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Does Public Reporting Affect Patient Behavior?

May 7, 2012 in Nursing Home, Nursing Homes, Quality | No comments

A number of studies have already examined this question.

  • Baker et al. (2003) examined the effectiveness of a public reporting effort in hospitals in Ohio, finding little relationship between a hospital’s report card ranking and changes in its market share.
  • Cutler et al. (2004) examined the effects of reporting quality information about cardiac surgery on hospital volume, finding that being identified as a high-mortality hospital was associated with a decline in the number of cardiac surgery patients at that hospital in the period following the designation.
  • Dafny and Dranove (2008) examine the influence of Medicare HMO report cards…showing that highly ranked plans were gaining market share prior to the report cards’ release but that the report cards led to further gains in market share for high-scoring plans.
  • Chernew et al. (2008) use a Bayesian learning model to estimate enrollees’ general assessment of plan quality prior to the release of report cards and the changes in these assessments over time. They find that the addition of publicly reported plan information has a small incremental effect.

A more recent study by Werner et al. (2012) examines whether Medicare’s Nursing Home Compare website affects consumer decisions. Nursing Home Compare evaluates nursing homes using a variety of factors including: 1) whether they passed inspections, 2) structural measures such as staffing ratios, 3) quality measures reported on MDS assessments.

The authors find “a very small (though statistically significant) demand response to public reporting.”  Skilled nursing facility (SNF) market share experienced a 0.1% increase in market share in cases where the facility increased its reported quality of treating patient pain from the 25th percentile SNF to the 75th percentile SNF.

Werner et al. note that this small economic response implies that SNFs are unlikely to invest in quality improvement since improving quality will not increase market share and improve profits.

One shortcoming of the study is that it only focuses on SNFs.  Since Medicare uses SNFs for shorter term post-acute care, the study cannot identify changing consumer responses for long-term nursing stays.  Because the time the patient spends in long-term nursing homes is typically much longer than SNFs and because patients typically have more time to review their long-term nursing home options than would be the case when they enter SNFs, it is more likely that a consumer response would be observed in the long-term nursing home setting.

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The Decline of Mental Hospitals, 1950s

April 27, 2012 in Mental Health, Mental Illness, Nursing Home, Nursing Homes | No comments

The movement of mental health care from mental hospitals to treatment in outpatient settings and nursing homes  began in the 1950s.  Here is how it happened.

“The field of medicine where the ‘rediscovery of community’ found an immediately welcome reception was mental health services.  A movement away from mental hospitals had already begun in the mid-1950s.  The national census of mental hospitals declined from a peak of 634,000 in 1954 to 579,000 by 1963.  The predominant, though contested, explanation for the drop is that the discover and introduction of major tranquilizers (e.g., Thorazine) was the decisive event.  Patients who were previously hospitalized could now be safely treated, or at least more safely ignored, on an outpatient basis.  Another interpretation points to the adoption by Congress in 1956 of amendments to Social Security that provided greater aid to states to support the aged in nursing homes. Mental hospitals had been filled with unwanted older people suffering only from a harmless senility.  By transferring such patients from mental hospitals to nursing homes, the states could transfer part of the cost of upkeep to the federal government.  Probably both drugs and nursing homes had some effect on the decline of mental hospitalization.”

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Why don’t patients care about quality?

October 10, 2011 in Nursing Homes, Quality | 6 comments

For nursing homes at least, patients do not seem to have much choice.  According to an article by Grabowski and Town:

The introduction of the NHQI was generally unrelated to facility quality and consumer demand. However, nursing homes facing greater competition improved their quality more than facilities in less competitive markets…The lack of competition in many nursing home markets may help to explain why the NHQI report card effort had a minimal effect on nursing home quality. With the introduction of market-based reforms such as report cards, this result suggests policy makers must also consider market structure in efforts to improve nursing home performance.

In general, there are many reasons why patients do not respond to provider report cards.  It could be the case that the provider is a monopoly, and thus the patient has little choice of providers.  Alternatively, patients may not be aware of the quality metrics.  One would thing that high quality providers, however, would spend money advertising their high quality ratings to make patients aware of their services.  In other cases, the patients may not be the ones directing care choices.  Providers may be the ones who are the de facto selectors of care.

