Reg's Blog

Senior and Post-Acute Healthcare News and Topics

Coronavirus: Perspective Required

Yesterday I began advising healthcare organizations to pull-out their disaster preparedness plans (required by federal code) and their pandemic policies, reviewing the same, etc. for an almost certain, foretold Coronavirus outbreak.  I was not alone in my advice as my email filled with updates across various trade publications issuing similar advisories.  As a colleague of mine was apt to say: “prior proper preparation prevents poor performance”. Wise words.

When I got home last night and turned-on the television, the programming had barely moved from the early morning cycle.  It was Coronavirus all the time.  The news media was cyclical, channel to channel covering the same subject matter with the same experts and pundits in the same locations.  And, to make the whole news mantra even more sickly, the stories included snarky political spin (from both sides).  It is after all, an election year and nothing feeds politics like a good ole’ crisis.  Think Bush’s hurricane Katrina or Carter’s OPEC embargo and gas prices/waiting lines (wow, am I dating myself).

As I was watching the news and flipping from outlet to outlet, I was struck by the apocalyptic tone.  I have been on the planet for six decades and for all six, facing imminent demise (along with the rest of humanity).  There has never been a period in my lifetime where doom wasn’t omnipresent.  Consider the following from my history (some of you may share parts or all of this journey).

  • As a kid, I was taught to “duck and cover” in school.  We were warned and trained to be vigilant about pending nuclear war.  I doubt that ducking under our desks would have saved me and my classmates.
  • In the early 80s, AIDS arrived and boy was it scary.  We were afraid of blood, gay people, and suspect drug abusers.  Catch it and death was certain.  Isn’t Magic Johnson still alive?
  • Finally, in the early 80s, we no longer had to worry about nuclear apocalypse or all-out war at our front-door.  While the threat does remain, the doomsday clock is also impacted today by climate change – not so in the early 90s.
  • Plagues and disease of one form or another has always threatened my and my fellow men and women’s existence. Aside from the various influenzas seasonal throughout my life, we encountered swine flu and bird flu, both lethal.  There’s been SARS, AIDS, Zika, Ebola, and the list goes on (world-wide pandemics according to WHO – Worldwide Health Organization).
  • Today, some oldies are returning, once eliminated or nearly eliminated.  The measles and small pox have returned.  Both primarily due to a cultural shift in public health focus and vaccination priority.

To the point: I’m still here and so are most of my family and friends.  Now, I’m in no way trying to minimize the importance of containing and understanding the health risks of Coronavirus.  I am saying that the 24 hour, in my (and your) face news cycles, and the need to trump (not that one) each story with a bigger “get” has us perhaps, unnecessarily on-edge. There is a great song by Don Henley that spells it best: “Dirty Laundry”.

As readers and fans of this site know, I am a health care guy and an economist.  For the past thirty-five years, I have been in and around health care and health policy as an executive and a consultant.  The economist in me favors numbers and analysis.  Thus, I have sought to put Coronavirus and where it is today, into a global perspective.  Yes, it is serious but so are lots of things, many presenting more direct risk of death.  Consider the following.

  • Coronavirus has infected 83,000 people world-wide and killed 2,800 as of today.  That is a mortality rate of 3.37%.  The majority of deaths are in China and other countries lacking in first-rate healthcare access.
    • Worldwide influenza deaths approach 500,000 annually (source: WHO)
    •  1.25 million people die in automobile deaths across the world, annually.  That’s 3,287 deaths per day! (source: US Dept. of Transportation)
    •  36,000 die in automobile crashes in the U.S.  If we include folks hit and killed by cars as pedestrians, the number exceeds 40,000.  Daily, auto related deaths in the U.S. amount to an average of 115.  This equates to a fatality rate per 100,000 US citizens of 11.18 and per 100,000,000 of 1.13. Yikes! (source: US Dept. of Transportation)
    • US hospital acquired infections account for 99,000 deaths per year from 1.7 million infections!.  This a mortality rate of 5.8%.  I’d almost rather take my chances with Coronavirus than being admitted to a US hospital! (source: Centers for Disease Control)

I could go on with the list but I think readers will get the point.  As we continue to listen to the news, boil our panic “stew”, seek surgical masks that are ineffective, and begin to self-diagnose our seasonal respiratory colds as something far worse (unlikely), consider the risks associated with getting a hospital acquired infection (sorry to all of my hospital colleagues).  Worse yet, consider the risks of driving to the hospital and then being hospitalized.

My point in this post is simple.  Take a deep breath or five.  Humanity  has been on the brink of the apocalypse before and will always remain there.  We ignore real risks like driving as “ordinary and safe” when not really but fret and panic about a respiratory virus that isn’t as potentially lethal as driving a car. Too many of us believe still that the annual flu vaccine if we take it, will make us sick yet the annual influenza variant is far more lethal than Coronavirus (based on mortality rates).  At least most influenzas have a vaccine.  Also with a vaccine sits the measles, increasing again worldwide.  Its lethality is known but due to an uptick in junk science, people are shying away from vaccines and thus, causing a re-birth of a possible pandemic.  Again, we teeter back to the apocalypse.

