New global and episode-based payment models in Medicare are under pressure to lower spending. To date, cutting the use of postacute care services such as skilled nursing facility services (SNFs) is how accountable care organizations (ACOs) and bundled payment programs have generated savings. Postacute care has been the piggy bank for these alternative payment models, but in the New England Journal of Medicine, assistant professor of health policy and management at the Harvard T.H. Chan School of Public Health Michael L. Barnett, MD, associate professor of health care policy Ateev Mehrotra, MD, MPH at Harvard Medical School, and professor of health care policy David C. Grabowski, PhD, also at HMS outline some possible unintended consequences of this development.
In some cases, patients discharged to home can fare just as well as patients referred to a skilled nursing facility. However, the study points out that “there is an enormous evidence gap regarding how much and what type of postacute care is best for which patient”, which can make it difficult to distinguish which patient does require SNF care after discharge. Incorrect discharge to home could put patients at risk of receiving inadequate care.
Discharging a patient to home also puts a strain on their families, as they are now responsible for their recovery and rehabilitation. Family members may lack the skills to provide sufficient care, and most patients have to pay out-of-pocket for professional home care services. Lower-income families may not only be unable to pay these costs but also cannot take time off from work to care for the patient.
SNFs heavily rely on the treatment of Medicare patients to make up for the financial losses of treating long-stay Medicaid patients. A large reduction in Medicare patients could put a huge financial strain on SNFs. This could result in facility closures, largely affecting long-stay Medicaid residents.
The study raises the question of what should be the target of Medicare payment reform: the alternative payment model or the postacute care providers themselves? The authors urge policymakers and health systems to be aware of the effect that changes in postacute care will have not only on spending but also on patients and their families as well.