The diagnosis is clear: our healthcare system is not only exorbitantly expensive but failing to deliver on its promises to Americans.

A study released last year by the Commonwealth Fund – a foundation promoting high-performing health care options – highlights the grim reality. The United States may spend nearly 50% more on healthcare than the next-most costly system among the 11 national models evaluated (as measured by the percentage of GDP allocated to healthcare), but outcomes are far worse.

A disproportionate share of this spending pays for a relatively small percentage of the population who are frequently admitted, discharged and then readmitted to hospitals for the same chronic conditions. For these patients, many of them elderly and frail, the system isn’t working. They are discharged from the hospital before they are fully recovered, either to their homes (with visiting home health aides), or to skilled nursing facilities. But these transitions interrupt care and introduce new risks, leading to a high readmission rate.

The solution? Integrating the different levels of care and delivering it in the home rather than a hospital. A single team should be able to manage all of a patient’s needs, from the most acute phase of their illness through the final stages of rehabilitation to recovery.

Successfully integrating acute and restorative care moves us toward the national policy goal of reducing overall utilization of healthcare resources. Most cost-control efforts focus on reducing utilization of individual stages of care – inpatient hospitalization, skilled nursing facility (SNF), home health care. An integrated approach that delivers much of the care in the patient’s home delivers better outcomes and helps break the costly hospital readmissions spiral.

Artificial Line Between Acute and Restorative Care

“You’re sick until you’re not sick anymore,” says Raphael Rakowski, co-founder and executive chairman of Medically Home, who explains that the line between “acute” and “restorative” care – with different provider and payment models for each – is artificial, creating a costly and complex system.

That’s the reason Medically Home’s hospital-at-home (HaH) model – conceived before the Covid-19 pandemic and the public health emergency it triggered – envisaged the ideal HaH as being one that offered a care process free from transitions. A best-in-class system is designed so that the duration of treatment (and payment for that treatment) is aligned with the healing journey of each patient to reach what’s referred to as a “stable clinical and functional endpoint.” It’s a game-changer, because the emphasis isn’t on a specific duration or diagnosis as traditional billing and treatment models dictate. Instead, it offers a longitudinal approach, providing whatever kind of care a patient requires in the best possible setting without attaching a designated duration or phase.

The Cycles: Hospital-to-SNF-to-Hospital, or Hospital-to-Home-to-Hospital

Currently an elderly patient experiencing difficulty breathing is likely to end up as a hospital inpatient. That’s far from ideal.

“When you’re a geriatrician, you see all the complications that happen” treating chronically-ill patients whose diabetes or heart failure causes them to call 911, says Dr. Linda DeCherrie, Medically Home’s vice president of clinical strategy and implementation. If a patient like this calls 911, “it’s very rare that they will not be transported to the hospital. If they get to the hospital, they will be admitted. Once the wheel starts rolling, it’s very hard to interrupt that.”

Too often, that rolling wheel loops the patient right back into the hospital. Nearly a quarter of patients transferred from hospitals to SNFs or other rehabilitation facilities are readmitted to the hospital within 30 days.

Patients are at further risk when transferring from the SNF to home. Among more than 67,000 heart failure hospital inpatients in one study who followed this course, 24.2% were readmitted to the hospital within 30 days of SNF discharge, according to a study published by the Journal of the American Medical Directors Association.

Patients discharged from the hospital directly to their homes are at even higher risk of readmission than comparably ill patients discharged to a SNF. An analysis in JAMA Internal Medicine of 17 million hospitalizations covered by Medicare found that patients discharged to home with home health care services had a 5.6 percentage point higher rate of readmission than patients discharged to SNFs.

The readmissions problem hurts millions of Americans and adds tens of billions of dollars to annual healthcare costs. In 2018, 14% of adults discharged after a hospital inpatient stay were readmitted within 30 days. That is, 3.8 million readmissions, at an average cost of $15,200, according to the Agency for Healthcare Research and Quality.

 The most common preventable causes of such readmissions are medical errors (such as improper dosages or delays in administering medications), infections that aren’t treated promptly, and poor nutrition (which in turn contributes to weakness and increases the risk of a fall).

