NURSING FACILITY SUB-ACUTE CARE:
THE QUALITY AND COST-EFFECTIVE ALTERNATIVE TO
HOSPITAL CARE
© 1996 by the American Health Care Association
-Introduction-
Subacute care has emerged as one of the key solutions to reforming the American health care delivery system. As a result, nursing facilities are dedicating entire wings, even entire facilities, to provide high-tech, hospital-like medical care to seriously ill patients of all ages at half the cost of hospital-based facilities.
-What is Subacute Care?-
Subacute care is comprehensive inpatient care designed for someone who has an acute illness, injury, or exacerbation of a disease process. It is goal oriented treatment rendered immediately after, or instead of, acute hospitalization to treat one or more specific active complex medical conditions or to administer one or more technically complex treatments, in the context of a person's underlying long-term conditions and overall situation.At present, the federal government has not adopted a standard definition for subacute care, nor adopted a specific reimbursement mechanism for subacute care. Nonetheless, the industry is taking shape swiftly as managed care entities, insurers, and lawmakers look to subacute care as a promising source of relief to an overburdened health delivery system.Generally, the individual's condition is such that the care does not depend heavily on high-technology monitoring or complex diagnostic procedures. Subacute care requires the coordinated services of an interdisciplinary team including physicians, nurses, and other relevant professional disciplines, who are trained and knowledgeable to assess and manage these specific conditions and perform the necessary procedures. Subacute care is given as part of a specifically defined program, regardless of the site.
Subacute care is generally more intensive than traditional nursing facility care and less than acute care. It requires frequent (daily to weekly) recurrent patient assessment and review of the clinical course and treatment plan for a limited (several days to several months) time period, until the condition is stabilized or a predetermined treatment course is completed.
In 1995, JCAHO and the Commission on Accreditation of Rehabilitation Facilities (CARF) began using survey protocols for facilities that provide subacute care.
-Medical Services and Patients-
Because subacute patients require highly skilled care, the nursing facilities that serve them use a team approach to patient treatment. Doctors, therapists, nurses, and other health professionals all work in concert with the patient and his or her family.
Subacute patients generally need between four and seven hours of skilled nursing care each day, compared to eight or nine hours for acute hospital patients. The average length of stay in a nursing facility subacute unit ranges from a few days to three months, although some people might need care for up to a year or two.
(1) Most subacute patients are elderly; about one
third are younger than age 65.
According to AHCA's 1996 Facts and Trends: The Subacute Care
Source Book, 82 percent of patients were referred to nursing
facility-based subacute units by hospitals or the patient's physician.
The national survey also found that there is no significant difference
between freestanding and hospital-based subacute facilities with regard
to patient discharge destinations. A study by Abt Associates of 20,757 patients discharged from
hospitals and 1,611 patients discharged from nursing facility-based
subacute care units between 1994 and 1995 found that: (3)
It is important to note that, despite longer lengths of stay, the Abt
study found that the average total charges for subacute patients in
nursing facilities ($16,170) were about 70 percent of charges ($22,895)
for patients at hospitals. In general, studies find that nursing facility subacute units charge
40 percent to 60 percent less than acute-care hospitals for the same
level and quality of services.(4) This savings is
achieved because nursing facility subacute units do not have the costly
overhead expenses of running emergency and operating rooms.
In testimony provided to Congress, Health Care Financing
Administration (HCFA) Administrator Bruce Vladeck, reported that:
The study found one significant difference between hospital care and
care received in a nursing facility-based subacute unit. The average
lengths of stay for patients cared for in hospitals is about 20 days
compared to an average 26-day length of stay in a subacute unit.
Patients who enter subacute units for care and rehabilitation
services tend to be older and sicker than those treated in
hospitals.
Patient outcomes, from admission to discharge, from a
rehabilitation program are the same for hospitals and subacute care
units. -Who Pays for Subacute Care?-
THE COST-EFFICIENCY OF NURSING FACILITY SUBACUTE CARE
- Studies and Anecdotal Evidence -
"In a free-market, where patients or independent case managers
can make informed choices for care, our nursing facilities can offer
skilled nursing care of the best quality available and at costs far
below a comparable acute care setting. Even in Medicare, the cost of
free-standing SNF (Skilled Nursing Facilities) care is an average of
58 percent less than in an acute-based setting."
Numerous studies and anecdotal evidence further illustrate the
cost-efficiency of subacute care in nursing facilities:
According to an Abt Associates study: The Medicare program
could save nearly $9 billion annually if patients needing subacute
care were treated in skilled nursing facilities rather than in the
more expensive hospital setting. A Dean Witter report found: Treatment in a subacute setting
offers a compelling cost advantage for appropriate patients.
