As Post-Acute Care Moves Away from Long-Term Facilities, Concerns Arise About Care Quality

Increasingly large numbers of nursing homes are closing each year due to provisions of the Affordable Care Act (ACA), in addition to an increased number of assisted and community-based housing options that are expanding across the country. Morningside Ministries, the subject of the article and written by Nicholas Castle, a health policy researcher at the University of Pittsburgh, is one of the 200-300 nursing home management companies that will close this year. The number of closures has remained fairly consistent over the past few years and the number of filled beds continues to decrease, with nearly one in five (18.3%) remaining empty, according to the most recent quarterly survey from the National Investment Center for Seniors Housing and Care. As nursing home utilization continues to lag due to consumer preference and cost-saving measures enacted by payors and third-party administrators, the quality of care provided may also see a decline.


Key Takeaways:

  1. The article from the New York Times states that certain provisions of the ACA have decreased the role of nursing homes in providing patient care. According to the referenced article, “under the Affordable Care Act…hospitals face financial penalties for readmissions, and some have responded by designating patients as ‘under observation’, rather than admitting them as inpatients,” (Span, 2018) which means that after those patients are discharged, Medicare does not cover skilled nursing care.
  2. An increased number of Medicare Advantage plans, which now cover approximately one-third of all Medicare beneficiaries, has resulted in “a keen interest in lowering costs” causing plans to “divert people from skilled nursing to home care,” according to Bill Kauffman, Senior Principal at the National Investment Center for Seniors Housing and Care. According to research conducted by the New England Journal of Medicine (NEJM), “in 2008, Medicare paid about $2,500 in the 30 days after discharge for each patient who received home health care, as compared with $10,700 for those admitted to a SNF and $15,000 for those cared for in a rehabilitation hospital.” (Mechanic, MBA, 2014)
  3. The industry has seen an overall trend towards hospitals beginning to designate “preferred” post-acute care partners. In their 2014 research article, the NEJM predicts that because “hospitals and physicians have considerable influence over patients’ choices of post-acute care settings…they will increasingly exert that influence under bundled-payment programs,” and “post-acute care providers…that establish preferred relationships with major hospitals and physician groups will generate additional volume and thus be able to maintain revenue levels as they shorten lengths of stay.” (Mechanic, MBA, 2014) Something to consider, however, is that a decrease in utilization and revenue of non-preferred partners, including nursing homes, may result in a lower quality of care for their residents. “The best facilities still have 100 percent occupancy and waiting lists — that’s how you know they’re good,” (Span, 2018) says Mr. Castle. Not every facility can be the best facility, however, and as the use of nursing homes declines, primary care physicians, as well as family members, need to be vigilant in ensuring that the quality of care provided to patients is maintained through new home and community-based programs.”


How can Innovista help?

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