Future of Long-Term Care in Health Care Reform David C. Grabowski Harvard Medical School
The Problem
Herbert Stein’s Law
Trends that can't continue, won't.
Silver Lining?
Silver Living (cont)
Baicker and Chandra, Health Affairs 2004
Spending and performance are misaligned
Why? • • • • • •
Failures of care delivery Overtreatment Administrative complexity Pricing failures Fraud and abuse Failures of care coordination • “The results are complications, hospital readmissions, declines in functional status, and increased dependency, especially for the chronically ill, for whom care coordination is essential for health and function.” Berwick and Hackbarth, JAMA 2012
Today’s Objectives • Review recent payment and delivery reforms for chronically ill individuals • Consider implications of these reforms for the assisted living sector • Predictions on where we go from here…
Today’s Objectives • Review recent payment and delivery reforms for chronically ill individuals • Consider implications of these reforms for ALFs • Predictions on where we go from here…
Payment & Delivery Reform
Delivery Coordination
FFS Global Payment
Payment Reforms for Health-LTC • Episode-based models: Bundle payment of service to incentivize greater efficiency • Population-based models: Capitated payment to incentivize greater efficiency
Payment & Delivery Reform
Delivery Coordination
Bundled Payment FFS Global Payment
Bundled Payments • Medicare pays single provider entity a bundled payment to cover all services around an inpatient hospitalization • Bundled Payment for Care Improvement (BPCI) Initiative – – – –
Model 1: Acute Care Model 2: Hospital, MDs, Post-Acute Care Model 3: Post-acute care Model 4: Hospitals, MDs for certain orthopedic and cardiovascular inpatient procedures
Payment & Delivery Reform
Delivery Coordination ACOs
Bundled Payment FFS Global Payment
ACOs • Provider-led organizations with a strong base of primary care that are collectively accountable for quality and total per capita costs across the full continuum of care for a population of patients • Payments linked to quality improvements that also reduce overall costs • Performance measurement
Payment & Delivery Reform Managed Care Integrated Care Demos
Delivery Coordination ACOs
Bundled Payment FFS Global Payment
Capitation By integrating services via managed care: – Potential for more efficient use of resources – More primary care – Greater case management
Proportion of Medicaid Beneficiaries in Managed Care
Medicaid Managed Care Penetration Over Time
Source: CMS Medicaid Managed Care Enrollment Reports
Major Managed LTC Models • Medicaid Managed LTC Only – HCBS – Nursing home care
• All Medicaid – LTC plus Medicaid primary/acute/Rx
• Medicaid-Medicare – Medicaid LTC – Medicaid primary/acute/Rx – Medicare acute/Rx
Integrated Care Demos • Under ACA, 26 states received funding to develop new models to coordinate care for dual eligibles • Variation across states in proposed models but mix of payment and delivery level reforms
Today’s Objective • Review recent payment and delivery reforms • Consider implications of changes for ALFs • Predictions on where we go from here…
Recent Research Project • Purpose: Examine the role of senior living sector in new payment/delivery models • Research consists of empirical analyses of acuity and health care utilization of ALF residents & stakeholder interviews • Supported by six major senior living companies and three REITs
Data • National Survey of Residential Care Facilities (NSRCF) – 2010 national survey of residents in residential care facilities; assisted living residences; board and care homes; congregate care; enriched housing programs; homes for the aged; personal care homes; and shared housing establishments
• Medicare Current Beneficiary Survey (MCBS) – Nationally representative survey of Medicare beneficiaries
• Minimum Data Set (MDS) – Federally mandated nursing home assessment conducted at admission and then at least quarterly thereafter
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Key Takeaways • Prevalence of chronic health conditions very similar across RCFs and NHs • Health care use (Inpatient, SNF) in RCFs very similar to NHs and community • To date, RCFs have some clinical “infrastructure” but much more could be done to integrate health and LTC services • Many integrated programs are currently being directed towards LTC recipients in the community and NHs, should we explore similar programs in senior living space? 28
Stakeholder Interviews • Detailed interviews with 6 senior living companies and three health care REITs • What is happening now and what do they envision happening in the future?
1) No company had yet to join an ACO or other global payment model under the ACA • Hospital systems still “feeling their way” with ACO model • Much discussion around these models (both internal/external) but no contracts to date • Several termed these relationships “inevitable”
2) Much heterogeneity in use of payment/delivery models across companies • Some actively positioning themselves to be a part of global payment/delivery systems, while others are more focused on housing/hospitality services • One company has highly integrated onsite medical care delivery & their own Medicare Advantage (MA) plan • Another company developed a medical model focusing on preventive geriatrics, skilled nursing and care transition
3) Enthusiasm for new population- and episodebased models • Population-based models: At-risk ACO models that encompass senior living populations (e.g., cost of on-site medical care more than offset by savings from prevented hospitalizations) • Episode-based models: Senior living communities could partner with bundled payment demos to provide lower cost short- term rehab (e.g., enhanced ALF care could provide similar benefits as SNF at lower costs)
4) Regulations are an important barrier to innovation
• Regulations vary considerably by state • In certain states, the ability of senior living to deliver health care services very limited (e.g., ALFs can’t change a band aid in California) • Role of regulation in quality improvement also quite variable by state (“extremely unregulated” relative to SNFs)
5) IT and Data Capabilities Underdeveloped
• No company that we spoke to had integrated their health records with that of a hospital/MD network • Most companies do not track health care utilization in their communities • Difficult to enter into risk-bearing relationships without knowing baseline rates! • Most companies beginning to invest in IT/data capabilities
6) Much innovation at delivery-level
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INTERACT On-site medical care Telemedicine Case management Etc.
6) Innovation (cont.) Example from one of my ongoing projects: • Working with Right-at-Home and ClearCare to prevent avoidable hospitalizations in home care setting • The “In-Home” Project identifies and manages changes in condition using caregiver checklist and technology platform • We will see more of these projects when incentives are better aligned
Early evidence that ALFs can contain costs elsewhere in the system
Today’s Objectives • Review recent payment and delivery reforms • Consider implications of changes for ALFs • Predictions on where we go from here…
Prediction is very difficult, especially about the future
1) Inevitability of Managed LTC • ACOs are a step along the journey, not the destination! • Managed LTC is the future • Key question: is it integrated with Medicare? • Strong potential role for ALFs: – Lower cost substitute to nursing homes – On-site medical care to reduce costs elsewhere in system
• Rationing, quality, and medicalization of LTC are important concerns…
2) Care integration will entail… • Regulatory reform • Greater licensure standards across states • Investment in data infrastructure – Electronic health records – Quality measurement
• Innovation around delivery level interventions
3) Bifurcation of Sector • Some providers will emphasize integrated care models, others will emphasize housing – Challenge for Integrated ALFs: Avoid “medicalization” of ALF care – Challenge for Housing oriented ALFs: How to offer services such that individuals can age in place – Goal is to do both well!
• Similar bifurcation likely to occur in home care sector
4) Expansion of Low Income ALFs • Medicaid currently pays for roughly 10% of assisted living expenditures under different waiver programs • Medicaid covers care, individual pays out-ofpocket for housing • Housing is the missing piece! • States will increasingly use ALFs as a way to manage high-cost Duals through integrated programs
Concluding Thoughts • Overall, assisted living is a “success story” in our LTC system: – Providers: Tremendous growth – Residents: Age in place, hopefully delay (avoid!) nursing home care – Government: Largely private-pay
• Given the misalignment of spending and performance in our system coupled with high Medicare costs of ALF population, integrated ALF models have great potential going forward