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Nursing Homes Aim To Cut Billions Spent On Hospitalizations

Registered nurse Terri McClinton is tasked with keeping track of patient's health at North Capital nursing home in Indianapolis.

If you have an elderly loved one who lives in a nursing home, you’ve probably experienced this situation: your loved one gets sick and he’s transported to a hospital for a few days for treatment and then brought back to the nursing home.

Data shows in nearly half of these cases, the elderly person could be treated in the nursing home and wouldn’t have to go to the hospital.

Nursing Homes Treat More Patients In Their Facilities

When registered nurse Terri McClinton makes her rounds at North Capitol Nursing Home in Indianapolis she looks for any condition changes—even if it seems minor.

Her mentality is if she can catch a problem early, she can work to treat it and keep a resident from being transferred to the hospital.

“A lot of the things they do there in the hospital can be done here,” McClinton says. “I had a case where a resident did have elevated labs and we did sit down and we called the doctors and we convinced him to just give a few days of IV fluid treatments and she felt better in a few days.”

If someone is acutely ill, then McClinton will call the person’s doctor and in those cases the resident would likely be transferred to a hospital.

This effort is part of a pilot program called OPTIMISTIC.

Pilot Program Seeks To Save Medicaid, Medicare Dollars

IU Center for Aging Research investigator Dr. Kathleen Unroe says the goal is to see if this type of proactive caregiving –looking for condition changes early – can make a difference in the number of unnecessary hospitalizations.

“OPTIMISTIC, our intervention, is designed to put these extra resources in nursing homes, see what kind of difference we can make in providing enhanced care,” Unroe says. “Geriatric patients hospitalized are at risk for all kinds of bad things: delirium, dementia, risk of falls, these are complicated patients and the hospital is a risky place for frail older adults. When they come back to the facility, there’s an almost certainty they will have a reduced level of functioning, less strength, and need rehabilitation.”

The Centers for Medicaid Service is partnering with 145 nursing facilities in seven states to implement the trial program. Nineteen of those nursing homes are in Indiana.

Each Indiana facility gets a registered nurse like McClinton and there’s a shared pool of nurse practitioners who visit the facilities and help fill in gaps.

“The 19 facilities we partnered with were already working on reducing avoidable hospitalizations. That’s important because it’s a big deal for them to accept an outside person coming in and jumping into their team, talking about doing things differently, trying this or trying that,” says Unroe. “So it’s important that they were already interested in this outcomes. In line with their priorities.”

“With the push of the industry to decrease hospitalizations we certainly want to be on the front end of innovation frankly and get on board with that,” says Toron Jackson-Kenny, the executive director of North Capitol Nursing Home where McClinton works.

The Affordable Care Act mandates nursing homes develop plans to improve health care quality and reduce Medicare and Medicaid costs. Reducing avoidable hospitalizations figures into that.

Figures from 2011 show unnecessary hospitalizations each year among Medicare and Medicaid patients cost between $7 billion and $8 billion.

How Nursing Homes ‘Double Dip’

The reason these avoidable hospitalizations cost so much is complicated.

According to Unroe, Medicaid pays the day to day nursing home rate for most long term nursing home residents.

When someone is hospitalized, Medicare kicks in and pays for the bulk of their acute care.  If the nursing home resident is in the hospital for three days or more, they’ll be able to access what is called the Medicare Post Acute Care Benefit after they go home to the care facility.

The Medicare Post Acute Care Benefit reimburses nursing homes at a much higher rate than the Medicaid daily rate.

The rationale is that a person might require skilled services like therapy after a hospitalization.

“A lot of the discussion about why transfers happen from the perspective of federal policymakers is that the financial incentives are misaligned and encourage facilities to send residents outs,” Unroe says. “It’s certainly more complicated than that, but that is the thought that there are misaligned financial incentives that contribute to this problem and that the federal government is going to change these incentives in some way to try and favor treating people in nursing homes.”

Unroe says the big question is whether nursing homes have the ability to provide those extra resources even if they want to.

That of course, is what the pilot project does.

If it’s successful, Unroe says part of what the government might do when it restructures the financial incentives, is look at adding additional resources in nursing homes on a permanent basis.

The grant for the project runs for four years. It’s been about a year and a half.

It is too early  to determine whether the program is a success or exactly how much money it has saved, but Jackson-Kenny says at her facility there has been a notable decline in unnecessary hospitalizations.

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