You’ve just had your hip replaced. The doctor comes into your hospital room two days after the surgery, looks at the wound, and pronounces you ready for discharge. You look at him incredulously and reply that you can barely get out of bed on your own. How are you going to manage caring for yourself? You remind him that your brother had the same operation just ten years ago and he was in the hospital for 2 weeks. Or perhaps your mother was discharged after 4 or 5 days and then went to rehab for another 7 to ten days.
He nods at you, smiles, and says that the case manager has told him that you no longer qualify for hospital level of care. He apologizes and then excuses himself from the room. Your hip throbs, the wound drains and you’re left feeling abandoned. How can this be happening?
It’s happening because the insurers have reached a point where they realize that in order to control spiraling healthcare costs, they need to limit the monies spent on expensive, acute, in-patient stays. This also started back in the 1990’s when some insurers began to experiment with care paths. These were algorithms developed by medical and surgical specialists to try to determine how long it should take to complete treatment for different diagnoses. Cardiologists tried to judge what the vast majority of heart attack patients should require for recovery. Orthopedists evaluated the amount of recovery time that a typical surgical procedure should require.
These endeavors were undertaken because insurers looked at their data and found that there was wide variation in how long people spent in the hospital with different diagnoses. Sometimes the variation was dependent on the regional area where they were treated. Sometimes it was based on the age of the individual. But even taking similar patients from the same region the variations could be substantial from one provider to the next.
As a result of implementing care paths, lengths of stay began to drop. So that family member who had an operation done 10 to 20 years ago and was in the hospital for 2 weeks, now, using the care paths, would only qualify for 4-5 days of treatment in the hospital. Anything in excess, the hospital wouldn’t be paid for. And for some time this was the best that insurers could do.
But there was still variation from hospital to hospital and from one provider to another. Some claimed that their patients were just sicker than those in other institutions. Or that they had more treatment options. So insurers decided to take a different tack. This initiative was spear-headed by the Affordable Care Act. As the government began to consider the costs associated with increasing the number of insured individuals, they began to explore further ways to cut costs.
They didn’t need to look any further than the experiments HMO’s had done with tiering physicians, to curb their costs. They presented the concept of value based purchasing. Basically they said that they were going to compare hospitals with their peers. Those whose care was more expensive were going to have to pay money back to the insurer, if their costs proved to be higher than their competitors. However if their costs were lower they would get a bonus payment. But fearing that some institutions would start inappropriately limiting care, they put in certain quality measures. So, for example, if you had patients discharged too early, leading to readmission to the hospital within 30 days of discharge, you would be penalized for this. And hospitals could be penalized for other things as well, including, but not limited to, the number of infections that patients developed in the hospital, the number of deaths that occurred in the hospital and the surgical complication rates.
So hospitals are now incentivized to get patients out of the hospital sooner rather than later. Even if the amount of time in the hospital is less than the experts would have predicted, based on previously developed care paths for a certain diagnosis.
But if this value based purchasing was introduced by the Affordable Care Act, can’t we simply repeal the Act and go back to things the way they were before? Unfortunately not. As commercial insurers saw this concept developing they were quick to jump on the band wagon. So this method of having hospitals competing against each other is now the norm and, unfortunately, here to stay.
So if your perception is that it feels like you’re getting the bum’s rush out of the hospital, without adequate time to recover, it may be more than a perception. But how do hospitals keep patients from returning to the hospital prematurely? Or from dying prematurely? This conundrum has resulted in the emergence of nursing homes morphing into rehabilitation facilities and in home health care businesses becoming more robust. But does this simply kick the can down the road; simply causing increased costs to appear in different health care sectors? And are they subject to the same pressures that the hospitals now face? Tune in next time and we will discuss this.