America has a long history of relying upon institutions to care for the at-risk elderly. "The U.S. has the largest number of nursing-home residents in the world. But families and some doctors have been reluctant to send patients to such facilities, fearing infection and isolation in places ravaged by Covid-19, which has caused more than 115,000 deaths linked to U.S. long-term-care institutions."
Since the spring, there has been a drop in the number of patients in nursing homes and similar facilities. According to the report, "[o]ccupancy in U.S. nursing homes is down by 15%, or more than 195,000 residents, since the end of 2019, driven both by deaths and by the fall in admissions."
This has created financial problems for nursing-homes, with even the biggest U.S. nursing-home company stating that it may not have the money to fulfill its financial obligations.
The shift away from institutions may be permanent. Big insurers, home-health-care companies and some hospital systems are betting the new patterns of referral and care established amid the crisis will remain in place for the long term. They say doctors, hospital managers and families have seen how some older patients with significant care needs can be sent home. Just as the pandemic has spurred greater adoption of long-considered practices such as working from home, it has brought a re-evaluation of the role of nursing homes.
“We implemented a complete switch of mind-set to say home is the default” for patients leaving the hospital, even frail ones, Peter Pronovost, chief clinical transformation officer at University Hospitals, an Ohio-based system told WSJ reporters. “I don’t think we’re ever going to go back,” he said. “The drive to get every patient home who can be home is going to continue.”
Home-health-care companies and major hospital systems, including Iowa-based UnityPoint Health and South Carolina’s Prisma Health, are building new offerings to support sicker patients recovering at home, often using technology to allow close monitoring. Also fueling these efforts are pandemic-related regulatory changes that allow Medicare to pay for digital doctor visits and intense, hospital-level care in patients’ homes.
Some nursing-home companies say they too are adjusting bulking up their own home-focused offerings and aiming to upgrade buildings and staff to capture a new group of sicker patients who might come to them for hospital-level care. Eventually, nursing-home operators say, demographics will buoy their industry, as more baby boomers require institutional care. Well before that, they say, vaccines should stem the tide of Covid-19 in their facilities.
“Do I think that more patients will be moved to home? Absolutely. It’s the right thing to do for the patient, it’s the right thing to do for the system, and it’s the right thing to do for the cost,” said David Parker, president of ProMedica Senior Care, a major nursing-home operator that also owns a home-health-care provider and is part of ProMedica Health System.
Nursing-home use in the U.S. has been declining gradually for years. In 2019, occupancy was 80%, down from 84% a decade earlier, according to the Kaiser Family Foundation.
Reduction in disability rates is helping to reduce reliance on institutional care. The non-disabled component of the Medicare-enrolled 65-and-over population has also been rising: in 1982, 74 percent of Medicare-enrolled 65-and-older individuals were “non-disabled.” That number rose to 81 percent in 2004–2005. This trend is reflected in the fact that the percentage of Medicare-enrolled 65-and-older individuals who reside in institutional settings (i.e., nursing homes) has decreased over time, to less than 5 percent in 2004–2005.
Surveys have long shown many patients don’t want to go to nursing homes. The pandemic has made them even less popular, according to a September survey of adults 40 and older by AARP. Just 7% said they would prefer a nursing home for family members needing long-term care, and 6% said they would choose one for themselves. Nearly three in 10 respondents said the pandemic had made them less likely to choose institutional care.
For years, government policies have paradoxically both encouraged and discouraged intuitional care. Certain government policies have encouraged alternatives to nursing homes. Medicaid programs, which cover long-term care for poorer adults, have increasingly paid for long-term services that help patients remain at home such as health-care aides, though funding has long fallen short of demand.
In Medicare, which typically encourages a limited nursing-home stay after a hospital visit, more people have been getting their benefits through insurance companies, which have held down costly nursing-home stays. The companies now provide coverage to around 36% of Medicare beneficiaries, according to the Kaiser Family Foundation. Medicare has also begun paying health-care providers in ways that reward them for bringing down overall costs, giving the providers an incentive to reduce referrals to nursing homes.
The Trump administration gave Medicare insurers more flexibility to spend money on things that improve patients’ home setups. It also made pandemic-related tweaks that allow Medicare coverage for more types of care in the home. The options have been exploited by insurance companies and health care providers to help transform the industry.