Consequences of Losing Continuity of Care

The consequences of these handoffs have been the focus of considerable anxiety and study. “Information quality and flow between hospitals and SNFs at the point of hospital discharge are notoriously poor and delayed,” noted an analysis in JAMA Network in 2021. Nursing facilities lack the skilled professional staff and other resources to bridge what the authors described as a “communication chasm.”

Problems – medication mistakes, infections – aren’t detected until they require major interventions. Then, Dr. DeCherrie notes, “patients lose their strength, they fall; then it’s back to the hospital.” The same pattern can follow if a patient is sent home from hospital without ongoing care during the “restorative” phase of their treatment, as individuals charged with monitoring their own care plans can also make errors. The Commonwealth Fund’s analysts note this ubiquitous communication problem creates not only poor outcomes but also higher costs.

How can our legacy system adopt a better approach?

Care for the Duration of Illness and Recovery

HaH that provides integrated acute and restorative care gets chronically or acutely unwell patients off the merry-go-round.

Today, the HaH model that is likely to be most familiar to many is the one that exploded into the spotlight as a way to address hospital capacity crunches during the pandemic. The Centers for Medicare and Medicaid Services waiver, introduced in November 2020, allowed CMS-approved facilities to provide inpatient-level care to acutely ill patients in their own homes. This is a significant step in the right direction, but it’s only a step. The CMS program covers care only for the acute phase of an individual’s illness, and not the rehabilitative period that follows.

While now there is an opportunity to go even further, Dr. Phil Capp, head of payer relations at Medically Home, notes the acute-care waiver program “has been an ‘easy button’ of sorts that I think has slowed the appetite of the healthcare systems for the more difficult process of contracting” for integrated acute and restorative care. This does, however, lay the groundwork for next-generation offerings. Some commercial insurers already are covering bundled acute plus restorative care, demonstrating the model’s viability.

Integrated acute and restorative care models such as Medically Home’s are proving effective in reducing readmissions. Across Medically Home programs fewer than 1% of patients need additional facility-based care after their integrated home hospital stay.

“As decentralized care gains more momentum, this concept has been more broadly adopted,” says Rami Karjian, co-founder and CEO of Medically Home.

The duration of integrated acute plus restorative care isn’t fixed, but rather varies by what the patient needs. Discussions of integrated care models sometimes use “30-day” as shorthand, but 30 days is actually a reflection of how care is often studied or paid for. (For example, readmission rates are measured on a 30-day basis.) The average length of stay for patients under Medically Home’s model, which varies according to each patient’s clinical needs, hovers around 22 days, says Dr. Pippa Shulman, Medically Home’s chief medical officer.

Better Patient Outcomes Equal Improved Economics

As providers shift in the direction of this comprehensive model of care, cost savings will grow. The cost savings when turning to HaH for the acute phase of a patient’s illness are “only modest,” the consulting firm Sg2 advised its hospital and health systems clients last year. It said “the savings significantly increase once post-acute care is factored in,” thanks principally to lower readmission rates. Dr. Capp’s own findings show that the economics of providing HaH only to acutely ill patients aren’t as compelling as those covering the cost of both the acute and restorative phases.

More clinician time over a longer period delivers improved outcomes, reducing the need for repeated rounds of costly hospitalization and rehabilitation. “HaH care bundled with a 30-day post-acute transitional care episode compared with traditional inpatient care was associated with shorter LOS [length of stay]; lower rates of readmission, ED [emergency department] visits and SNF [skilled nursing facility] admissions; and better ratings of care,” concludes a study to which Dr. DeCherrie contributed before joining Medically Home, published in JAMA Internal Medicine in 2018. For example, readmission rates fell from 15.6% for traditional inpatients to 8.6% for HaH patients, while ED visits fell from 11.7% to 5.8%, and SNF admissions fell from 10.4% to 1.7% (see accompanying illustration).

The way to achieve cost savings is to improve patient wellbeing. Eliminate the isolation and disorientation associated with hospital stays, and we have removed a major obstacle to recovery. Surrounded by family, friends and pets in their own homes, patients fare better. And the virtual hospital team following the patient in their home through acute illness and onward to clinical and functional recovery can respond rapidly to shifts and changing needs, even when this requires increasing intensity of care.

“Patients are able to try out their daily activities with support from their virtual care team,” Dr. Shulman says. “Together, they figure out how to keep the patients safe, healthy and out of the hospital.”

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