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As Nursing Homes Chase Lucrative Patients, Quality of Care Is Said to Lag
The New York Times
Promises of “decadent” hot baths on demand, putting greens and gurgling waterfalls to calm the mind: These luxurious touches rarely conjure images of a stay in a nursing home.
But in a cutthroat race for Medicare dollars, nursing homes are turning to amenities like those to lure patients who are leaving a hospital and need short-term rehabilitation after an injury or illness, rather than long-term care at the end of life.
Even as nursing homes are busily investing in luxury living quarters, however, the quality of care is strikingly uneven. And it is clear that many of the homes are not up to the challenge of providing the intensive medical care that rehabilitation requires. Many are often short on nurses and aides and do not have doctors on staff.
A report released in 2014 by the Department of Health and Human Services’ Office of the Inspector General found that 22 percent of Medicare patients who stayed in a nursing facility for 35 days or less experienced harm as a result of their medical care. An additional 11 percent suffered temporary injury. The report estimated that Medicare spent $2.8 billion on hospital treatment in 2011 because of harm experienced in nursing facilities.
“These nursing homes were not built for this purpose,” said Dr. Arif Nazir, an associate professor of clinical medicine at Indiana University who studies geriatrics. He said many patients leave hospitals with acute medical needs, before infections have been fully treated, or as they adjust to new medications.
“These patients are leaving the hospital half-cooked, and believe me, the latter part of the cooking is the hardest part,” he said.
Competition for these patients has become intense because Medicare, the health insurance program for older adults, pays 84 percent more for short-term patients than nursing homes typically get from Medicaid, the health insurance program for the poor, for long-term residents.
At the same time, hospitals are trying to cut costs by pushing some patients out early — like those who have had hip replacement or heart surgery, for example. Not quite ready to go home, they need continuing care somewhere. And for older adults, Medicare usually pays the bill.
The combination of factors has created a bull market in the once-struggling industry as investors clamor to snatch up homes with the most potential to bring in short-term patients. Sale prices of nursing homes averaged $76,500 per bed last year — the second consecutive year of record-breaking prices, according to Irving Levin Associates, which analyzes the senior housing market.
So lucrative are Medicare payments that some homes have decided not to take lower-paying Medicaid patients at all.
The shifting landscape, some say, marginalizes poor long-term residents with extensive medical needs. “This focus on Medicare, Medicare, Medicare has pushed out people in the custodial care world,” said Anthony Chicotel, a staff lawyer at California Advocates for Nursing Home Reform, who says he fields calls at least once a week from residents who are being evicted because their Medicare coverage, which lasts 100 days, is expiring and the residents will transition to lower-paying Medicaid insurance. “They’re being pushed out, and they don’t have anywhere to go, really, that can take care of them.”
Representatives of nursing homes acknowledge that the challenges are substantial, but they are optimistic about the progress they are making.
“It’s uneven, but I think, that said, we’re trending in the right direction,” said Dr. David Gifford, the senior vice president of quality and regulatory affairs at the American Health Care Association, an industry trade group. “I think you’re seeing a much greater linking of quality, and an emphasis on it,” he added.
Dr. Gifford and others say they are paying close attention to quality — not only because it is the right thing to do, but because hospitals and large health systems are beginning to demand it. Under the new health care law, hospitals may be penalized if too many of their patients are readmitted within a certain time.
“Hospitals are starting to get really worried, and when hospitals are worried, skilled nursing facilities are worried, because they are their sources of patients,” said David Grabowski, a professor of health care policy at the Harvard Medical School.
Promises of Care
Dr. Lois Johnson-Hamerman, a retired neonatologist, said she thought she had done her homework when she checked into the Watermark at Logan Square, a nursing facility in Philadelphia.
The home had a reputation for quality and got high marks from the federal government. Until a recent revision, its website promised “top-notch health care” with amenities including a staff willing to administer a “decadent hot bath” at any hour of the day.
But just one month after arriving at Watermark for short-term rehabilitation of an injured foot in 2012, Dr. Johnson-Hamerman ended up in the emergency room with a severe bedsore that had become dangerously infected. Far from the service she said she had been promised, she said the workers never gave her a full bath or shower, were slow to respond to her requests to have her diaper changed and did not turn her every few hours, a crucial step in preventing bedsores.
She said she left the facility only after friends, including doctors and nurses, became so horrified by her care that they insisted that she be taken to a hospital.
Geriatric researchers call this disconnect the “chandelier effect.” Attractive lobbies and enticing amenities do not always mean that a home provides good medical care.
In reality, said Dr. Steven Handler, a geriatrician and assistant professor at the University of Pittsburgh School of Medicine, many nursing homes are struggling to provide consistent, quality care despite genuine efforts. “The nursing homes are kind of stuck in an older model that is based on a very small operating margin, low-staffing model and low physician presence,” he said.
Dr. Johnson-Hamerman, who is 87, is suing Watermark over what she describes as negligent care.
“At least I’m still here,” she said recently at her home. “But where would I be if I didn’t have the friends and resources to do something about it?”
C. Jill Hofer, a spokeswoman for Watermark, said that the home was committed to providing quality care and that it denied the allegations in the lawsuit.
Bull Market for Short-Term Homes
The nursing home industry has long argued that it relies on higher Medicare payments to offset the rates it receives from Medicaid, which usually pays for the care of long-term residents.
And indeed, even though facilities earned a 2 percent overall profit in 2013, they lost about 2 percent on non-Medicare patients, according to the Medicare Payment Advisory Commission, or Medpac, an agency of Congress.
