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L e a r n i n g O b j e c t i v e s

A population that does not take care of the elderly and of children and the young has

no future, because it abuses both its memory and its promise.

—Pope Francis

In a culture where there is trust, respect, and a moral foundation, the young can grow

and the elderly thrive.

—Dr. Debra Harrison

After you have studied this chapter, you should be able to

➤➤ evaluate➤the➤availability➤of➤post-acute➤care➤services➤in➤local➤communities,

➤➤ identify➤the➤appropriate➤post-acute➤care➤interventions➤to➤meet➤the➤healthcare➤needs➤of➤

older➤adults,➤

➤➤ identify➤quality➤issues➤impacting➤the➤provision➤of➤post-acute➤care,

➤➤ discuss➤the➤challenges➤faced➤by➤healthcare➤executives➤as➤they➤develop➤a➤strategy➤to➤meet➤

post-acute➤care➤needs,➤and

➤➤ understand➤the➤sources➤of➤financing➤for➤post-acute➤care➤services➤as➤well➤as➤opportunities➤

for➤increased➤efficiency➤across➤the➤continuum➤of➤care.

C H A P T E R 1 0

S T R AT E G I C P L A N N I N G A N D P O S T- A C U T E C A R E S E R V I C E S

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ri gh ts r es er ve d. M ay n ot b e re pr od uc ed i n an y fo rm w it ho ut p er mi ss io n fr om t he p ub li sh er , ex ce pt f ai r us es p er mi tt ed u nd er U .S . or a pp li ca bl e co py ri gh t la w.

EBSCO : eBook Collection (EBSCOhost) - printed on 4/18/2019 5:23 PM via WESTERN KENTUCKY UNIV AN: 1843079 ; Harrison, Jeffrey P..; Essentials of Strategic Planning in Healthcare Account: s8993066.main.ehost

E s s e n t i a l s ➤ o f ➤ S t r a t e g i c ➤ P l a n n i n g ➤ i n ➤ H e a l t h c a r e1 9 8

In t r o d u c t I o n This chapter discusses trends and factors affecting strategic planning in the post-acute care (PAC) industry. PAC providers offer important recuperation and rehabilitation services to Medicare beneficiaries after discharge from an acute care hospital. PAC providers include skilled nursing facilities (SNFs), home health agencies (HHAs), inpatient rehabilitation facilities (IRFs), and long-term care hospitals (LTCHs). In 2013, Medicare’s payments to more than 29,000 PAC providers totaled $59 billion, more than doubling since 2001. Medicare has a responsibility to ensure access for beneficiaries, appropriately reimburse providers for the patients they treat, and control costs for the beneficiary and taxpayer alike. Patient utilization of PAC is affected by local practice patterns, the availability of PAC in a market, patient and family preferences, and financial arrangements between a PAC provider and the referring hospital. Because PAC can be appropriately provided in a variety of settings, Medicare ideally would pay for PAC using one payment system with payments based on patient characteristics rather than on the site of service. This system would lend itself well to a Medicare bundled payment strategy by aligning payments across settings for select conditions (MedPAC 2015).

As the longevity of Americans increases and the number of baby boomers reaching retirement grows, the demand for PAC and similar services will increase. These develop- ments offer strategic planning opportunities and business growth potential for a wide range of healthcare providers.

Post-acute services also have the potential to significantly increase federal expendi- tures on the Medicare program. The Centers for Medicare & Medicaid Services (CMS) is concerned that a fragmented PAC system will increase costs and adversely affect the quality of care. To reduce expenditures and prevent fragmentation of services, CMS is considering bundling the payment for all PAC services that a Medicare patient receives after being dis- charged from an acute care hospital. Such a bundled payment would require IRFs, SNFs, adult health day care centers, and hospice facilities to work closely together to assume the risk associated with bundled Medicare payment for PAC. CMS views this bundling as a

Post-acute care (PAC)

Services➤provided➤after➤

discharge➤from➤an➤

acute➤care➤hospital.

K e y t e r m s a n d c o n c e p t s

➤➤ Adult➤health➤day➤care➤center

➤➤ Comorbidity

➤➤ End-of-life➤care

➤➤ Hospice➤care

➤➤ Inpatient➤rehabilitation➤facility

➤➤ Palliative➤care

➤➤ Post-acute➤care

➤➤ Prospective➤payment➤system

➤➤ Skilled➤nursing➤facility

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better approach to managing Medicare patients across the continuum of PAC services (Morley et al. 2014). A bundled payment approach also opens up opportunities for PAC providers to acquire or merge with other organizations or to pursue joint ventures with other PAC providers.

