizations, however, can have adverse affects on patient outcomes. For instance, unnecessary hospitalizations:
- Can be physically and emotionally hard on frail patients (e.g., disorientation),
- Hospital treatment records are rarely passed on to the LTC after patient discharge, and
- Hospital physicians often prescribe patients new medications without consulting the LTC facility staff.
So why do LTC facilities send so many patients to hospitals unnecessarily? The reason is basically that they have lots of incentives to do so and none not to. According to this series of interview conducted by the Kaiser Family Foundation, here a breakdown of LTC facility incentives to hospitalize.
Incentives
- Limited on-site capabilities to deal with serious medical issues,
- Reduces liability concerns (i.e., defensive medicine)
- Allows for more timely diagnostic work,
- Is more convenient for physicians (especially during weekend and nighttime hours),
- Preference to send residents to hospital to die to avoid disrupting facility staff and other residents,
- Is financially beneficial for the physician and facility.
Disincentives
- None
As an economist, I of course focus in on the financial incentives. Some quotations from the report:
- “In the hospital, I am billing every day that [my patient] is there.”
- “While in the hospital, I would be able to do procedures [on the long‐term care facility resident], which is billable, which is what puts the cost all the way up there.”
- “As long as [the doctor] is treating them [in the hospital], they’re making money.”
Facilities can also earn money since when the residents return to the facility, they are eligible for skilled nursing care (SNF) which is reimbursed by the more generous Medicare. Standard residential nursing facilities are paid for by Medicaid which is less generous. In addition, facilities can earn money through bed holds.
- “The [facility] is getting a bed‐hold on a lot of them. The patient is not in the building, they are not caring for them, and they get money [for the patient] every day.”
Solutions
In summary, physicians and facilities have lots of incentives to send patients to inpatient care facilities, and very few not to. How do we change this? The KFF report offers some suggestions:
- More training and reduced staff turnover will improve the ability of facility staff to handle a variety of medical situations without hospitalizations. More training, however, increases the cost of SNF care. Medicare may need to increase reimbursement rates to encourage LTC facilities to incur this extra expense. It may be worth the cost to do this, however, if hospitalizations decrease significantly. If facilities pocket the extra cash, but do not change behavior, then the money will have been wasted.
- Despite physician aversion, more medical support to back up facility staff during late night and weekend shifts would provide the manpower to reduce hospitalizations. Physicians are expensive, however, so the increased cost from physician or nurse practitioner hours must be less than the expected cost decrease from reduced hospitalizations.
- Review financial incentives of physicians and facilities. And the economist always comes back to financial incentives.
Source:
- Kaiser Family Foundation, “To Hospitalize or Not to Hospitalize? Medical Care for Long-Term Care Facility Residents.” Publication Number 8110, Oct 12, 2010.
Tags: Hospitalizations, Long Term Care, Skilled Nursing Facilities
Medicare spends a lot of money on beneficiaries living in nursing homes. How expensive are these beneficiaries:
- Six percent of Medicare beneficiaries spend some time in a long-term care facility, but these same beneficiaries make up 17% of total Medicare cost.
- Three percent of Medicare beneficiaries spent an entire year in a long-term care facilities. These beneficiaries make up 5% of all Medicare cost.
- Of these 3% of these of Medicare beneficiaries who spent an entire year in a long-term care facilities, 41% where in the top quartile of spending and 17% were in the top decile.
- Among beneficiaries who spend time in a LTC facility, but died before the end of the year, 69% of beneficiaries ranked in the top spending quartile and 31% in the top Medicare spending decile.
- Thirty eight percent of beneficiaries living in a LTC facility were admitted to a hospital at some point during the year. Over half (51%) of LTC residents had at least one emergency room visit.
So Medicare beneficiaries in long-term care facilities are expensive…who cares? These beneficiaries are also likely sicker than other patients and need this skilled care. Further, they would cost Medicare more money than a typical patient regardless of where they live.
Although LTC residents are expensive, much of their cost could be avoided. According to a KFF report, 24 percent of all hospitalizations for long‐term care facility residents in 2006 were potentially preventable. In particular, “greater attention to transitions to and from the hospital could also help to minimize costs associated with preventable complications.”