Patients could also not believe that the CMS quality ratings are very useful.  They may prefer other sources of information on medical quality such as their friends, relatives, or physicians.  Thus, it may be the physician who actually chooses to which nursing home the patient will go.  If the physician has incentives to sent the beneficiary to nursing homes in the network or simply does not wish to spend the time analyzing nursing home quality, then patients may be less likely to be allocated to high quality nursing home.

 

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Skilled Nursing Facilities

July 11, 2011 in Nursing Homes, Supply of Medical Services | 4 comments

Today I summarize recent trends in skilled nursing facilities (SNFs) as outlined in MedPAC’s 2011 Report to Congress.

SNFs furnish short-term skilled nursing and rehabilitation services to beneficiaries after a stay in an acute care hospital. These services include physical and occupational therapy and speech–language pathology services. Examples of SNF patients include those recovering from surgical procedures, such as hip and knee replacements, or from medical conditions, such as stroke and pneumonia.

Most SNFs are part of nursing homes that furnish long-term care, which Medicare does not cover. Medicaid finances mostly long-term care services provided in nursing homes but also covers copayments for dual-eligible beneficiaries who stay 21 or more days in a SNF. Medicare-covered SNF patients are typically a small share of a facility’s total patient population but a larger share of the facility’s payments.

In 2009, 15,068 SNFs furnished covered care to just under 5 percent of fee-for-service (FFS) beneficiaries (1.6 million). In fiscal year 2010, Medicare spent $26.4 billion on SNF care. Medicare covers up to 100 days of SNF care after a medically necessary hospital stay of at least three days

Three-quarters of beneficiaries live in a county with five or more SNFs, and less than 1 percent live in a county without one. Available SNF bed days increased 4 percent between 2008 and 2009. However, since 2004, the share of SNFs admitting medically complex patients decreased.

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Maximizing utility for end-of-life care

June 20, 2011 in Hospitals, Nursing Homes | 1 comment

Hospitals in Sacramento were concerned about the large number of nusring home transfers to its facility.  Were many of these tranfers unnecessary? Did patients with little chance of recovery benefit from these hospital stays?

To reduce end-of-life tranfers to hospitals from nursing homes, 3 Sacramento-area hospital systems and 18 nursing homes instuted the Preparing Residents for End-of-Life Plans and Respecting Endof-Life Decisions (PREPARED) project.  In the project, the hospital systems provided clinician educators with expertise in end-of-life care to work part of their time each week in nursing homes. The PREPARED intervention included provided advance care planning (ACP) education to patients as well as nursing home staff and administrators.

The study found that the initiative decreased hospitalization rates, increased nursing home as the the site of death, and improved perceptions of quality of care by family members.

How do family members perceive quality of care? The study shows that family members prefer the more intimate setting of a nursing home to a hospital, but this preference is likely conditional on a fixed death date.  By this I mean that if a family knew there loved one would die with certainty on a given date, the nursing home would be the preferred setting. If hospital care could extend the patient’s life, however, (i.e., more realistically not conditioning on death date) then family members may prefer to send their loved one to the hospital even though it is a less intimate setting.  A lot of these preferences may have to do with provider education. Providers who tell family members that their loved one has a chance (albiet small) of recover may be more likely to go the hospital route than those whose providers tell them there is basically no chance of recovery.

Further, most people would rather commit an error of commission than omission.  For instance, by not sending a loved one to the hospital, family members may feel guilt that they didn’t do all they could to save the patient.  However, sending the loved one to the hospital has its own risks (hospital acquired infections, complications, medical errors), but it seems that generally family members feel less guilty about death due hospital-related care.

Thus, although the study shows that family members are more satisfied when their loved one dies in a nursing home compared to a hospital, I do not believe that this is strong evidence of a long-term trend towards less hospitalization of terminally ill patients.

Source: Kathy Glasmire and Kathleen Kerr. Be Prepared: Reducing Nursing Home Transfers Near End of Life. CHCF, March 2011.

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MedPAC’s Analysis of Inpatient Rehabilitation Facilities

May 23, 2011 in Medicare, Nursing Homes, Supply of Medical Services | No comments

Inpatient Rehabilitation Facilities (IRF) provide rehabilitation to invidiuals recovering from serious illnesses such as strokes or hip replacements.  Today I review MedPAC’s analysis of Medicare payment policies for IRFs.