Compared to $700-$1,000 per day for an acute-care hospital and $850
per day for an acute rehabilitation hospital, average per diem
charges [in a nursing facility subacute unit] range from $300 per
day to $550 per day. A Kilgore study of two patient groups concluded: Total
charges for a "subacute" group in nursing facilities were
37 percent lower than [for] those who were hospitalized in inpatient
facilities. Overall, the nursing facility subacute program was
significantly more cost-effective in terms of functional gains made
per dollar of expenditures. A ManorCare Health Services (MC) official told a Congressional
panel: On average, total daily charges in a subacute unit range
from $350 to $575 per day, versus $650 to $1,000 per day in an acute
general or rehabilitative hospital. Two of our subacute units are
located in the Philadelphia and Baltimore markets. A comparison of
our basic semi-private room charges to some area hospitals' charges
clearly illustrates the price differentials.
| Philadelphia | |
| MC Medbridge Unit (SNF Subacute) |
$200
|
| Hahnemann Hospital |
$820
|
| Abington Hospital |
$875
|
| Holy Redeemer Hospital |
$837
|
| Baltimore | |
| MC Medbridge Unit (SNF Subacute) |
$200
|
| Sinai Hospital |
$491
|
| John Hopkins Hospital |
$451
|
| Greater Baltimore Medical Center |
$434
|
Hambrecht & Quist analyst Erik Wiberg estimated: Subacute
units in nursing facilities could provide, at lower cost, about $10
billion to $20 billion in care currently being provided in hospitals.
Congressional testimony of the American Association of
Respiratory Care revealed: On any given day, there is a census of
over 11,500 chronic ventilator patients in U.S. hospitals. At a cost of
about $785 per patient day, this totals over $9 million per day for care
of chronic ventilator patients. Once a patient is pronounced medically
stable and able to be discharged, it takes an average of 35 days to
place [him/her] in an alternative care site such as a home or a skilled
nursing facility. That translates to an excess of $27,000 per patient in
unnecessary hospital costs.
| According to investment analysts at Cowen & Co.: We
conservatively estimate that on any given day, 10 percent to 20
percent of general acute care hospital beds hold patients that could
receive appropriate care in a lower-cost setting [such as a nursing
facility subacute (12) unit]. |
THE COST-EFFICIENCY OF NURSING FACILITY SUBACUTE CARE
-Patient Profiles-
PROFILE #1: A 48-year-old man entered the hospital at the onset of Guillian-Barre Syndrome, a complex disease that produces bilateral weakness and paralysis.
OUTCOME: Following a four-week hospital stay, the patient moved to a hospital inpatient rehabilitation unit for three months at a cost of $94,572 ($1,028 per day). Instead of continuing treatment in the rehabilitation hospital, the patient was transferred to a nursing facility subacute unit at a cost of $31,250 ($475 per day). After a 66-day stay, the patient returned home.
COST SAVINGS: Savings over the potential hospital inpatient stay totaled $553 per day ($1,028 less $475) or $36,498 for the entire stay.
PROFILE #2: A woman entered an acute-care hospital with cranial pressure from a tumor that caused seizures and eventual respiratory failure. Treatment utilized a ventilator with a tracheotomy and feeding tube. After stabilization, the patient moved to a nursing facility subacute unit.
OUTCOME: An interdisciplinary team of licensed health care professionals established a care plan for the patient that included: coma stimulation; skilled nursing care; and occupational, physical, and respiratory therapy. After three months, the patient improved and was discharged home to receive care from her family.
COST SAVINGS: The rehabilitation unit would have averaged more than $1,000 per day, compared to the nursing facility subacute unit stay of $500-$600 per day.
PROFILE #3 A 32-year-old ventilator-dependent quadriplegic patient spent three years in a private hospital room with no change in condition. The patient then moved to a nursing facility subacute unit.
OUTCOME: The patient remained in the subacute unit for three additional years. With continued therapy, he was outfitted with a motorized wheelchair and began to move into society, although he continued to need ventilator care. After being discharged to the care of his specially trained family, he started a successful business.
COST SAVINGS: The three-year stay at the nursing facility subacute unit cost about $500 per day, compared to $1,500 per day at the acute-care hospital. At savings of more than $1,000 per day, subacute care saved the Medicaid program more than $1.1 million.
WHO ARE THE PLAYERS IN SUBACUTE CARE?
This high rate of growth and the lack of a commonly accepted
definition of subacute care have made it difficult to estimate the
number of subacute beds in the United States, but a 1996 Provider magazine
survey estimates that there are 35,000 to 45,000 beds just among the top
10 national long-term care chains.
