Managed care's skilled nursing legacy: creativity or just The Big Squeeze?

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James M. Berklan
James M. Berklan

The vision of a rough shaven wild West gunslinger comes to mind. A dirty-faced bandit who shoots up the floor under someone's feet, just to see him jump.

The resulting leaps for life could, most charitably, be called a dance. Forced creativity, delivered at the end of a loaded gun.

Can we think of what's happening to nursing homes at the hands of managed care companies any differently?

They poke and prod, and squeeze and push, forcing providers to change the way they operate, with the threatening sword of Damocles figuratively hanging over head.

Now, a new study points out that decreasing lengths of stay (LOS), which are compelled largely by managed care and other group entities, are playing havoc with traditional long-term care operations. The pressure to create even shorter lengths of stay has sometimes led providers to discharge patients prematurely.

In addition, charges are increasingly shifting to the individual, and skilled nursing providers are incurring more non-reimbursable costs because they feel pressured to create and staff more oversight positions.

In other words, beneficiaries pay more, providers pay more. Managed care companies breathe heavy and pick everyone else's pocket, sometimes putting individuals at risk. The flow of dollars extracted from skilled nursing as lengths of stay have sunk has been huge.

As Harvard researcher and MedPAC commissioner David Grabowski insightfully put it: “Post-acute care is the ATM of value-based healthcare. Everyone is trying to take money out of PAC.”

To soften the blow, or at least not stick out from the crowd, providers have become creative, as researcher Denise A. Tyler, Ph.D., notes. She and colleagues undertook the study “Challenges and Consequences of Reduced Skilled Nursing Facility Lengths of Stay,” which was published this month by Health Services Research and the Health Research and Educational Trust.

They conducted 70 interviews with administrators, admissions coordinators and directors of nursing at 25 skilled nursing facilities around the U.S. The goal was to examine the impact of significantly reduced lengths of stay for SNFs and their post-acute residents.

Their findings revealed a big gulp from already challenged providers: more complicated re-authorization processes, pressure to send patients home sooner and weaker, greater caregiver stress, and a rise in non-reimbursable costs.

One of the good outcomes of the extra stress has been various patient tracking and follow-up programs that providers have created, Tyler said. But even that's not a 100% a feel-good: Providers have incurred additional time, labor and other soft costs to put up with increasing demands.

Perhaps worst of all, the researchers' candid interviews uncovered providers admitting they are avoiding certain patient populations altogether in order to be more profitable. Excerpts from some of the provider interviews are startling for their frankness and skepticism about how providers view the managed care vice grip. 

A lot of the “new” reality has been fueled by the monster growth of the Medicare Advantage program, which now covers about one-third of all Medicare beneficiaries. That would seem to indicate there's no turning back now. 

And that there's a big bandit in the room. With a really big gun.

Follow Editor James M. Berklan @JimBerklan.


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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.