Source:
Tags: Expenditure, Long Term Care, Medicare, SNF
Under Medicare Part A, beneficiaries can receive coverage for care provided by skilled nursing facilities (SNFs), also known as nursing homes. Between 2000 and 2007, however, the rate of potentially avoidable re-hospitalizations for five key conditions (congestive heart failure, respiratory infection, urinary tract infection, sepsis, and electrolyte imbalance) increased from 13.7% to 18.5%. One potential explanation for this increase is that Medicare reimbursement policy may incentivize SNFs to transfer patients to acute impatient care. Today, I examine a Kaiser Family Foundation brief which examines these SNF incentives.
Background
A SNF is a long-term care facility providing skilled care. This is different from general nursing facilities (NF) who provide custodial rather than skilled care. Medicare pays for most SNF care whereas Medicaid is the primary payor for most NF care. All SNF Part A inpatient services are paid under a prospective payment system (PPS). In the PPS, providers receive a daily base rate which is adjusted for case mix. “Assignment to a RUG is based on a number of considerations, such as the patient’s need for certain services, the presence of certain conditions, and an index based on the patient’s ability to perform independently four activities of daily living.” SNFs can earn extra revenue through bed holds and reserved bed arrangements. In the bed hold scenario, residents transferred to an inpatient facility pay the SNF to keep the same bed. States regulate bed holds. For instance, California mandates that a bed must be held for 7 days while Wisconsin mandates a minimum bed-hold of 15 days. Additionally, impatient facilities may reserve beds. This way, the hospital will guarantee placement of their discharged patients.
Care is provided by a number of different provider types, but Medicare mandates that “each resident must be seen by a physician at least once every 30 days for the first 90 days after admission, and at least once every 60 days thereafter.”
There are two types of models for SNFs and NF. In a closed staffing model, the facility directly employs the physician and pays them a salary. In an open staffing model, community physicians care for residents.
The remainder of this post will examine how certain Medicare payment policies may or may not encourage SNFs to send residents to acute care facilities unnecessarily.
Read the rest of this entry »
Tags: Long Term Care, Medicare, SNF
- Minimum health Wage: $5.89.
- Best States for Business.
- Pharma pays docs to push their drugs.
- Feer the Deer.
- Cost of Freddie/Fannie bailout doubles.
Tags: Links
The California Health Care Foundation (CHCF) reviews how California’s safety net residents receive medical care. Safety Net patients are considered those who have incomes below 300% of the federal poverty line. Below is a list of governmental and non-governmental programs which serve California Safety Net residents.
- State: Medi-cal (California’s Medicaid program) and Healthy Families (California’s CHIP program)
- County: Medically Indigent Adult (MIA) programs
- Episodic: breast and cervical cancer treatment Program, Child Health and disability, Prevention Program, Expanded Access to Primary care, Family PACT, and California Children’s Services (CCS)
- Low-income, non-government insurance: California Kids, Kaiser Permanente Cares for Kids, Healthy Kids.
This graph shows public program eligibility by poverty level for different types of residents. These eligibility levels are from 2009 and will change once health reform is implemented. In particular, Medi-Cal will be extended to more individuals.
One interesting point is that while adults with children are currently eligible for Medi-Cal if their income is below the poverty line, adults without children can only receive subsidized medical services through county programs.
- California Health Care Foundation “California’s Health Care Safety Net: Facts and Figures” October 2010.
Tags: CHIP, Indigent, Medi-Cal, Medicaid, Safety Net
The Consumer’s Union used Medicare.gov to show that many people could save $3,500-$5,000 by switching to generics. Why don’t more people do so? One reason is the long delays for FDA approval of generics. The FDA’s Office of Generic Drugs is understaffed and thus generic drug approvals takes much longer than it should.
Brand name pharmaceuticals pay user fees to the FDA to speed up approval time. Is this a good idea to apply for generics as well?
A Consumer Reports (Nov 2010) editorial states the following:
“In general, we oppose user fees that allow a regulated industry to fund the regulators. A government agency can become dependent on the companies it’s supposed to objectively regulate , which can influence decision. In a 2006 survey…many FDA employees said they felt pressured to hastily and perhaps improperly approve user-fee drugs. And at least one felt the agency viewed industry, not the American public, as its client.“
Tags: FDA, Pharmaceuticals, Regulation
The latest edition of the Cavalcade of Risk is up at Julie Ferguson’s Workers’ Comp Insider.
Tags: CoR
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