Big Changes Ahead in Long-Term Care: Impact on Hospitals

By Rose O. Sherman, EdD, RN, FAAN

I am part of a research team that recently received a grant from the Florida Blue Cross/Blue Shield foundation to study the challenges, opportunities and development needs of long-term care nurse leaders in the State of Florida. This is a new area of work for me and I am quickly learning that long-term care as we have historically known it is rapidly changing. I recently had the opportunity to sit down and talk with a Vice President of Nursing for one of our State’s top rated long-term care organizations. She took me on a tour through her facility’s brand new state of the art skilled care units and rehab center. “This world of long-term care is changing”, she explained and “the future will not be in long-term care custodial beds but in short-term care and community support. Many current med-surgical patients may be admitted to directly to this setting. We are even considering putting in telemetry capability. My skill mix is shifting to more RNs and fewer LPNs. It is health reform and consumer preferences that are driving the change.”

What is Long-Term Care?

Almost 40 years ago as a young college student, I worked in a nursing home. Many of the residents had lived there for years and the care was custodial at best. There were no skilled beds in the facility where I worked. Today’s long-term care environment is completely different and encompasses so much more than the traditional nursing home. It refers to the spectrum of health, social and personal-care services provided to the disabled or chronically ill of any age …. both in facility based settings (skilled care, nursing home care, inpatient hospice, group homes and assisted-living) or in community based settings (retirement communities, outpatient hospice, home-health care and adult day care). Over the past decade, the services in traditional skilled nursing and assisted living facilities have increasingly become more medically complex and specialized.

Demographics are Driving Changes

Much of the change that we are seeing in long-term care is being driven by the Baby Boomers. Born between 1946 and 1964, 3 million members of this generational cohort will turn 65 each year for the next twenty years. By 2029, the number of Americans over the age of 65 is expected to increase by 73%. In the State of Florida, 25% of our population will be over 65 by 2020. Based on current data, health policy experts predict that 69% of those over the age of 65 will need some form of long-term care. Long-term care leaders are seeing a shift in what the consumer wants. While Baby Boomers may have placed their parents in long-term care custodial nursing homes, it is not the future that they want for themselves nor will they be able to pay for these settings even if needed.

Policy Decisions are also Driving Change

Skilled nursing care is typically paid for by Medicare Part A (largest payer) or private insurance resources. In contrast, non-skilled longer term care is usually paid by Medicaid or private resources. With rapidly increasing costs and an aging population, it is not surprising that the federal and state governments are looking to reduce costs.

Medicare will generally only cover skilled nursing costs if it follows a three day inpatient stay in the hospital. Patients who are part of Medicare managed care plans are not subject to this restriction. It has been demonstrated that skilled nursing facility care provides a cost-effective transition and many patients directly admitted to these facilities are able to return home in relatively good health and avoid a trip to the hospital. Nursing homes are also often equipped to treat many common conditions that are typically treated in the acute care hospital, such as uncomplicated pneumonia or fractures that do not require surgery.

Eliminating the three day rule for all Medicare patients is under debate in policy arenas. If it does happen, there is a potential for a significant decrease in inpatient days for hospitals that have a high Medicare case mix. Many states such as Florida are moving Nursing Home Medicaid patients into managed care plans with the overall goal of transitioning a significant percentage of these patients back into the community with intense case management. 65% of current nursing homes in the country are small for-profit and privately owned operations. Their future is very uncertain with changes in payment structures.

It is likely that with the movement to Accountable Care Organizations – long-term care will move into the continuum of care provided by these organizations. When that happens, decisions about where care can best be provided insuring quality but at the lowest cost will be challenging. We may see a significant amount of care now provided in acute care settings moved into skilled care settings. These are trends that will be important to watch.

Read to Lead

Gay, B. (September 13th, 2013). Medicare 3-Day Stay Issue Brief. LeadingAge Website.

Pobee, K. (2013). Cut through the noise: Nursing home care in the Baby Boomer Era. Charleston, SC: Advantage Publishers.