Three New Reports On Medicare Spending For Long-term Care

By Author: Ruskin Booth
Total Articles: 14
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Three new reports released in October examine the high use of hospital and other Medicare-covered services and the associated costs of medical care for Medicare beneficiaries who live in nursing homes and other long-term-care facilities.

“What the experts have found out is that Medicare beneficiaries who live in long-term care facilities account for a large and preventable portion of Medicare spending,” noted Alan Weinstock, insurance broker at MedicareSupplementPlans.com. “The primary reasons costs for this group are elevated is because of high rates of hospitalization, visits to the emergency department and use of skilled nursing care.”

Background on the Three Medicare Spending Reports

The three reports found that in 2006 residents of long-term care facilities made up 5% of all Medicare beneficiaries. However, spending on long-term Medicare beneficiaries accounted for 9% of Medicare spending. That is approximately $25 billion.

Additionally, they found that Medicare beneficiaries living in long-term care facilities in 2006 cost an average of $14,538 each. This is more than double the average ...
... spending for other beneficiaries.

"Culture of Hospitalization" Cited as Reason for Disparity

According to the three reports the reason for the disparity in costs at long-term facilities is the “culture of hospitalization.” Long-term care providers indicated that there is a “strong emphasis” on hospitalization for Medicare beneficiaries. Naturally, this puts a strain on Medicare funding because it covers all emergency room visits, treatments and hospitalizations.

Another reason for an increase in hospital visits with Medicare beneficiaries cited by the three reports is a shortage of qualified staff at long-term care facilities, combined with certain protocol and license restrictions.

Interestingly, a large portion of hospitalizations of long-term care residents appeared to occur within the first few months of their stay indicated the reports. This may be due to the fact that when patients are transitioning, medical records can get misplaced. Without access to Medicare beneficiaries’ medical histories, misdiagnoses and prescription errors may occur.

Reports Indicate Cost Containment Possible

On the upside the studies indicated that cost containment was possible. Reducing hospital stays of long-term Medicare beneficiaries by 25% could cut Medicare spending by more than $2.1 billion in 2010. This could result in Medicaid savings as well since Medicaid pays for over 60% of nursing home residents.

Legislators who are looking for ways to cut Medicare costs in accordance with federal health reform might consider long-term care spending as a target. In fact, efforts are under way to address the issue. One suggested provision would deny hospitals payment if they readmitted certain patients within 30 days of their first visit.

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