Seema Verma, administrator of the Centers for Medicare and Medicaid Services (CMS) predicted the shift from istitional to home-based care: "[w]e should be able to provide more services in the home setting that can enable somebody to be independent." She noted that "Covid is going to force a national conversation about how we take care of our elderly, and clearly there are issues in nursing homes that go beyond infection control."
During his campaign, President-elect Joe Biden promised to spend $450 billion to make sure people who need long-term care can get support in the home and community. “There’s no daylight between the Trump administration and the Biden administration on the desire to see more folks cared for in the home,” said Robert Kocher, an Obama White House health adviser now at venture-capital firm Venrock.
The number of Medicare-financed residents of nursing homes fell 28% in April and 34% in May from a year earlier, as the pandemic turbocharged efforts to steer Medicare patients away from nursing homes and as hospitals referred fewer after surgeries, according to an analysis of billing records done for the WSJ by data firm CareSet Inc. The decline occurred even though, during the pandemic, the Trump administration waived a requirement that Medicare beneficiaries stay three days in a hospital before going to a nursing home.
In addition, some nursing homes shut off admissions in the spring, Susan Craft, vice president of population health at Henry Ford Health System in Detroit told the WSJ. "It was a forced period for us to work on home-care programs,” said Gloria Rey, the director of post-acute care at Henry Ford. “We’re continuing to work within our organization to make going home the priority.”
Major Medicare-plan providers Humana Inc. and UnitedHealth Group Inc. say they are working to develop programs that would allow sicker patients to be discharged from hospitals to their homes. The shift in nursing-home use “is probably one of the trends coming out of Covid, along with telemedicine, that is going to act as a real accelerant and be sustainable,” said Susan Diamond, who leads the home business of Humana, one of the biggest Medicare insurers and also a major home-health owner.
Nursing homes’ loss has been a gain for home-health companies, which provide services such as therapy and nursing visits, though typically not 24-hour care.
Data from CarePort Health, a unit of Allscripts Healthcare Solutions Inc. that helps manage post-hospital care, show that referrals from hospitals to nursing homes and home-health providers both plunged in April. By October, though, referrals to home-health providers were at 109% of their 2019 baseline level, while nursing-home referrals had flattened at 83% of their baseline.
The falloff has been a disaster for the nursing-home industry, because Medicare pays better than the long-term stays Medicaid covers. Despite billions in pandemic-related government aid, some nursing homes have closed or been sold in recent months.
A November a survey by the American Health Care Association, a nursing home industry group, found 65% of nursing homes were operating at a loss. Mark Parkinson, the association’s chief executive, said 10% to 20% might file for bankruptcy without additional government aid.
Genesis Healthcare Inc., the biggest U.S. nursing-home company, told investors in August it might not be able to continue as a going concern. Its loss in the third quarter deepened, and in November it said it would need ongoing government support to sustain its operations. Its shares have languished at less than $1.
On the other side, shares of Amedisys Inc., the largest publicly traded home-health-care company, are up nearly 75% in 2020. It saw strong volumes and higher profits in the third quarter. “We want to take care of sicker and sicker patients, and show we can do it,” Amedisys CEO Paul Kusserow said.
Nursing-home officials said they worry that some frail patients could be left without enough supervision and support if sent home. A 2019 study published in JAMA Internal Medicine that compared Medicare hospital patients discharged to nursing homes with patients who got traditional home-health services found the latter were more likely to be readmitted to the hospital. Mortality and functionality of the groups, however, were similar.
To help patients who are sent home, some hospital systems and home-health firms, including Amedisys, are building new, often tech-heavy programs that layer on extra services and aim to reproduce aspects of nursing-home-level care in patients’ homes.
Prisma Health, an 18-hospital system in South Carolina, in May launched Home Recovery Care, a joint venture with a company called Contessa Health Inc. that provides operational support and technology for the service. Some hospital patients who might qualify for a nursing-home stay are instead sent home using the new program, which some insurers pay for, Prisma Health officials said.
See Anna Wilde Mathews & Tom McGinty, "Covid Spurs Families to Shun Nursing Homes, a Shift That Appears Long Lasting," Wall Street Journal, December 21, 2020.
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