Chronic conditions are the leading cause of illness, disability, and death in the United States and account for the majority of US healthcare expenditures. Although chronic diseases can affect people in any age group, a high incidence of such conditions occurs among the elderly. As the US population ages, more people will require chronic-disease management and end-of-life care. In addition, because of advances in trauma care, use of evidence-based medicine, and proven public health initiatives, more Americans will survive major illnesses and live well into old age. Life expectancy in the United States was 78 years in 2009 and increased to 79 years in 2013 (Moses et al. 2013). However, though Americans are living longer, chronic disease and a period of significant disability now precede most deaths. Unfortunately, the US healthcare system focuses on curing disease and prolonging life but is poorly designed to provide end-of-life care.

Care for elderly patients in acute care hospitals, IRFs, and hospice facilities is paid for by Medicare Part A. Medicare’s reimbursement for SNF care is limited to 20 days after hospitalization and has a lifetime limitation of 100 days of reimbursement for skilled nursing care. In contrast, Medicaid has no such limitation, so the majority of the care for skilled nursing patients is paid for by Medicaid. However, Medicaid’s reimbursement rate is the lowest of all payers.

As part of its cost-cutting strategy, Medicare is attempting to shift PAC into less expensive outpatient treatment and hospice settings. Medicare spent $25 billion on PAC in 1999, $42 billion in 2005, and $59 billion in 2013, which represents an increase of $34 billion since 1999. In 2013, 42 percent of Medicare patients discharged from an acute care hospital moved to PAC; of these, 20 percent were discharged to an SNF, 17 percent to an HHA, 4 percent to an IRF, and 1 percent to an LTCH. Expenditures on skilled nursing care, which have been increasing at a rate of 9 percent annually, account for the largest proportion of Medicare spending on PAC (MedPAC 2015).

de f I n I t I o n s In most cases, PAC planning is a joint decision-making process involving the patient, the patient’s family, the patient’s physician, and a hospital case manager. The three patient groups with the highest rate of PAC utilization are stroke patients, patients with hip fractures, and patients undergoing joint replacement. Other chronic conditions frequently requiring PAC are cancer, pulmonary disease, congestive heart failure, liver disease, diabetes, renal failure, dementia, Alzheimer’s disease, and Parkinson’s disease.

End-of-life care (EoLC) is a type of PAC provided when a patient is not expected to recover from his condition and further treatment is futile. EoLC does not focus on

End-of-life care (EoLC)

Care➤provided➤to➤

improve➤the➤quality➤of➤

life➤of➤patients➤who➤are➤

facing➤life-threatening➤

disease➤or➤disability➤

and➤are➤not➤expected➤to➤

recover.

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life-sustaining treatments but is designed to maximize patient comfort. Such end-of-life treatment includes hospice care and components of palliative care, which improves the quality of life of patients and their families facing life-threatening illness through the pre- vention and relief of suffering (WHO 2015). Key to this process is the involvement of a multidisciplinary clinical team that manages a family-centric approach to treatment based on the needs and desires of the patient and family.

EoLC includes access to hospice care, services that provide EoLC or palliative care to a patient and her family when the patient is no longer responding to treatment. Hospice services focus on pain relief and help the patient and family cope during the time leading up to the patient’s death. In addition to pain management, hospice offerings encompass a comprehensive mix of services, including bereavement counseling, home health care, hospital services, skilled nursing services, and other residential care services.

He a lt H c a r e a n d us po p u l at I o n de m o g r a p H I c s In the United States, an aging population and an increasing proportion of international immigrants will result in substantial changes over the course of the twenty-first century. Between 2014 and 2060, the US population is projected to increase from 319 million to 417 million. By 2030, it is projected that 1 in 5 Americans will be 65 years or older. Minorities (any group other than non-Hispanic whites) will make up half of all Americans by 2044, and by 2060, 1 in 5 Americans will be foreign born (Colby and Ortman 2015).

Under the assumption of a high level of international migration, the total US population is expected to grow to 458 million by 2050. The level of international migra- tion will play an important role in shaping changes in the size, growth rate, age structure, and racial and ethnic composition of the US population (Ortman and Guarneri 2015). The US healthcare system is facing the challenge of meeting their need for chronic care.