An old and treasured Irish proverb states: “Tomorrow is promised to no one”.  For an incredibly long list of reasons, I believe this to be true.  Top among the reasons list isn’t Coronavirus.

February 28, 2020 Posted by | Policy and Politics - Federal, Policy and Politics - Wisconsin | , , , , , , , , , | 4 Comments

PDPM: First Blush Analysis

One quarter (three months and change) down and PDPM appears to be mostly positive for SNFs.  CMS is reporting a higher average per diem payment level than under RUGs.  Despite some added coding complexity, paperwork burdens are down for providers (two MDS’ during most stays now vs. many under RUGs).  Anecdotally, the industry is seeing added access for certain patient types that previously, were difficult SNF placements.  The NTA category is the driver of this additional access as payments help offset, higher clinical costs associated with certain patient needs and comorbidities.  Approximately 2/3rds of facilities have experienced rate increases (67%); 23% experiencing decreases.  Where rate erosion has occurred is in facilities that were heavily skewed under RUGs to RU and RH level therapy payments – 75% or more utilization.  Conversely and logically, the winners have been facilities with a much more balanced book of business; a normative or typical RUG distribution (historically) and a patient/referral base that included more clinical complexity.  Studies that initially showed a 90% plus increase in Medicare per diem rates in October erroneously ignored the initial conversion bounce (NTA pick-up) that came into play for residents in a facility under RUGs on 9/30 that carried-over into PDPM on 10/1.  Suffice to say, the playing field has leveled.

Originally, CMS estimated that PDPM would be budget-neutral with a modest or slight bias toward rates being flat or down just a touch at the facility level.  The projection from CMS using 2017 data was for a 1.37% decrease.  November’s data/results ran 5.7% above the CMS projection.  While CMS has provided no immediate reaction to the “better than expected” trend for providers, the reality is that an adjustment of some form is likely.  MedPac has called for no rate increases for SNFs in FY21.  It is possible that a flat-rate scenario will emerge for at least a few years IF, rate pullbacks aren’t part of the immediate solution.

While fee-for-service rates under PDPM offer encouragement for providers, the overall occupancy trend and payer-mix is a sobering element.  Since 2010, overall fee-for-service utilization is down by 17.7%.  Length of stay for the same period also declined by 7.4% (covered days).

Three factors are heavily influencing the fee-for-service utilization and length of stay trends.  First, Medicare Advantage is a growing payer type (covered lives).  MA plans simply account for shorter stays at reduced rates where SNF care is required.  Second, home health agencies have filled the bill for certain care needs, circumventing altogether, an SNF stay.  It is not uncommon for a routine knee-replacement patient with stable comorbidities to transition home with a home health agency vs. to an SNF or IRF (inpatient rehab facility).   Pneumonias, infections, wounds, etc. can be managed at home; preferable for the patient and often, for the payer.  Third, ACOs and Bundled Payment programs (and MA plans too) work to steer patients to home or outpatient settings either avoiding the SNF entirely or shortening the inpatient stay by a day or series of days.

While the PDPM rate bump may seem good news, and it is, the euphoric feeling is temporary.  Increased revenue is a function of not just rate but utilization.  If utilization continues to remain on a downward path, the dip won’t be offset by rate.  Similarly, utilization patterns are shifting and as of today, I see no progression or shift toward increased SNF utilization.  Frankly, there remains in most markets, too many SNF beds for the functional demand (certainly, for the demand with a good payer source).  Assisted Living models, those adapted to a higher-level chronic care model, continue to erode long-term SNF census.  This erosion causes a two-part dilemma for SNFs. First, fewer patients/residents to occupy beds and second, the remaining patients tend to have Medicaid as a payer source.  For SNFs that can’t play and survive to a large extent in the post-acute realm, alternative options are scarce for long-term resident occupancy (I-SNPs perhaps?).

One last caveat for providers at this juncture, is worth noting.  PDPM rates are up and CMS has yet to begin audits.  I suspect facilities will see some “shock and awe” once these audits begin.  Remember, audits are done by intermediaries and contractors – not by CMS directly.  I have seen some claim funk as facilities have strutted their way to some higher payments by additional speech utilization – utilization that wasn’t there under RUGs.  I’m watching facilities aggressively pursue cognition via Speech Therapy engagement; seeking to score residents at certain times of the day where cognition may be lower (later day, after a nap, etc.).  A note of warning here is warranted.  Coding opportunities are available under PDPM and IF, such an opportunity correlates to a higher payment, that’s great PROVIDED that, the care delivered and documented, supports the coding.  I am already seeing residents coded at one level of cognition, Speech being used for “cognitive training” and nursing documentation stating that the resident is, “alert and oriented x 3”.  Which is it as it can’t be both?  The proper approach is to evaluate the overall needs of the resident and develop a careplan with the whole team that reflects this holistic assessment.  The key then going forward, is for all disciplines to appropriately document the care provided, consistent with the careplan.






February 10, 2020 Posted by | Skilled Nursing | , , , , , , , , , , , | 2 Comments