But in recent years, that focus on Medicare patients has intensified as many long-term residents have moved to assisted-living facilities and hospitals have sought to discharge patients earlier. On a typical day in 2000, about 9 percent of residents in an average nursing home were covered by Medicare, according to federal data. By 2014, that had risen to 15 percent.
Some companies are now eliminating Medicaid payments entirely by building homes solely for the more lucrative short-term patients.
Santé Partners, a developer in Arizona, recently opened four nursing homes that do not accept any long-term residents. A fifth is set to break ground this summer.
The buildings resemble hotels, with high-quality restaurants and private rooms that have kitchenettes. Developers say their singular focus allows them to provide better care.
“I think pretty much every company now is going in this direction,” said C. Mark Hansen, the president and chief executive of Santé Partners.
Some for-profit chains have aggressively increased their numbers of Medicare patients. In California, the share of Medicare patients at several large chains has far outpaced the state average, according to an analysis of state nursing home data by The New York Times.
On a typical day in 2012, about 11 percent of beds in California nursing homes were occupied by Medicare patients, The Times’s analysis showed.
But at HCR ManorCare, one of the nation’s largest chains, 32 percent were Medicare patients at its California nursing homes. At the Ensign Group, a large chain based in California, Medicare covered 20 percent of patients on a typical day in 2012.
HCR ManorCare said that it had invested in treating patients with complex medical needs and that that helped explain why its percentage of Medicare patients was higher than the state average. A spokeswoman for Ensign declined to comment.
Ensign is one of several chains that has recently paid federal fines to settle charges that they exaggerated the therapy needs of patients to increase Medicare payments. The company paid $48 million in 2013 to settle such claims. In October, a large Canadian company, Extendicare Health Services, paid $38 million in a similar case.
Even homes with a history of poor care are marketing their high-end amenities. The Medford Multicare Center for Living on Long Island recently opened a wing intended for short-term care known as “The Lux at Medford.” Guests have access to a putting green, a model apartment and a parked PT Cruiser to teach them how to resume their day-to-day activities.
The New York State attorney general sued the facility last year over issues of quality, and seven employees were indicted on a range of charges related to the death of Aurelia Rios, a patient in the facility’s ventilator unit. Federal officials recently placed the home on a watch list of the nation’s poorest-performing facilities.
Jason Newman, a spokesman for the home, says the owners of Medford dispute the charges. “The owners of this facility care very, very much about this place,” he said.
Claims of Lapses, and Death
Deaths attributed to lapses in care are not uncommon. In 2010, Mary Dwyer checked into Harborview Healthcare Center in Jersey City to recuperate after dislocating her shoulder in a fall.
Ms. Dwyer, who was 87, planned to return home, but her condition deteriorated rapidly because of what her family described as negligent care. Staff members were so overworked that Ms. Dwyer was not fed properly and not repositioned frequently in her bed, according to a lawsuit the family later filed in New Jersey state court alleging negligence and wrongful death.
In a month, Ms. Dwyer lost 20 pounds and developed a bedsore so severe that it exposed her bone.
She was treated at a hospital for her injury, and she died about a month later. Last year, a jury awarded her family more than $13 million.
The amount has since been reduced to $4.75 million and the case is being appealed by the nursing home. A spokeswoman for Harborview said the company denied the charges and maintained an outstanding record for quality.
“Nobody really took responsibility,” Ms. Dwyer’s daughter, Henrietta Dwyer, said recently. “It seemed nobody was accountable for anything.”
Industry specialists say that competition is so intense that eventually quality will prevail, as hospitals and insurers, who cover some Medicare patients, will balk at sending patients to homes that perform poorly.
Hospitals now pay penalties if too many patients are readmitted.
And under new payment models, health systems are beginning to coordinate the care of patients even after they leave the hospital. They are rewarded for keeping costs low, but they also must prove that certain quality goals are met.
“It’s happening at a head-spinning rate,” said Dr. Nazir of Indiana University. “It has been a very positive thing.”
Dr. Gifford of the industry trade group said his group’s members had reduced re-hospitalization rates by 14 percent. And the group has supported other measures to improve quality, he said, including one passed by Congress last year that will withhold a percentage of Medicare payments from facilities, who can then earn back some of the money if they meet certain standards.
Mr. Hansen, the chief executive of Santé Partners, said his facilities did not bring in high profits because the company invests heavily in quality. That investment pays off, he said, because he can demonstrate that his facilities provide good care at a lower cost than, say, a hospital.
“It’s bringing down the total cost of the health care spend,” Mr. Hansen said.
Still, some insurers and hospitals continue to send patients to homes with poor records.
Kaiser Permanente, which combines a nonprofit insurance plan with its own hospitals and clinics, sends patients to a network of outside nursing homes in Maryland and Virginia that the organization says meet its “high standards of care.” However, of the 12 so-called core nursing homes in Kaiser’s network, four held a one-star rating for their health inspection. One was ranked five stars, the highest score.
After The New York Times contacted Kaiser, a spokesman said it would end its association with one of the poorly rated homes, Commonwealth Health & Rehab Center in Fairfax, Va.
The spokesman said that the company sends Kaiser doctors and staff members to the facilities to treat its patients, and that most of them are placed in homes with the higher ratings. He said Kaiser was working with the low-rated homes to improve their conditions.
“The care and safety of our members and patients are our top priorities,” said the spokesman, Marc Brown.
But Mr. Chicotel of the California advocacy group said the Kaiser example pointed to a broader tension within the quickly changing health care world: At what point does a desire to keep costs low trump concerns for quality?
“I think a lot of the time when it comes to managed care, it’s a race to the bottom,” he said.
Sarah Cohen contributed reporting.