The Affordable Care Act has expanded the insurance coverage and access to healthcare for many Americans; however, most women and men in the United States are covered by insurance obtained through the workplace. Women are more susceptible to losing cover- age because they are almost twice as likely as men to be covered as dependents—if they become widowed or divorced or their husbands become unemployed, they also lose insur- ance coverage. A little more than one-third (35 percent) of women receive health coverage through their jobs, compared to 44 percent of men.

Affordability of care is also a key issue for women, who are disproportionately low income. More women than men report skipping needed care and forgoing prescription medicines because of the out-of-pocket costs for premiums and copayments (Kaiser Family Foundation 2013).

Their lower incomes and eligibility for the Women, Infants, and Children program have historically meant more women than men qualify for Medicaid. In 2013, 12 percent

Palliative care

Healthcare➤approach➤

that➤improves➤the➤

quality➤of➤life➤of➤

patients➤and➤their➤

families➤facing➤life-

threatening➤illness➤

through➤the➤prevention➤

and➤relief➤of➤suffering.

Hospice care

Services➤that➤provide➤

EoLC➤or➤palliative➤care➤

to➤a➤patient➤and➤her➤

family➤when➤the➤patient➤

is➤no➤longer➤responding➤

to➤treatment.

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of women were covered under Medicaid and comprised more than two-thirds of adult Medicaid beneficiaries (Kaiser Family Foundation 2013).

For frail and elderly women and their families, long-term care is a crucial concern. Women are more likely than men to need long-term care services; as a result, women comprise 73 percent of nursing home residents and home health care clients. Women who need long-term care services often pay large out-of-pocket costs for nursing home and community-based care, as a result of the limited coverage for long-term care under both Medicare and private policies (Kaiser Family Foundation 2013).

In pat I e n t re H a b I l I tat I o n fa c I l I t I e s Inpatient rehabilitation facilities (IRFs) are growing in importance as the need for restor- ative services for traumatic injuries, acute illnesses, and chronic conditions increases. To qualify as a Medicare IRF, 75 percent of admitted patients must require intensive reha- bilitation for one of ten specified physical conditions, such as stroke, spinal cord injury, head trauma, burns, hip fracture, and amputation. In 2013, about 79 percent of IRFs were hospital-based units and the remaining 21 percent were freestanding facilities. However, although the total number of facilities is greater, hospital-based IRFs usually have fewer inpatient rehabilitation beds than freestanding IRFs, so they only account for 53 percent of patients going to IRFs after acute hospital discharge (MedPAC 2015).

Large payment differences exist for the patients treated in IRFs versus skilled nurs- ing facilities (SNFs) for the same conditions because they use different Medicare payment models. As part of Medicare’s Conditions of Participation, at least 60 percent of an IRF’s patient population must fall in the “complex rehabilitation need” category. The intensity of such rehabilitation requires a higher cost structure, and as a result, reimbursement is higher. Total Medicare payments per stay in 2012 (including the add-on payments made to many IRFs for having a teaching program or treating low-income patients or high-cost outlier cases) averaged 64 percent more for patients treated in IRFs than for those treated in SNFs. The average occupancy rate at IRFs in 2012 was 63 percent (MedPAC 2015).

In communities where IRFs are located, more PAC patients are admitted to an IRF than to an SNF. PAC services are offered in numerous settings, but physicians prefer to transition patients to IRFs because they provide a minimum of three hours of intensive rehabilitation therapy per day.

IRFs are under increasing financial pressure to meet operations costs and invest in the latest healthcare technologies. In addition, Medicare is exploring a site-neutral reimburse- ment policy that could lower program spending relative to current policy by between $1 billion and $5 billion (MedPAC 2015). As a result, IRFs are being forced to redefine their roles in the spectrum of PAC services as the requirement for quality rehabilitation services becomes a local and national concern (see Exhibit 10.1). Specifically, IRFs are evaluating

Inpatient rehabilitation

facility (IRF)

Facility➤that➤provides➤

restorative➤services➤for➤

traumatic➤injury,➤acute➤

illness,➤and➤chronic➤

conditions.

Skilled nursing facility

(SNF)

Facility➤that➤treats➤

elderly➤patients➤with➤

chronic➤diseases➤

who➤need➤nursing➤

care,➤rehabilitation,➤

and➤other➤healthcare➤

services.

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expanding their service lines to include home health care, outpatient rehabilitation, and telemedicine to provide cost-effective care to the growing elderly population.

HealthSouth is one of the nation’s largest providers of PAC services, offering both facility-based and home-based post-acute services in 33 states and Puerto Rico through its network of IRFs, HHAs, and hospice agencies. HealthSouth’s hospitals provide rehabilitative care to patients who are recovering from conditions such as stroke and other neurological disorders; orthopedic, cardiac, and pulmonary conditions; brain and spinal cord injuries; and amputations.

