Three Kaiser Family Foundation Reports on Medicare Spending for Beneficiaries in Long-Term Care

Reports examine the high use of hospital and other Medicare services and costs of medical care for Medicare beneficiaries who live in long-term-care facilities.

October 13, 2010

By The Kaiser Family Foundation: 

New reports issued today by the Kaiser Family Foundation examine the relatively high use of hospital and other Medicare-covered services and the associated costs of medical care for Medicare beneficiaries who live in nursing homes and other long-term-care facilities. The reports also explore the potential for delivery system reforms to improve quality and reduce costs.

The first report found that Medicare per capita spending for Medicare beneficiaries living in nursing homes, assisted-living centers and other long-term-care facilities, $14,538 in 2006, is more than twice the average for all other beneficiaries that year. The report, Medicare Spending and Use of Medical Services for Beneficiaries in Nursing Homes and Other Long-Term Care Facilities:  A Potential for Achieving Medicare Savings and Improving the Quality of Care, documents relatively high rates of hospital stays, emergency-room visits and skilled nursing facility admissions among long-term care facility residents. It estimates that a 25 percent reduction in hospitalization rates for this group of Medicare beneficiaries alone could result in Medicare savings of $2.1 billion in 2010.

A second report, To Hospitalize or Not to Hospitalize? Medical Care for Long-Term Care Facility Residents, explores factors that appear to drive relatively high rates of hospitalizations, based on interviews with doctors, nursing-home staff and families in four cities. Key factors include liability concerns, limited onsite staff capabilities, difficulty reaching residents' physicians for care instructions on nights and weekends, better and more timely access to diagnostic tests in hospitals, and patient preferences. Physicians with patients in a long-term care facility say it is more convenient and potentially in their financial interest to see patients in the hospital, based on their understanding of coverage and payment policy. Nursing home staff and physicians say transitions create their own set of problems, because medical charts and patient information do not consistently follow the resident back to the facility from the hospital, creating uncertainty about appropriate medications and care instructions.

A third report, Financial Incentives in the Long-Term Care Context: A First Look at Relevant Information, prepared by Henry Desmarais at Health Policy Alternatives for the Foundation, reviews Medicare's payment policies as they may affect medical care for residents in long-term care environments, including a look at the financial incentives that could play a role in hospital and skilled nursing facility admissions, for this population of beneficiaries.

The three reports were released at a policy briefing this morning at the Foundation's Washington office, featuring opening remarks by Donald Berwick, the Administrator of the Centers for Medicare and Medicaid Services. Foundation Principal Policy Analyst Gretchen Jacobson and Lake Research Associates Partner Michael Perry presented research findings, and Foundation Vice President Tricia Neuman moderated a discussion on the implications of the research findings with Toby S. Edelman, Senior Policy Attorney at the Center for Medicare Advocacy; Larry Minnix, President and CEO of the American Association of Homes and Services for the Aging; and geriatrician Cheryl Phillips, Immediate Past President of the American Geriatrics Society and Chief Medical Officer for On Lok Inc. Foundation Executive Vice President Diane Rowland also provided framing remarks.

The three reports and a webcast of the briefing are all available online.

The Kaiser Family Foundation is a non-profit private operating foundation, based in Menlo Park, California, dedicated to producing and communicating the best possible information and analysis on health issues.