Medicare has data on size and location of nursing homes, staffing, and summary comparisons.
Most nursing homes offer limited social structure for residents, with most interactions dominated by staff.
Medicare plans to pay Accountable Care Organizations to reduce the number of patients who go from hospital to nursing home and back to hospital within 30 days. This penalty discourages doctors both from sending patients back to hospitals and from sending risky patients to nursing homes ('You'll be better at home...").
Medicare's justification repeatedly cites a 2010 article (with 2006 data) by Mor et al. for the statement that 78 percent of re-hospitalizations from nursing homes within 30 days were potentially avoidable. The article made that statement without evidence. It said,
Furthermore Medicare gives no hint of how many of the 78% potentially preventable readmissions can actually be prevented, nor why they penalize 100%, when many cannot be prevented.
The article Medicare cites, by Mor et al., focuses on how much states differed in 2006 in the rates of readmission to hospitals, from nursing homes (and other Medicare costs). The article says (again without evidence) the differences depend on "provider norms, practice patterns, bed availability, and presence and willingness to use hospice." They ignore the most direct explanation for variation in readmission rates, which is variation in health. The traditional broadest measure of health is life expectancy, which does explain 34% of the 2006 variation in readmissions from nursing homes. The reasons why some states have short life expectancies include a mix of environmental hazards, poverty, diets and other causes, all of which drive health problems too, and the average readmission rate in those states is higher. Including household income, along with life expectancy, would raise the explanatory power to 40%.
On financial incentives Mor et al. say "skeptics have raised a range of potential issues including the increased incentives for selection of the most profitable patients, withholding of patient care, upcoding and fraud, along with the technical difficulties of case-mix adjustment and quality measurement and monitoring" and they do not address these issues.
Nursing Homes Respond to Harmful Incentives
A 2013 study found that skilled nursing facilities (SNFs) respond to incentives. Starting in 2002 nursing homes were rated on quality of care for patients who stayed over 2 weeks, but not under 2 weeks and not re-hospitalizations, so they sent more of their sickest patients for discretionary re-hospitalizations (before 2 weeks). At the same time they had fewer non-discretionary hospitalizations, which the authors suggest means "that nursing homes were avoiding admitting the sickest patients in the uncertainty of a new policy." (p.348)
Will Medicare Place Direct Penalties on Nursing Homes?
Like the penalties for hospitals, Congress penalizes skilled nursing facilities (SNFs) which have above-average rehospitalizations, starting October 2018. A major result will be giving SNFs a strong incentive to decline admission to the frailest patients, who need them most. Starting October 2019, Medicare will stop paying SNFs based on services they provide to patients, but will pay based on how sick the patients are.
Even without the penalty, "Medically complex patients ... can be hard to place" (MedPAC 6/07 p. 208 ). Some SNFs are "selective about the SNF patients they admit" (3/12 p.195) choosing those with "lower severity of illness" (6/07 p.204).
MedPAC (an arm of Congress) explicitly recommends "hospice use and the presence of advance directives" as methods to decrease rehospitalizations (3/12 p.195). They give an example, "25 facilities undertook early detection ... in-facility treatment ... and improved end-of-life care strategies (such as advance care planning and palliative care) ... savings (from fewer self-reported hospitalizations) range from 17 percent to 24 percent" (3/12 p.196)
MedPAC had recommended the nursing home penalties in their March 2012 Report
MedPAC reitereated the recommendation in March 2013
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