In 2014, HealthSouth provided care to patients through 107 IRFs (32 of which operate as joint ventures with acute care hospitals) and 25 hospital-based HHAs. Health- South acquired Encompass Home Health and Hospice in 2014, which added 107 home health care locations and 20 hospice locations. The existing 25 HealthSouth HHAs were integrated into Encompass during 2015.

exHIbIt 10.1 The Network of Post-acute Care

Services

Medical Clinic

Centers of Excellence

Home Health

Assisted Living

Skilled Nursing

Nursing Home

Hospice

Inpatient Rehabilitation

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In 2014, these HealthSouth facilities generated $2.4 billion in revenue from 134,515 inpatient discharges and 739,227 outpatient visits. Nationally, HealthSouth represents 9 percent of the IRF market share, 18 percent of licensed beds, and approximately 21 percent of patients (HealthSouth 2014).

m e d I c a r e r e I m b u r s e m e n t o f I n pat I e n t r e H a b I l I tat I o n f a c I l I t I e s

Medicare reimburses IRFs through its prospective payment system (PPS). The PPS motivates IRFs to control costs by offering a predetermined fixed payment per patient case, regardless of the costs the IRF incurs in rehabilitating the patient. PPS has established payment rates for 385 rehabilitation services, called case-mix groups. Patients are assigned to these categories on the basis of their diagnosis, age, level of functional or cognitive impairment, and comor- bidity. PPS incorporates the conversion factor, which adjusts payment levels on the basis of comorbidity, local wage rates, rural status, and income. More recently, CMS has implemented new payment methodologies that allow IRFs to assume financial risk through ACOs and to participate in CMS’s bundled payment initiatives, which allow beneficiaries the freedom to select the provider of their choice. Some ACOs have established partnerships with selected PAC providers. Under this arrangement, ACOs select PAC partners by reviewing the cost and quality metrics for each provider and its geographic coverage. Hospital discharge-planning teams then choose from the selected pool of PAC providers when referring patients. Because some ACOs are at financial risk for the cost of care, CMS could consider allowing those ACOs to establish formal networks to direct beneficiaries to high-value providers (MedPAC 2015).

r e H a b I l I tat I o n s e r v I c e s I n a c u t e c a r e H o s p I ta l s

Inpatient rehabilitation is the most frequently opened new clinical service in acute care hospitals. In 2015, 900 hospitals had an IRF and 185 also had an SNF (MedPAC 2015). These organizations may have an advantage over other providers because of their ability to transition patients into PAC care to improve quality and maximize total facility revenue.

In 2013, approximately 35 IRFs closed; 80 percent were hospital-based units. How- ever, at the same time, almost two-thirds of new IRFs that year were hospital-based units. This statistic suggests that there are challenges related to hospital-based units, most likely related to reimbursement and cost, whereas some acute care hospitals with high census may find that IRF units help reduce inpatient lengths of stay and free up hospital beds for additional admissions (MedPAC 2015).

sK I l l e d nu r s I n g fa c I l I t I e s t r e n d s

While acute care hospitals are experiencing increasing pressure to reduce length of stay, SNFs are experiencing strategic opportunities to work collaboratively with acute care hospitals to

Prospective payment

system (PPS)

Reimbursement➤

mechanism➤for➤

inpatient➤healthcare➤

services➤that➤pays➤a➤

predetermined➤rate➤for➤

treatment➤of➤specific➤

illnesses.

Comorbidity

Coexistence➤of➤one➤

or➤more➤medical➤

conditions➤in➤addition➤

to➤the➤initial➤diagnosis.

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place discharged patients. In 2012, the average SNF occupancy rate was high at 82 percent. The average annual compensation for a nursing home administrator in 2015 was $99,566, with the top 10 percent earning $120,667 (Salary.com 2015).