In 2002, expenditures on IRF totaled nearly $5.7 billion. This figure grew at an annual rate of 6.7 percent to $6.4 billion in 2004. Between 2005 and 2009, however, fell to about $6.1 billion aggregate FFS expenditures for IRFs fell as more beneficiaries enrolled in Medicare Advantage plans and as facilities adjusted to comply with a “compliance threshold.” The compliance threshold aims to distinguish IRF from regular acute care hospitals. [Enforcement of compliance threshold in place from 1984-2004 was suspended between 2002-2003, but in 2004 CMS revamped the threshold by: 1) by increasing the number of conditions that count toward the threshold to 13; 2)mandating that only a subset of patients with major joint replacement would count toward the compliance threshold; and 3) consistently enforcing IRFs’ compliance with the threshold.]

MedPAC notes that payments per case have grown faster than costs per case since the implementation of PPS in 2002. In 2009, IRF margins were 8.4 percent.

To become an IRF, a facility must:

  • Have a preadmission screening process
  • Ensure patient receives various services (e.g., physical, occupational, rehab therapy; social services; prosthetic services)
  • Use interdisciplinary approach with nurse, social worker and/or therapist
  • Meet compliance threshold: no fewer than 60 percent of all patients admitted to the IRF must have at least 1 of 13 conditions,
  • Initiate therapy within 36 hours after admission

Eighty percent of IRFs are hospital-based and 20 percent are freestanding facilities.

Most IRF cases are for stroke, fracture of a lower extremity (e.g., hip), joint replacement, debility, neurological disorders, or brain, cardiac or spinal cord injuries.

There were approximately 360,000 Medicare fee-for-service (FFS) cases in IRFs in 2009.  Relatively few Medicare beneficiaries use IRF services because IRF patients must be able to tolerate and benefit from intensive rehabilitation therapy, which typically consists of three hours of therapy per day for at least five days per week.

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State Adoption of Nursing Home Pay-for-Performance

January 31, 2011 in Nursing Homes, P4P | No comments

On the importance of Nursing homes:

“More than 1.5 million people reside in U.S. nursing homes at a cost of more than $120 billion per year (Kaiser Family Foundation, 2007). Medicaid is the majority payer of nursing home services, giving indigent people access to nursing home care by directly reimbursing facilities for the care of Medicaid-eligible residents…State Medicaid programs are responsible for approximately half of all nursing home spending, and Medicaid residents constitute 65% of all bed-days.”

As nursing home expenditures have taken up a larger and larger share of expenditures, a number of State Medicaid Agencies have instituted pay-for-performance requirements (P4P).  A paper by Werner, Konetzka and Liang (2007) evaluate some of these P4P efforts.  A total of 15 states had planned or existing nursing home P4P programs when this article was published.

Here is a map of all the states who have initiated P4P programs for Nursing Homes.

“Financial rewards in nursing home P4P are based on a variety of different quality measures , including traditional measures such as staffing, regulatory deficiencies, resident satisfaction, and clinical quality and less traditional measures such as occupancy, efficiency, Medicaid use, and culture change. Most use at least 4 different categories of measures, and none uses less than 3.”

The following table summarizes the types of quality measures used in state nursing home P4P programs.  This table lists specific clinical measures used for P4P.

High performing nursing homes generally receive a financial reward for their status.  Most states use a per-diem add on as a reward for high performance.  One state, Vermont, gave flat-rate bonuses to up to 5 facilities that met predetermined quality thresholds.  This table summarizes the level of payment in selected state nursing home P4P programs.

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Value-Based Purchasing in Nursing Homes

December 13, 2010 in Medicaid, Medicare, Nursing Homes, P4P | 1 comment

More than 3 million frail and disabled individuals rely on nursing home services in any given year.  About half of these individuals consider the nursing home to be their primary place of residence.  Nursing home quality, however, has often been called into question.

Some experts believe pay-for-performance schemes will improve nursing home quality.  Today, I will review previous efforts to improve nursing home quality though P4P.

