Opportunities to Improve Quality and Reduce Costs of Care for Medicare Consumers in Long-Term Care

People with Medicare in long-term care facilities account for a disproportionate share of high Medicare spending for services, including hospitalizations, emergency room visits and skilled nursing facility care, according to three new reports released this week by the Kaiser Family Foundation. While the 2.2 million Medicare consumers in long-term care facilities for part or all of 2006 comprised approximately six percent of the Medicare population, they accounted for about 17 percent of Medicare spending for that year. Thirty-nine percent of Medicare spending for people in long-term care facilities was for hospitalizations, more than any other category of care.

The reports, both qualitative and quantitative in nature, together describe a “culture of hospitalization” in long-term care facilities. The studies cite clinical staff shortages as well as inadequate care coordination at facilities among the causes for hospitalization. The reports demonstrate the need for closer examination of Medicare spending associated with long-term care populations as a potential area for improving quality of care while at the same time reducing spending. Kaiser found that in 2006, about 24 percent of the hospitalizations for Medicare consumers in long-term care facilities were potentially preventable. They also found that a 15 percent reduction in hospitalizations of people with Medicare in long-term care facilities would produce approximately $1 billion in savings to Medicare in 2006 dollars, and a 25 percent reduction in hospitalizations among the same population would produce $1.7 billion in savings to the program. 
  Read the reports and watch the briefing, featuring CMS Administrator Dr. Donald Berwick, on Medicare spending for consumers in long-term care facilities.