Acute care hospitals are increasingly discharging orthopedic surgical patients to SNFs for rehabilitation services. To meet this increased demand, the number of SNFs has been growing at a rate of 12 percent annually—in 1995, a Medicare census found 13,945 SNFs, but by 2013, 15,632 SNFs furnished 2.4 million Medicare-covered stays to 1.7 million fee-for-service beneficiaries. In addition, Medicare expenditures for SNF services increased from $10.9 billion in 1999 to $15.7 billion in 2004 and to $28.8 billion in 2013. The data show that 67 percent of Medicare beneficiaries discharged from acute care hospitals go home, with the remainder discharged to PAC facilities. SNFs receive the largest number of PAC patients, specifically 13 percent of Medicare acute care hospital discharges (MedPAC 2015).

p a l l I at I v e c a r e

To palliate means to make comfortable by treating a person’s symptoms from an illness. Hospice and palliative care both focus on helping a person be comfortable by addressing issues causing physical or emotional pain or suffering. Hospice and other palliative care providers have teams of people working together to provide care. The goals of palliative care are to improve the quality of a seriously ill person’s life and to support that person and his family during and after treatment (CaringInfo 2015b).

When healthcare organizations provide palliative care services, patients have the opportunity to request information related to EoLC. Informed patients and families are allowed to participate in a care plan that includes hospital admissions, outpatient services, home health care, and PAC. These palliative care plans can reduce costs by decreasing patients’ length of stay; reducing unnecessary tests, treatments, and medications; and incorporating PAC services. Palliative care allows patients and families to discuss the most appropriate healthcare options and incorporate advance care planning (see Highlight 10.1). This accommodation may help provide a sense of reassurance knowing their values and wishes were addressed.

The majority of US hospitals have palliative care programs supported by outpatient services, nursing homes, and home health care agencies. The optimal model for provid- ing palliative care is an interdisciplinary care team that integrates healthcare providers from different backgrounds and skill sets who work collaboratively to meet the complex needs of palliative care patients. This interdisciplinary team is composed of credentialed physicians, nurses, social workers, spiritual counselors, and other healthcare practitioners whose expertise could optimize the quality of life for those patients (Hospitals in Pursuit of Excellence 2012). The following link from Allison Cuff Shimooka (2014) at The Advisory Board Company leads to a video on palliative care: http://www.advisory.com/research/ physician-executive-council/multimedia/video/2014/misconceptions-about-palliative-care.

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The palliative care team is responsible for conducting education and evaluating a patient’s medical condition. Some palliative care team members address the patient’s physical needs, such as managing pain and other symptoms; some manage referrals or coordinate discharge planning; and a chaplain can provide spiritual support and counsel- ing to patients. The entire team works together to develop and revise care plans to ensure the patient’s goals are met.

Ho s p I c e p at I e n t s ’ u s e o f e n d - o f -l I f e c a r e

Recognizing that a high percentage of total healthcare dollars is spent on EoLC, CMS cre- ated a unique hospice benefit designed to improve the quality of EoLC while also reducing its cost. This benefit, combined with a growing elderly population, creates a significant strategic opportunity to expand hospice services across the United States.

r o l e o f H o s p I c e

Hospice care contrasts with curative care in that it is not designed to cure an illness or lengthen life but emphasizes the management of pain. Hospice focuses on relieving symptoms

Highlight 10.1 Advance Care Planning

Advance care planning➤is➤about➤making➤decisions➤about➤the➤healthcare➤a➤person➤wants➤to➤

receive➤if➤she➤becomes➤unable➤to➤speak➤for➤herself.➤It➤allows➤a➤patient➤time➤to➤speak➤to➤her➤

family➤about➤her➤wishes➤and➤plan➤for➤the➤future.➤It➤includes➤the➤following➤(CaringInfo➤2015a):

•➤ Getting➤information➤on➤the➤types➤of➤life-sustaining➤treatments➤available

•➤ Deciding➤what➤types➤of➤treatment➤a➤person➤would➤or➤would➤not➤want➤should➤she➤

be➤diagnosed➤with➤a➤life-limiting➤illness

•➤ Sharing➤personal➤values➤with➤loved➤ones

•➤ Completing➤advance➤directives➤to➤put➤into➤writing➤what➤types➤of➤treatment➤a➤

patient➤would➤or➤would➤not➤want➤and➤whom➤she➤chooses➤to➤speak➤for➤her➤should➤

she➤be➤unable➤to➤speak➤for➤herself

For➤more➤information,➤consult➤the➤National➤Hospice➤and➤Palliative➤Care➤Organiza-

tion’s➤website:➤www.caringinfo.org/i4a/pages/index.cfm?pageid=3277.

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and supporting patients with a life expectancy of months, not years, and their families. However, palliative care may be given at any time during a person’s illness, from diagnosis through curative or noncurative treatment. Most hospices have a set of defined services, team members, rules, and regulations. Hospice services help the patient and family members handle the emotional, social, and spiritual aspects of terminal illness and help preserve the patient’s dignity (CaringInfo 2015b).

