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Each week, Health Affairs' Rob Lott brings you in-depth conversations with leading researchers and influencers shaping the big ideas in health policy and the health care industry.
A Health Podyssey goes beyond the pages of the health policy journal Health Affairs to tell stories behind the research and share policy implications. Learn how academics and economists frame their research questions and journey to the intersection of health, health care, and policy. Health policy nerds rejoice! This podcast is for you.
Hello, and welcome to A Health Podicy. I'm your host, Rob Lott. When a patient is discharged from the hospital to a skilled nursing facility, the goal is for them to continue on the pathway to recovery. Things like physical therapy, occupational therapy, close clinical monitoring are all meant to foster healing and build strength and generally improve patient's health to the point that they're ready to go home. Ideally, that return home means a return to stability and good health going forward.
Rob Lott:But of course, it doesn't always work out that way. Unfortunately, some proportion of patients are readmitted to the hospital not long after being discharged from the skilled nursing facility. Sometimes that's just the unfortunate consequence of declining health, but researchers have recognized that some skilled nursing facilities are more likely than others to see their patients readmitted after discharge. This suggests that frustratingly, facilities are delivering lower quality care perhaps, or making less reliable discharge decisions. Is it possible to close the gap between the skilled nursing facilities with high readmission rates and low readmission rates?
Rob Lott:That's the subject of today's health policy. I'm here with Doctor. Robert Burke, a hospitalist and associate professor of medicine at the University of Pennsylvania Perelman School of Medicine. Together with his coauthors, Doctor. Burke has a new article in the June issue of Health Affairs, evaluating the skilled nursing facility value based purchasing program.
Rob Lott:This effort was implemented by Medicare about ten years ago, and it's aimed specifically at reducing readmissions among skilled nursing facilities. So did the program work? The answer, of course, is complex, and I'm thrilled that we have the expert evaluator to walk us through it all here today. Doctor. Burke, welcome to The Odyssey.
Robert Burke:Thank you so much for having me.
Rob Lott:All right, let's start with some background on skilled nursing facilities in America just to sort of get our footing. Who uses them and what's the balance between short term stays and long term stays Medicare versus non Medicare patients?
Robert Burke:Great question. So there's about 15,000 nursing homes in The United States. There's one in almost every county, far more than there are hospitals, or I think it's a surprise to some people. They're part of the institutional, what we call long term services and supports system in The United States, which sort of runs along a spectrum of care in the home, all the way to relatively intensive care that's provided in skilled nursing facilities. They have a range of names, which I think leads to some confusion.
Robert Burke:You'll hear them called SNFs or skilled nursing facilities like we talked about here. In my work as a hospitalist physician, I've heard this called the big lie. And here's the big lie, which is, Mr. So and so, you're going go home from the hospital and you need some rehab. So you're going to go to a rehab and you're going to get a couple of weeks of rehab and then you'll be to return home.
Robert Burke:And then Mr. Jones is very surprised and often disappointed to find that, that rehab quote unquote is a skilled nursing facility. In fact, all post acute care in skilled nursing facilities are also nursing homes. They're all the same thing, long term and short term care in the same building.
Rob Lott:So the big lie that I've never heard that before, but it's fascinating. Obviously, when you think about a nursing home, you think about people who are sort of, to some extent, potentially languishing there, they're, you know, gonna live the rest of their lives there perhaps. And so someone's coming from having had a hip surgery or something like that, and they see themselves surrounded by people who don't seem very healthy or very well. Is that sort of part of the psychic confusion that's going on? You hit the nail
Robert Burke:on the head, I think. For most older adults, that transition from the hospital to a skilled nursing facility is a huge challenge to their identity as a independent person in the community. And I think they see, in some cases rightly so, this is recognition of diminishment in terms of their ability to take care of themselves at home. And we find that's a challenge, you know, to their psyche and their thoughts about the future.
Rob Lott:So what do we know about these facilities? And as you said, there's tremendous amount of variation, but I assume there's also variation in the quality of care that they're delivering from facility to facility?
