OMRUM has presented a number of articles demonstrating conflicting policies and priorities for patients in our current system. These policies lead to chaotic and profligate behaviors by larger entities such as hospitals. One unusual set of behaviors will be discussed in the upcoming paragraphs.
An internist (a physician for adults) often sees acutely ill patients in the office (as do pediatricians and family practitioners, by the way). Some illnesses are treated at home (whenever possible, one should treat patients at home since most prefer therapy there and it is significantly less expensive). Sicker patients need hospitalization. Let’s discuss a patient with a significant pneumonia. This patient would be admitted to inpatient status at a hospital. A modern hospital is a godsend in which a patient could be given supplemental oxygen, chest physical therapy, bronchodilating inhalational agents, intravenous antibiotics, supplemental intravenous hydration if necessary and monitoring by the nursing staff.
So far, so good.
However, hospitals have unusual incentives which can conflict with the best possible medical care for patients, not to mention one’s sensibility. Let me explain this conflict.
While in the hospital for acute illness, as the patient recovers, a great deal of a patient’s time is spent resting, reading books, watching television, or staring at the ceiling. In other words, there is a great deal of “downtime”. An efficient internist would try to kill 2 birds with one stone (forgive the metaphor). For example, many female patients have difficulty scheduling their mammogram if they’re working full time. Thus, an enterprising internist would often attempt to order interval mammograms while the patient was admitted for acute issues like the pneumonia noted above. This would be a win-win since often, a certain subset of women would never get a mammogram unless it was easy to do so. However, hospitals have no such incentives.
When a patient, especially a Medicare patient, is admitted for an acute care issue, the whole payment for hospital services is governed by a fixed sum dictated by the diagnostic related group (DRG) program. Stated another way, all patients who were admitted for a bronchitis or pneumonia (hence, a related group) would generate a fixed reimbursement to the hospital, e.g. $5000 (this figure is for convenience only). If the hospital were efficient and could complete the necessary inpatient services for $4000 (on average), the hospital would make a net of $1000 for each such admission. If the hospital were extremely inefficient and spent $10,000 (on average) treating patients with bronchitis or pneumonia, the hospital would bleed $5000 for these same admissions. The DRG replaced a fee-for-service and per diem model, which gave the hospital no incentive to behave efficiently (indeed, hospital costs were increasing well above inflation). So the DRG program was an amazing success at controlling inpatient costs. However, here’s the rub. The program quashed the ability to do highly effective preventative services which normally would be done on an outpatient basis. This was because, in a bizarre policy decision, any patient under DRG for an inpatient admission was not allowed to undergo any outpatient testing at the same time (!) Medicare does not reimburse a bill for a mammogram or other necessary outpatient services even while the patient is within the confines of the hospital. How this policy was arrived at is beyond this author’s knowledge.
The above will be restated. Even if the above patient were due for a mammogram while a convalescing inpatient, the hospital would not allow such a study to be performed (since it would not be reimbursed). A certain number of patients would not return for a mammogram and, sadly, a certain number of them (11% of all women over lifetime) would develop breast cancer. This is an egregiously missed opportunity. If Medicare were designed to keep its population well and be cost-effective, it would pay for concurrent services (in this case, both inpatient treatment for pneumonia and an “outpatient” screening mammogram). By allowing a subset of women to progress from very early detectable disease to symptomatic breast cancer, the best possible screening for these patients is missed and the cost of treatment goes up a few decimal points.
The above is not the only opportunity missed while hospitalized. Vaccines unrelated to the current hospitalization (e.g., the vaccine to prevent shingles) would not be permitted. Interval screening of osteoporotic patients under treatment by a DXA scan (which quantifies changes in bone density) while hospitalized is not permitted. Patients who are due for interval echocardiogram (ultrasonic imaging of the heart) who have valvular disease will be sent home without this easy procedure if it’s not related to the hospitalization.
However, the obtuse policymaking related to inpatient care by no means ends with the above.
Medicare has a very bizarre, decades-old policy regarding inpatient stays, the infamous “3 day rule” policy. To explain this properly, one must understand that discharges from the hospital may require different levels of care. Using the pneumonia example, many can transition back to home with outpatient follow-up. However, patients who are older, have concurrent morbidities, had limited social support, are frail, or otherwise cannot be discharged to home safely are candidates to transition to an intermediate facility, i.e. a skilled nursing facility (SNF). These facilities have registered nurses on staff, often can supply supplemental oxygen as necessary, often can continue intravenous antibiotics if necessary (if oral is not appropriate), and other resources. These services are not quite at the level of the hospital but certainly better than typically at home. They are a critical part of the medical system.
It is Medicare’s policy to pay for intermediate care at the SNF only after the patient stays in the hospital as an inpatient for >= 3 days. This is, as said above, bizarre. Although many patients may need 3 days or more in the hospital for proper treatment, many do not. Some patients might be admitted on a Tuesday morning and be candidates for discharge Wednesday afternoon. With so many advances in medical treatment over the last few decades, many patients may be candidates for transition to home or a SNF in shorter periods of time than historical trends. Please note that this does not necessarily mean the illness leading to admission is completely addressed but rather it no longer requires inpatient level of services.
The “3 day rule” costs hospitals a great deal of money (which, of course, means it costs all citizens a great deal of money). It also has an “upstream” effect. Over the past few years, patients seen in the emergency room (ER) and admitted into the hospital often have to wait many hours (if not days) for a bed to become available in the inpatient section. These patients are called boarders. ER’s are not designed for boarders. They have enough difficulty handling their primary mission. If the ratio between ER beds and inpatient beds are not well matched, chaos at multiple levels ensues. Many of this author’s patients have had to board for extended periods of time in the ER which leads to very grumpy patients.
Once more, the question is-what to do, what to do?
The answer to the question is discussed in OMRUM’s November 1, 2024 article regarding Global Capitation. A hospital, under global capitation, agrees to care for a large population of patients for a fixed amount per patient per month. This includes all services which a hospital can render.
Under global capitation, there is no need for a “3 day rule” and patients who are reasonable candidates for discharge before 3 days may be either discharged to home (more ideally) or to a SNF as circumstances dictate. Emergency rooms will be less of a “chokepoint” in which boarders linger for lack of available inpatient beds. Bed turnover will improve. Please note that hospitals have no incentive to send a patient out prematurely since that will lead to an expensive readmission.
If a patient were due for routine screening mammogram while hospitalized, the hospital would have no objection, especially if it were the site of the patient’s usual imagings. If the hospital denied this imaging, a significant number of women would return with palpable or otherwise symptomatic breast masses down the pike which would be much more costly at that stage for the hospital to address.
If the patient were due for routine vaccines such as the flu, shingles, or Pneumovax vaccines, it would be in the hospital’s best interest to allow these since these vaccines would reduce subsequent emergency room visits and admissions.
Just as the policy of paying hospitals a fixed sum for an admission (i.e., DRGs) led to an immense improvement in treatment efficiencies (and better outcomes), so would global capitation payments to hospitals lead to broader efficiencies. Under this paradigm, hospitals would not deny outpatient services while a patient is hospitalized since it would cost them more money in the long run. Once again, there would be in alignment of patients’ needs with financial incentives for (in this case) hospitals. That alignment is critical.
Under global capitation, better patient care will fully align with hospital incentives. OMRUM endorses this.