To Curb Spending On Elderly, Hospitals Try New Business Models

by | Jun 5, 2012

From: Kaiser Health News

Believe it or not, there is a silver lining to the massive storm cloud that is Medicare’s spiraling health care costs.

The storm cloud, of course, is the out-of-control spending on health care for the elderly. For instance, more than 13 percent of all federal spending goes toward Medicare. Two thirds of that spending goes to the sickest 20 percent of Medicare beneficiaries, the ones with multiple chronic health conditions.

But the silver lining is that the problem’s gravity is inspiring many doctors, researchers and hospital administrators to conjure outside-the-box business models that could rein in these costs.

One of the people brainstorming ideas is Dr. Bruce Leff, a geriatrician and health researcher at Johns Hopkins University. In a study published today in the medical journal Health Affairs, Leff writes about how he worked with a handful of organizations across the country — ranging from a stand-alone hospital to a health care system with multiple nursing and hospice facilities — to implement six models of caring for seniors that have been shown to lower costs and improve care.

Leff and his team of researchers provided the hospitals with training to implement the models and then let them choose which ones they wanted to try. The different models ranged from a program that helps seniors maintain functional independence after discharge from a hospital to another that provides a “transition coach” to help seniors move from hospital to home.

One of the distinctive aspects of Leff’s study is that the health care providers used multiple cost-reduction models. something he said that is not often done. “If you can start to put these things together, they present some economies of scale,” Leff said. “It becomes greater than the sum of its parts.”

A model called Nurses Improving Care to Healthsystem Elders, or NICHE, was a clear favorite among the hospitals participating in the study, Leff said. Under that model, nurses are given more responsibility and training to watch out for things that commonly lead to complications among seniors, such as catheter infections or delirium, he explained.

Another model, called Hospital at Home, was a clear loser in Leff’s study — few hospitals even attempted it. Under this approach, which Leff helped develop, seniors receive acute care in their homes, rather than at a medical facility. The approach has been shown to reduce costs and lead to better patient outcomes. But, he said, Medicare won’t pay hospitals for delivering such care.

“Right now hospitals make money by filling beds,” Leff said. “If I go to hospital president and say, ‘I’ll do a patient’s care at home,’ Medicare doesn’t pay for that. It’s hard for them to give up revenue in that way.”

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