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Are Medicare Cost Containment Strategies Working?

Trends in hospital inpatient stays (2005-2014) show they are.

  • hospital stayBetween 2005 and 2014, the inflation-adjusted mean cost per inpatient stay increased by 12.7 percent, from $9,500 to $10,900.
  • Inflation-adjusted cost per stay for patients covered by private insurance or Medicaid increased 16-18 percent. Cost per stay for Medicare-covered patients and the uninsured changed minimally.
  • The rate of inpatient stays decreased the most among patients in the highest income quartiles (15-20 percent decrease).
  • The proportion of Medicaid-covered inpatient stays increased by 15.7 percent, whereas the proportion paid by private insurance and that were uninsured decreased by 12.5 and 13.0 percent, respectively.
  • Mental health/substance use accounted for nearly 6 percent of all inpatient stays in 2014, up 20.1 percent from 2005.
  • Between 2005 and 2014, septicemia and osteoarthritis became two of the five most common reasons for inpatient stays. Septicemia hospital stays almost tripled.
  • Nonspecific chest pain and coronary atherosclerosis decreased by more than 60 percent from 2005 to 2014, falling off the list of top 10 reasons for hospitalization.

Source: Healthcare Cost and Utilization Project

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Where You Were Born Increases Chances of Cardiac Death and Dementia

Birthplace linked to higher cardiac mortality & dementia risk.

Heart-AttackThose born in high stroke-mortality states (the so-called stroke belt) in the South: Alabama, Arkansas, Louisiana, Mississippi, Oklahoma, Tennessee, South Carolina and West Virginia, are much more likely to develop dementia, according to a recently published article by JAMA Neurology.

The risk of developing dementia in the next 20 years was 30 percent more for people born in these states (plus Alaska), compared to 21 percent for those born elsewhere. This study also links cardiovascular disease to dementia.

African Americans in the analysis were almost 10 times more likely to have been born in one of the stroke belt states, and had the highest dementia risk of all. African American adults from the nine states with high stroke mortality rates were 67 percent more likely to develop dementia than non-African American people born outside of the stroke belt. African Americans born outside the stroke belt were 48 percent more likely to develop dementia than all others born outside the stroke belt.

Non-African American adults born in the states with high stroke mortality rates were 46 percent more likely to develop dementia than non-black people born elsewhere, the study also found.

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“Against Medical Advice” Discharges Flummox Doctors, Patients And Families

Patients, Families & Healthcare Professional At Odds

“AMA discharges” — patients who leave the ER or hospital “against medical advice” —  have long been a source of consternation in the hospital, the ER and with families who’s loved one is not able to adhere to the hospital regimen.  Some patients and families feel coerced into staying, making doctors and nurses feel like jailers rather than caregivers.

Contrary to what some doctors and nurses tell families, insurance will pay for the services, even if the patient walks out without completing the recommended treatment.

Learn more about this topic.


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Nursing Home Quality vs. Lower Healthcare Costs

Quality And Cost Concerns Collide With Efforts To Lower Overall Healthcare Costs

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Burden Will Fall On Families With Elderly Parents

The efforts to contain the health cost curve is really about controlling the cost of post-acute care.  Half of post-acute Medicare dollars go to Skilled Nursing Facilities (SNFs), and half of all Medicaid spending goes toward paying for nursing home care as well. These payments continue even as there are continuing lapses in quality of care despite coordinated Federal efforts.

Many poor performing nursing facilities are willing or able to correct problems they’ve been cited for.  Nursing shortages are having a widespread impact on quality of care.  Promises are being broken and regulatory systems seem unable to fix the problem.

But will less money, as proposed in the on-again-off-again American Health Care Act just exacerbate an already stressed system?

Learn more about this topic:


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How To Choose the Right Care at the Right Price

Understanding each type of service will save headaches and money.

Right-Care-Right-Price There are several kinds of agencies and facilities to consider when choosing the best options for a loved one.  It’s helpful to understand what style of care works best for families at different stages of the caregiving journey.  

This excerpt from my FREE REPORT explains the various services, facility types and payment options. 