Most hospice programs are run by not-for-profit organizations. Some are affiliated with hospitals, nursing homes, or home health care agencies. The first hospice was estab- lished in 1974 in New Haven, Connecticut. In 2013, more than 1.3 million Medicare beneficiaries received hospice services from more than 3,900 providers, and Medicare hospice expenditures totaled about $15.1 billion (MedPAC 2015).

To be admitted into a hospice program, the patient must have a physician’s refer- ral and a life expectancy of six months or less. Most hospice care is provided in the home by a family caregiver; however, inpatient hospice care is available for pain and symptom management for periods of up to five days. During the referral process, a member of the hospice staff meets with the patient’s physician to talk about the patient’s medical history, symptoms, and life expectancy. They also develop a plan of care for the patient and discuss the hospice philosophy and the patient’s expectations.

t H e m e d I c a r e H o s p I c e b e n e f I t

The Medicare hospice benefit was established in 1982 and was designed to provide families with the resources to care for their dying loved ones at home or in a hospice inpatient setting. The benefit covers palliative and support services for terminally ill Medicare beneficiaries who have a life expectancy of six months or less if the terminal illness follows its normal course. Medicare spending for hospice care increased dramatically from $2.9 billion in 2000 to $15.1 billion in 2012, an increase of 400 percent. This jump was driven by an increase in the number of people electing hospice care and increasingly lengthy stays in hospice facilities. In 2013, more than 1.3 million Medicare beneficiaries received hospice services, and Medicare expenditures totaled about $15.1 billion—which constituted no increase from 2012 (MedPAC 2015).

When a person uses the Medicare hospice benefit, his condition must be certified by a hospice physician or personal physician. A written plan of care must be established and maintained by an interdisciplinary group (which must include a hospice physician, a registered nurse, a social worker, and a counselor) in consultation with the patient’s attending physician, if any. A broad set of services is included, such as nursing care, physician services, counseling and social work services, hospice aide (also referred to as home health aide) and homemaker services, short-term hospice inpatient care (including respite care), drugs to control pain and nausea, medical supplies, home medical equipment, bereavement services for the patient’s family, and other services for palliation of the terminal condition (MedPAC 2015).

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H o s p I c e a n d t H e c o n t I n u u m o f c a r e

Healthcare providers across the continuum of care benefit from cooperating with hospices to provide EoLC. Hospitals with a hospice program have higher occupancy and shorter lengths of stay and are more profitable. In a research study of almost 40,000 patients who died in 2011 of poor-prognosis cancer comparing a control group with those receiving hospice care, the latter had significantly lower rates of hospitalization, intensive care unit admission, and invasive procedures at the end of life, as well as significantly lower total costs during the last year of life (Obermeyer et al. 2014). An effective hospice program can improve acute care hospital performance by decreasing length of stay, reducing ancillary charges, and preventing unnecessary inpatient utilization by reducing hospital readmission rates and emergency department visits.

This author cowrote a research study in 2005 that showed hospitals that had a hospice program were generally larger and had more clinically complex patients. We also found that hospitals with a hospice had an average length of stay of 10.5 days, while those without a hospice had an average length of stay of 12.8 days. These statistics show that hospitals without hospice programs may be missing an opportunity to reduce costs and improve efficiency (Harrison, Ford, and Wilson 2005).

However, the provision of hospice care can be a complex challenge for healthcare organizations. Typically, hospital-based inpatient hospice care is provided, through a con- tract, by outside hospice services. Patients transferred to hospitals from their homes are protected by Medicare regulations that mandate service levels and visits be congruent across care sites. This standard usually requires a minimum of one interdisciplinary hospice team member contact per day in the hospital (primarily visits), supplemented with volunteer visits and 24-hour nursing care. In spite of this requirement, the hospice must use most of its Medicare payment to reimburse the hospital for patient costs. In addition, having the patient in the hospital can increase the likelihood that a patient will choose to quit hospice and switch to curative treatment because the hospital staff are most comfortable with the latter level of care. This shift may defeat the purpose of moving to hospice care and add to the overall cost of care. Leaders cannot ignore hospice services in the planning process, both because hospice care may constitute a gap in community services and because service provision may require collaboration with an outside agency.

c u lt u r a l d I v e r s I t y a n d H o s p I c e s e r v I c e s

A 2011 study found that, of patients who received hospice care in the United States, 82.8 percent were white, 8.5 percent were African American, and 6.2 percent were Hispanic. When compared to overall population rates, these statistics reveal an underutilization of hospice services among minority groups. Local initiatives, such as providing education on hospice services to culturally diverse groups, can increase hospice and other EoLC utiliza- tion rates among these culturally diverse populations (NHPCO 2012).