Robert Burke:Yes, you're exactly right about that. For those who are interested, there's a great report by the National Academies of Medicine in 2022 that's all about improving quality in nursing homes and really reviews a lot of the data about nursing home quality. You know, it won't surprise most of your listeners, I think, that, this report compares itself to a prior report in 1986 and they find that very little has changed actually in terms of quality of nursing homes over that period, which is very discouraging. The most common way that, you know, older adult might find quality data about a nursing home is on Nursing Home Compare, which is maintained by CMS. It's a website you can go to at medicare.gov.
Robert Burke:It compares nursing homes on things like their nurse staffing levels, their quality metrics, and inspections that are conducted by CMS to evaluate their quality. These aren't perfect metrics and they haven't been shown to improve consumer behavior very much, but they are really multi dimensional, they're rigorously collected and they put nursing homes into sort of five easy categories based on star ratings, one star to five star. We do know that nursing homes are segregated in terms of who's in them. If you're a poor older adult, if you're someone who's black, for example, more likely to be in a lower quality facility. And that, you know, even the locations of high and low quality facilities really map socioeconomic disadvantage across The US also.
Robert Burke:And I'll just go back one more time to say, you know, going back to our big lie conversation, I think one of the biggest surprises I find among older adults is one of the quality metrics that's reported is something called the community discharge rate. And this is a really useful metric of, how many people who leave the hospital and go to this nursing home for care are eventually able to return home. And it's measured at one hundred days following discharge because for most people that's how long Medicare covers, in full or partially, your nursing home stay. And I think most older adults are surprised to see that that number is, you know, around fifty five percent, much lower than they would think. And, you know, I think there, again, it goes back to that big lie conversation.
Robert Burke:If I were to be honest about it and say, you know, Mr. Jones, actually your chances are about fiftyfifty if you'll return home after this nursing home stay. I think many more older adults might view that stay with suspicion.
Rob Lott:Wow, that's surprising. So just to clarify the odds is, let's just in this case a fiftyfifty odds that you're going to go from the nursing home back to the hospital or just home first or sort of how do you factor in those stops along the road back to the hospital, if you will?
Robert Burke:Yeah. That's a great question. The community discharge rate measures you have to stay alive for that hundred days, and you can't go back to the hospital. And for thirty days after you leave the nursing home, you have to stay alive, and you can't go back to the hospital or the nursing home. So it's sort of a measure of staying alive and being able to return to the community without going back to those places, within that first one hundred days.
Rob Lott:All right. Well, against this backdrop, let's talk about the skilled nursing facility values based purchasing program. How does it work? When was it created and to whom does it apply?
Robert Burke:Yeah, good question. It was created by statute in 2014 as a part of the Protecting Access to Medicare Act. And it applies to all, traditional Medicare beneficiaries. So fee for service enrollees who leave a hospital and go to a skilled nursing facility for post hospital care. It's also a mandatory program for nursing homes.
Robert Burke:So, more than 97% of nursing homes have to participate. The program started in 2015. It runs on a four year cycle. So 2015 was the first baseline year. And in that year nursing homes were compared to each other based on their thirty day readmission rates.
Robert Burke:Then two years later they were compared to themselves in terms of how much they were able to improve their readmission rates. And then two years after that in 2019, the first financial incentives were applied. And one of the interesting things about the program is you can sort of win as a nursing home through either one of those pathways. You can either be a high achiever of baseline, I have lower readmission rates than most of my peers, or you can improve over time more than your peers. And either Medicare sort of takes whichever is the better score and then assigns you a financial incentive or penalty.
Robert Burke:That incentive or penalty though is based on all of your Medicare admissions, not just the readmissions, but every admission your nursing home got from Medicare. And it can be up to a 2%, penalty or up to about a 3% bonus.
Rob Lott:So what were your main research questions when you started looking at this program?
Robert Burke:Well, we were really excited to evaluate it because to me, is the largest test of pay for performance in nursing homes, think in the history of nursing homes. Mostly efforts to improve quality before this have been focused on sort of more of the stick and less of the carrot. And I think this was really an intent to try pay for performance on a big scale. So our main research question was to what extent did this program achieve its intended aim? Did it result in reductions in all cause thirty day readmission rates?
