Unbiased Analysis of Today's Healthcare Issues

Medicare spending for beneficiaries receiving long-term care

Written By: Jason Shafrin - Oct• 26•10

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.”

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One Comment

  1. James Wesp says:

    I feel the information in this article is a bit misleading. I believe I know what the author is trying to say, however, Medicare will only cover 100 days of Skilled care per spell of illness after a qualifying 3 day stay in a hospital in any one year coverage period. Only if the patient has a new spell of illness with a different diagnosis would Medicare pick up the cost, again, with coverage limits as described. Being in the industry for 32 years, I have never experienced Medicare covering anyone at a skilled level of care (nursing home) for an entire year. While I believe the author is referring to annual cost of care per beneficiary, it doesn’t some across that way. Thanks.

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