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Between 2010 and 2050, the share of the non-Hispanic white US population will decline substantially. The African American, American Indian, Alaska Native, and Native Hawaiian and other Pacific Islander populations will maintain their shares of the popula- tion. The Asian population will increase. The Hispanic population will increase substantially (Ortman and Guarneri 2015). This important demographic trend will affect the utilization of hospice and other healthcare services.

ad u lt He a lt H day ca r e ce n t e r s Adult health day care centers, which provide a combination of social and medical services, are designed to keep senior citizens in the community as long as possible, thereby reducing admissions to nursing homes. These centers also provide services to patients who require PAC and assist their family caregivers. For example, an adult health day care center can provide meals, transportation, socialization, therapeutic activities, healthcare treatment, and health referrals. Respite services for caregivers include time to rest and self-esteem or family-relations improvement programs, both designed to improve the caregiver’s psycho- logical attitude. To be effective, adult health day care centers need to incorporate activities and offer services specific to the culture of their patient and caregiver population and have been found to decrease caregiver stress (Klein et al. 2014).

The cost of adult health day care centers varies widely. It ranges from $40 a day to more than $100 per day depending on the services offered, reimbursement, and region. The average cited by the National Adult Day Services Association is $61 per day (Seniorresource. com 2015). Adult health day care is not usually covered by Medicare. Some coverage may be available through state or federal programs (e.g., Medicaid, Older Americans Act, Veterans Administration). The inclusion of “health” in the type of day care center indicates that it provides elements of healthcare and not just socialization and babysitting for seniors. The designation of adult day healthcare in many states is reserved for those centers that have been licensed by their states to provide medical care similar to what might be provided by a state-licensed assisted-living community or by a state-licensed nursing home (Seniorresource.com 2015).

Norway has a unique and comprehensive system for elder care that includes adult health day care. Norway spends more per capita on caring for its elderly than any other developed nation. Nearly 10 percent of its annual budget goes toward the provision of facilities and services to fulfill the government’s guarantee to its citizens that all will have a cost-free private apartment after retirement in addition to the assistance and care that they might need. Services are provided locally and provide various levels of care based on individual needs. They include home visits, home care systems, day care systems, residential apartments, and nursing homes. Day care may be considered if an elder needs more than just periodic visits to his home. For example, he may need daily help in preparing meals, dressing, attending social activities, and so on. Day care services are provided and buses are used for pickup and return between homes and day care centers, all free of cost (Gupta 2013).

Adult health day care

center

Facility➤that➤provides➤

services➤to➤patients➤

requiring➤long-term➤

care➤and➤helps➤family➤

caregivers➤with➤their➤

responsibilities.

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Strategic planners should consider the approaches that countries around the world are taking to deal with the growing elderly population. In Norway, communities are required to provide a child care center within walking distance of parents’ homes. This system has been replicated to provide adult health day care centers in similar locations. Elderly people living at home with their families can walk to these senior centers during the day and engage in a wide range of activities. Despite the fact that adult day care centers were developed with the intention of reducing admissions to nursing homes, they currently pose no threat to nursing homes.

More than 1.62 million patients used Medicaid-financed nursing home services in 2011, a small increase from 2010 but a 4.9 percent decline from 2000. The number of nursing home facilities also declined slightly between 2013 and 2014. The decline in facili- ties most likely reflects the expansion in some states of home- and community-based services, which allow people to remain in their homes rather than in an institution—a positive move for our country (MedPAC 2015).

Faced➤with➤a➤rapidly➤growing➤elderly➤population,➤healthcare➤providers➤have➤a➤strategic➤op- portunity➤to➤position➤themselves➤as➤integrated➤providers➤of➤PAC.➤As➤the➤population➤ages➤and➤ the➤prevalence➤of➤chronic➤disease➤increases,➤the➤need➤for➤PAC➤in➤IRFs,➤SNFs,➤adult➤health➤ day➤care➤centers,➤and➤patients’➤homes➤will➤grow➤significantly.➤More➤important,➤acute➤care➤ hospitals➤have➤an➤opportunity➤to➤develop➤an➤integrated➤model➤of➤PAC➤services➤and➤imple- ment➤EoLC➤or➤hospice➤programs.➤When➤exploring➤any➤new➤business➤venture,➤strategic➤plan- ners➤need➤to➤ensure➤that➤the➤reimbursement➤they➤will➤receive➤for➤providing➤services➤is➤suf- ficient➤to➤make➤the➤venture➤profitable.➤Given➤the➤reality➤of➤ACOs➤and➤the➤bundled➤payment➤ system,➤and➤given➤that➤Medicare➤and➤Medicaid➤reimbursement➤for➤PAC➤services➤is➤often➤less➤ than➤the➤amount➤the➤provider➤will➤need➤to➤spend➤to➤deliver➤the➤services,➤this➤factor➤is➤espe- cially➤important➤to➤consider➤when➤exploring➤PAC➤ventures.