Robert Burke:But we were also concerned about to what degree it might have introduced unintended consequences. And some of those might be, for example, if you were in a nursing home and you were trying to reduce your admission rates, maybe you would try to keep people in the nursing home a little longer to try to manage that risk. And so we looked at length of stay in the nursing home. Or maybe you were more likely to keep people even if they were sick. And so we actually looked at thirty day mortality rates to make sure that that wasn't the case.
Robert Burke:And then finally, looked at, community discharge rates like we've been talking about so far to see if this program had any impact on your eventual ability return home.
Rob Lott:Great. All right. Well, let's hear it. What were some of your top line findings?
Robert Burke:We had about, we measured data from 2011 to 2021. So, five or six years before the program and five or six years after the program. There's a sample of 17,000,000 stays. And the top line finding is there was no difference in any outcome.
Rob Lott:Wow. Okay. Were you surprised?
Robert Burke:I was very surprised. One of the main reasons I think is that nursing homes report that their profit margins are very low, in the space of zero to one, maybe 2%. And so I thought this might be a meaningful amount of incentive to really spur change. And we didn't find that.
Rob Lott:Wow, that's really surprising. I wanna dig down on that in a little bit, but first let's take a quick break. And we're back. I'm here with doctor Robert Burke talking, with him about his paper in the June issue of Health Affairs about the skilled nursing facility value based purchasing program. And as he, just before the break, reported that they basically found no meaningful improvement or differences achieved by the program.
Rob Lott:And I'm wondering if you can say a little more about, although overall there was no improvement, was there any sort of variation in the kinds of facilities or the kinds of populations served that maybe might have revealed some insight about what's going on there?
Robert Burke:Great question. We did look at some specific subgroups of nursing homes to see, did it matter by your profit status or if you were a part of a chain, your location in terms of being urban or rural, we really didn't find any difference in any group or in any sensitivity analysis that we did. The findings were the same, really no change in results of the program.
Rob Lott:Wow. Okay. So you said you were really surprised by the outcome. I imagine once you had those initial results, you maybe went for a long walk and scratched your chin or maybe got some coffee with your colleagues and tried to figure out what was going on here. Do you have a theory that might explain what's going on?
Robert Burke:I do. And it's actually related to complimentary work that isn't in this publication, but we're also working on. And two theories based on that work. One is we did actually look at the size of the individual incentive every nursing home in the country received. And what we found was to our surprise, the median amount of incentive that nursing homes received was a penalty of about $10,000 And that's not very much money when it comes to a nursing home budget.
Robert Burke:It's certainly not enough to hire another nurse or buy an x-ray machine and a technologist and the kinds of things we might think about that might reduce readmission rates. And so another part that we found about that was that your financial incentive or penalty really varied year to year by nursing home. And so I think it also made it really hard for nursing homes to count on a consistent investment they could make to reduce their readmission rates. And so I worry that the scope of the incentives was too small. The other piece that we've worked on is we visited actually eight nursing homes across the country who were successful under the program to say, what's the secret sauce?
Robert Burke:How did they do it? And that work is still underway. But one of the top line findings is that I'm not sure we met a single person in leadership in one of those nursing homes who had ever heard of this program. And to me, that tells me there's a real disconnect between sort of where these programs might be interacting with a nursing home chain. It might not be at the individual facility level, it might be somewhere further up the chain and the people who are actually providing the care that might reduce readmissions on the ground.
Rob Lott:Wow, that's fascinating. I'm glad you mentioned chains, right? So the idea might be that there's someone at a corporate suite who's watching these numbers, but the person who's sort of running the facility on a day to day basis just isn't clued in. What's the landscape in terms of chain skilled nursing facilities? What's the balance between small versus large corporate ownership?
Rob Lott:I know private equity has a role in there too. Did you think about that as you were developing this evaluation and how are you thinking about it now?
Robert Burke:It's such a good question. It turns out that ownership data and financial transparency are not hallmarks of the nursing home industry currently. Sure. One of the things we looked into was whether our results vary depending on what a nursing home's net operating margin was, its profit margin. And we didn't find any change there, but I think there's good reason to be skeptical of who's listed as the owner and what the finances are like, because neither are transparent.