Briesacher et al. (2009)

A paper by Briesacher, Field, Baril and Gurwitz review P4P in nursing homes in a variety of states.   The authors note that “Approximately one-half of all Medicaid Programs currently operate some type of pay-for-performance program, and 85 percent have plans to do so within 5 years.”  This report consider nursing home P4P programs in: California, Colorado, Florida, Georgia, Illinois, Iowa, Kansas, Massachusetts, Minnesota, Ohio, Oklahoma, Texas and Utah.

Measures considered include:

  • Clinical Measures (e.g., pressure sores, use of physical restraints, pain management, quality of life, MDS indicators, state-developed CAHPS measures, care plans)
  • Satisfaction Levels (e.g., patient, family, employees)
  • Structural Measures (e.g., nursing retention, staff turnover, occupancy rates, special licensure, state survey compliance, staffing hours/ratios)
  • Cost (e.g., Medicaid utilization, administrative costs, efficiency)
  • Pressure sores,
  • Use of physical restraints,
  • Pain

Bonuses were paid depending on whether the nursing homes surpassed some threshold of these quality measures.  Some of the bonuses were paid as a flat rate ($3/day in Ohio and $0.50-$0.0 in Utah) and other used a percentage increase (up to 2.4% in Minnesota, 1%-3% increase in Iowa).  The highest bonus paid was 5% of per diem reimbursement where the lowest bonuses were $0.25.

“We found little empirical evidence that pay-for-performance programs increase the quality of care of residents or the efficiency of that care in nursing homes. However, the program set in San Diego did find benefits, and it used the strongest of all evaluation designs, a randomized control design.” The San Diego RCT randomized nursing homes into treatment and control groups and gave the treatment groups incentive payments for: (i) accepting patients needing the most functional assistance, (ii) improving patient functional status, and (iii) prompt discharges of patients who remained out of the facility for at least 90 days.

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Medicaid and Long-Term Care Services

November 17, 2010 in Medicaid, Nursing Homes | 1 comment

The increased use of long-term care (LTC) services has been one of the forces increasing health care cost and utilization.  Currently, 10.3 million Americans use LTC services.  The Kaiser Family Foundation provides a summary of LTC Services and Supports in the U.S.

Who uses LTC?

One can divide LTC services into those who receive care in the community (a.k.a at their home) compared to those who are institutionalized in a nursing home.  The vast majority of individuals receiving LTC services are community based (8.8 million) and these individuals are roughly divided equally between the elderly (4.6 million) and non-elderly (4.2 million).  Nursing home residents, on the other hand, are mostly elderly (87% of the 1.5 million nursing home residents).

Elderly individuals often require assistance from the symptoms of diseases such as Alzheimer’s, diabetes, pulmonary diseases, and other severely disabling chronic diseases.  Many children also require LTC services.  Examples include children with mental retardation, developmental disabilities (e.g autism), spinal cord injuries, traumatic brain injuries, and serious mental illness.

These individuals receive services that “range from providing assistance with eating, dressing, and toileting, to assisting with managing a home, preparing food, and medication management.”

Who pays for LTC?

In 2008, LTC services cost $177.6, of which $124.9 billion was spent on nursing home care.  “Nursing home care averages $70,000 per year, assisted living facilities average $36,000 per year, and home health services average $29 per hour.”

Although Medicaid pays for the largest share of services, benefit eligibility is limited. Eligibility for Medicaid nursing home benefits are often tied to SSI eligibility. “Additionally, elderly and disabled individuals who qualify for Medicaid must have very few assets ($2,000 for an individual and $3,000 for a couple, in most states).” Some states exclude home equity in this asset maximum while others do not.

What Does Medicaid Provided
“Over 3 million individuals, or 7 percent of the Medicaid population, rely on Medicaid long-term care services for a range of physical and mental health care needs. Over half of those who use Medicaid long-term care services are individuals age 65 and older, but 45 percent are disabled children and adults.”

Home and community based care (HCBS) has been growing as a share of Medicaid expenditures over time.

“Spending patterns for Medicaid home and community-based services vary widely among states although demand for services in the community is growing as evidenced by the number of beneficiaries on waiting lists for home and community-based waiver services – 331,689 individuals in 33 states in 2007 – an 18 percent increase over the previous year.”

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Incentives for Long-term Care Facilities to Hospitalize Patients

October 27, 2010 in Hospitals, Medicare, Nursing Homes | 2 comments

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.

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