r e v I e w Q u e s t I o n s

1.➤ Many➤elderly➤patients➤are➤being➤discharged➤from➤acute➤care➤hospitals➤after➤undergo- ing➤procedures➤such➤as➤knee-replacement➤surgery.➤They➤need➤extensive➤rehabilita- tion➤services.➤From➤a➤strategic➤planning➤perspective,➤investment➤in➤what➤type➤of➤PAC➤ facility➤would➤be➤best➤to➤pursue,➤given➤these➤circumstances?

2.➤ Research➤shows➤the➤number➤of➤elderly➤Americans➤with➤chronic➤health➤conditions➤is➤ growing➤significantly.➤What➤strategic➤implications➤does➤the➤increasing➤demand➤for➤ skilled➤nursing➤care➤have➤for➤the➤nursing➤home➤industry?

s u m m a r y

e x e r c I s e s

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3.➤ Given➤the➤demographics➤of➤the➤US➤population,➤what➤do➤you➤see➤as➤strategic➤planning➤ opportunities➤in➤the➤area➤of➤hospice➤services?

c o a s ta l m e d I c a l c e n t e r e x e r c I s e

What➤type➤of➤PAC➤does➤Coastal➤Medical➤Center➤(CMC)➤provide?➤What➤is➤its➤competition➤in➤ this➤area?

c o a s ta l m e d I c a l c e n t e r Q u e s t I o n s

1.➤ Outline➤a➤PAC➤plan➤appropriate➤for➤CMC. 2.➤ Who➤should➤be➤involved➤in➤strategic➤planning➤for➤PAC➤services,➤and➤at➤what➤point➤

should➤strategic➤planners➤involve➤them? 3.➤ How➤will➤you➤know➤if➤CMC’s➤PAC➤plan➤is➤a➤success?

I n d I v I d u a l e x e r c I s e : n u r s I n g H o m e s e l e c t I o n

Your➤grandmother➤is➤being➤discharged➤from➤an➤acute➤care➤hospital➤in➤your➤local➤community,➤ and➤her➤physician➤has➤determined➤she➤needs➤to➤be➤admitted➤to➤a➤nursing➤home.➤Using➤the➤ Nursing➤Home➤Compare➤website➤(www.medicare.gov/nursinghomecompare/search.html),➤ answer➤the➤following➤questions.

1.➤ Which➤three➤nursing➤homes➤would➤you➤recommend➤in➤your➤local➤community?➤ 2.➤ Of➤these➤three,➤which➤one➤would➤you➤choose➤and➤why? 3.➤ Because➤your➤grandmother➤is➤a➤Medicare➤patient,➤what➤payer➤would➤pay➤for➤her➤

nursing➤home➤care➤and➤for➤how➤long? 4.➤ Does➤this➤payment➤rate➤make➤your➤grandmother➤an➤attractive➤nursing➤home➤patient? 5.➤ What➤are➤the➤financial➤implications➤if➤your➤grandmother➤cannot➤return➤home➤to➤her➤

independent➤living➤facility➤and➤becomes➤a➤long-term➤nursing➤home➤resident?➤

CaringInfo.➤2015a.➤“Advance➤Care➤Planning.”➤National➤Hospice➤and➤Palliative➤Care➤Organiza-

tion.➤Accessed➤September➤11.➤www.caringinfo.org/i4a/pages/index.cfm?pageid=3277.

———.➤ 2015b.➤ “Palliative➤ Care.”➤ National➤ Hospice➤ and➤ Palliative➤ Care➤ Organization.➤

Accessed➤April➤29.➤www.caringinfo.org/i4a/pages/index.cfm?pageid=3354.

r e f e r e n c e s

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http://www.caringinfo.org/i4a/pages/index.cfm?pageid=3277

http://www.caringinfo.org/i4a/pages/index.cfm?pageid=3354

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