Robert Burke:And so it really limits our ability to understand to what extent those influences are important. I think there's emerging data that, you know, nursing home profits, for example, are tunneled to related entities. And so what CMS sees may not be the actual truth of what's happening on the ground.
Rob Lott:Fair enough. Okay, well, let's take one step even further back kind of big existential question. Do you feel like skilled nursing facilities, or maybe I should ask, do your findings help us understand whether skilled nursing facilities are meeting our needs as a society? And as I suspect the answer is probably no, what obstacles are preventing skilled nursing facilities from meeting our needs?
Robert Burke:It's a great question. And a little bit of a difficult one to answer just because nursing homes have evolved to meet the needs of these two really different populations. On the one hand, they're sort of a hospital step down unit for people coming from the hospital, sick, older adults, frail older adults coming from the hospital. But even in our group that provided the most Medicare paid care, that's only about 20% of their book of business. Most nursing homes, 80% or more is Medicaid paid long term care.
Robert Burke:And so I really think of them in that context predominantly because that's their predominant book of business. And in that case, in both cases, I think, no, they're not currently meeting our needs. Most older adults dread going to one. It's clear that from the quality data that it's not optimal. And I think honestly, the reason for that is, you know, we've historically and consistently under invested in that kind of care as a country.
Robert Burke:It's really hard to think about reducing something like thirty day readmission rates without things like improved nurse staffing or nurse turnover. The average turnover rate in a nursing home in The United States is 120% for their nurses. And you say to yourself, how can it be more than 100%? Well, it's because in a given year, not only does all the nursing staff turnover, but some of their replacements turnover in the same year. It's really hard to think about building consistent, improved quality with that being the backdrop.
Rob Lott:So imagine you get a call, actually right after we finish this interview, your phone rings and, you get a call from a member of congress who just read your paper, and they ask you a question. The question is, is the problem that this program was intended to fix still the right target for intervention going forward? And then I guess the follow-up would be if the answer is yes, where do we go from here? What changes might you recommend to the program? Or should it just be scrapped altogether, I guess?
Robert Burke:Well, think about this in two ways. One is, I do hope I get that thought, that would be great. Happy happy to talk
Rob Lott:if our members of congress were thinking about these questions at this very moment.
Robert Burke:Maybe two things I might say about that. One is, there actually is gonna be an opportunity written into the statute to see to what extent this program affects other outcomes. And I do have some faith that this same way of incentivizing nursing homes might improve some of those things. So into statute is that the program is going to expand other outcomes like nurse staffing, hospital associated infections, falls with major injury, discharge function, your function when you leave a nursing home, a variety of new measures. And I think those really, it's a nice way to see to what extent financial incentives improve those things, because I think something like falls might be more under the control of a nursing home than readmissions, certainly more than nurse staffing.
Robert Burke:That'll be very challenging for this program to address, I think, because the drivers of that are more than just financial. But a second piece I might add is that there's a lot of opportunity here that I think has been lost to test different models of those financial incentives. We came upon a 2% penalty and a 3% upside in terms of this particular set of incentives, but there has been very little testing of what actually works the nursing home setting. And we could envision ways of thinking about testing larger downside or larger upside risk, ways of perhaps setting a floor or even a larger upfront investment for nursing homes that historically underperform as a way to help them be successful in programs like this. I would love to see some regulatory changes like that, that help us understand on a broader scale, what's the best way to incentivize improvements in care?
Rob Lott:Great, well, that's perhaps a great spot for us to wrap up. Really fascinating stuff and it will be fascinating to see if any of those potential opportunities for further study come up. So, doctor Burke, thank you so much for taking the time to chat with us today.
Robert Burke:Thank you so much for having me.
Rob Lott:And to our listeners, thanks for tuning in. If you enjoyed the episode, please leave a review, share it with a friend, smash that subscribe button, and tune in next week. Thanks for listening. If you enjoyed today's episode, I hope you'll tell a friend about a health policy.