Creation of a subacute unit requires a significant commitment of capital. Therefore, most of the movement into subacute care is occurring among the major nursing facility chains. For example:
Beverly Enterprises, the nation's largest post-acute nursing
facility chain, operates 200 subacute facilities nationwide and has
established a process to identify new expansion opportunities.
Integrated Health Services, which has approximately 3,400 beds
in 145 subacute units nationwide, expects to expand its care by 300 to
500 beds during 1996.
Mariner Health, which pioneered subacute care in the
mid-80s, today operates facilities in 28 states including: 78
freestanding subacute in-patient centers, 55 subacute out-patient
clinics, and five home care agencies. Mariner also provides subacute
rehabilitation in 500 contract sites. The company continues to explore
expansion opportunities.
Vencor Corp., operates more than 300 subacute care
facilities nationwide that care for an average of nearly 4,500 patients
daily.
WHAT IS THE FUTURE OF SUBACUTE CARE?
Healthcare Investment Analysts, Inc. takes a more conservative view,
estimating that the subacute care market for nursing facilities will
grow to $5 billion in a decade.
This potential growth is stymied, however, by barriers that make it difficult for nursing facilities to provide subacute care.
For example, nursing facility subacute units must contract with hospital-based respiratory therapists to be reimbursed by Medicare for providing respiratory services to patients. Further, while hospitals and nursing facility subacute units provide identical treatments to patients, hospitals receive much higher reimbursements under Medicare.
Leveling the playing field between hospitals and nursing facility subacute units would require Congress and federal agencies, such as HCFA, to:
Repeal the three-day prior hospital stay requirement under Medicare for appropriate subacute patients;
Eliminate higher payments under Medicare that reimburse physicians more for services provided to patients in hospitals than for patients in skilled nursing facilities;
Eliminate reductions in Medicare reimbursement that will inhibit the provision of subacute care;
Implement a new Medicare prospective payment system that provides appropriate reimbursement for subacute care; and
Mandate that states offer subacute care in skilled nursing facilities under Medicaid and develop an adequate reimbursement methodology for such care.
Eliminating these barriers to the provision of subacute care in nursing facilities will ensure that Americans have access to state-of-the-art health care that does not break the bank.September 1996
SOURCES
(1) Barnett, Alicia Ault. "Subacute Care: High Tech Nursing Homes" Report on Long Term Care January 12, 1994.(2) American Health Care Association. 1996 Facts and Trends: The Subacute Care Sourcebook.
(3) Sherman, Daniel and Steven Meyers. Rehabilitation Outcomes by Site of Service: A Comparison of Hospitals to Subacute Units of Freestanding Skilled Nursing Facilities 1995.
(4) Sherman, Daniel and Laura Walker. Subacute Care in Freestanding Skilled Nursing Facilities: An Estimate of Savings to Medicare June, 1994.
(5) U.S. Congress, House, Committee on Ways and Means Subcommittee on Health, Testimony of Bruce Vladeck, Administrator, Health Care Financing Administration, 104th Cong., 1st Sess., 19 July 1995.
(6) Subacute Care in Freestanding Skilled Nursing Facilities: An Estimnate of Savings to Medicare.
(7) Banta, Mark G. and Todd B. Richter. "The Future of the Nursing Home Field." Dean Witter -- Facility-Based Long Term Care Industry April 2, 1993; 23.
(8) Kilgore, Karl M. et al. "Intermediate Rehabilitation: Cost-Effectiveness and Outcome." Presentation to the 1991 American Congress of Rehabilitative Medicine. Denver, CO. June 26, 1991.
(9) U.S. Congress, House, Committee on Ways and Means Subcommittee on Health, Testimony of Stewart Bainum, Jr., Manor Healthcare Corp., 103rd Cong., 1st Sess., 22 April 1993.
(10) Report on Long Term Care.
(11) U.S. Congress, House, Committee on Ways and Means Subcommittee on Health, Testimony of Stewart Bainum, Jr., Manor Healthcare Corp., 103rd Cong., 1st Sess., 2 November 1993;4.
(12) Hicks, William G. and Kathleen M. Miner. "The Post-Acute Spectrum of Care." Cowen -- Industry Strategies May 19, 1993;4.
(13) American Health Care Association, Provider Magazine survey of top 10 subacute providers, January, 1996;52.
(14) Beverly Enterprises, August 7, 1996.
(15) Integrated Health Services, August 1, 1996.
(16) Mariner Health, August 7, 1996.
(17) Vencor Corp., August 28, 1996.
(18) Cowen, 4.
(19) Wise, Dan. "A Matter of Transitional Care." HMO Magazine September/October 1993; 29.
© 1996 by the American Health Care Association
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