  • Companion Agencies provide unskilled workers for duties like light housekeeping, grocery shopping, and transportation for the elderly individual. Companions do not give hands-on care. Typically, the agency will charge $16-20/hour.
  • Personal Care Agencies provide Certified Home Health Aides (CHHAs), but also some Companions. CHHAs should be certified by the state, bonded, and have criminal background checks. These aides are qualified to perform any hands-on care that involves such activities as bathing, washing, assisting with dressing and stair climbing. They cannot provide wound care, medication or any treatments. The care agencies charge $4-5 more than Companions per hour for this level of care.
  • Licensed Nursing Services have Licensed Professional Registered Nurses (RNs) and Licensed Practical Nurses (LPNs). These nurses can dispense medications, perform wound dressings and treatments, and can complete physical assessments. These licensed agencies also have CHHAs who work under the supervision of licensed nurses. Licensed agencies may be covered under commercial health insurance, workman’s compensation, auto injury protection, or paid for by Medicaid.
  • Medicare Certified Agencies are certified to care for Medicare patients, but usually only after a hospital discharge. Based on an assessment and the doctor’s instructions, Medicare pays the agency a set fee for all the care needs the patient requires. Such an agency may provide a CHHA, the services of a social worker, a physical therapist, an occupational therapist and/or a speech therapist. Social workers and other specialty therapy providers may also be consulted.
  • Nursing Registries function as employment agencies. The patient’s family hires the caretaker directly and pays the agency an additional fee per hour. Generally these agencies only use companions or home health aides, but in some cases may offer skilled nursing. The family must be cautious because they are responsible for any injury that may occur while the nurses are providing a service and any theft or losses that may occur. The registry does not take responsibility for those occurrences. The family must also take into account their own liability for employment taxes.
  • Private Hire Many people seek to save money by hiring a companion or nurse privately but assume the risk of theft or losses when the private hire is unsupervised and without a background check.
  • Adult Day Care services are usually offered between the hours of 8 AM and 4 PM, for about $80/day plus transportation. This service may be covered by Medicaid or by the county, if the person qualifies financially. Adult Day Care provides a light breakfast, a meal at lunch, and dispenses medication. There are activities for residents, transportation for doctor’s visits during the day, and the supervision of a Registered Nurse while at the facility. A family can choose to have the member attend as often as desirable. These services are useful when loved ones are not safe alone at home but the family returns in the evening to care for them. Such situations give family some respite and assist in the loved one’s socialization.
  • Program for All Inclusive Care for the Elderly (PACE) is designed to keep chronically ill individuals living at home in their communities. This program may be covered by Medicare and/or Medicaid, or a sliding scale payment if the loved one’s income and assets are too high to qualify for entitlements. PACE programs provide primary physician care, adult day care, social work services, physical and occupational therapy services and in-home care when appropriate.
  • Independent Living Communities are apartments that may be sponsored by a town or a non-profit organization to pay the rent for low-income individuals. Such communities provide apartments with activities that would be of interest to seniors. These communities often contract with Home Healthcare Agencies to provide services as needed for their residents and to be paid for by the resident.
  • Free Standing Assisted Living Communities are appropriate for people that require minimum to moderate assistance for one or more activities of daily living. The price includes room and board, access to the services of a visiting primary care provider, social activities, housekeeping and laundry, while the resident maintains his own apartment with his own furniture. Such care is paid for privately; it is not covered under Medicare and rarely is covered by Medicaid.
  • Continuing Care Retirement Community (CCRC) These organizations have independent living, assisted living, and skilled nursing care all on the same campus. They generally require a large deposit to join the community and become a permanent resident. Generally the CCRC prefers that the resident join prior to requiring an intense level of care. Such care is paid for privately, but the community may accept Medicaid if the resident outlives his funds.
  • Skilled Nursing Facilities (Nursing Home Care) provide care for patients that require moderate, maximal, or total assistance with two or more activities of daily living. The better facilities generally expect two years of privately paid funds, and most will accept Medicaid once the private pay assets are exhausted.
  • Sub-Acute Care is paid for by Medicare after a qualified three-day hospital stay. While Medicaid may pay for up to one hundred days in a Skilled Nursing Facility, most patients stay two to three weeks. To qualify, the person needs to engage in one to three hours of rehabilitation per day, and will need to continue to show progress in order to qualify for continued stay.
  • Acute Rehabilitation Hospitals specialize in rehabilitation of complex conditions or injuries after an acute hospital stay. A patient’s stay must be pre-approved by the insurance carrier, and the patient needs to be engaged in three to five hours of rehabilitation a day.
  • Long Term Acute Care (LTAC) are specialty hospitals for patients that do not require the services of an Acute Care Hospital in terms of diagnostic or surgical procedures, but do need skilled nurses for complex wound care, ventilator care, and rehabilitation beyond which can be provided in a Sub-Acute setting. This care is generally covered under Medicare and commercial insurance on a pre-approval basis.
  • Hospitals are differentiated between community hospitals and tertiary care centers. Community hospitals care for patients with routine and predictable conditions and are not involved in complex surgical or diagnostic procedures. University affiliated and specialty hospitals that receive many patients from other hospitals specialize in complex care such as oncology, orthopedics and neurosurgery.

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