Ritz Carlton vs. Hospital: Which Setting is Cheaper for “Permanent” Patients?

A recent NBC News investigation looked into the costly world of “permanent” hospital patients: when hospitals are forced to keep patients for months—even years—because the patients have nowhere else to go. All of this happens at enormous costs to hospitals, costs that usually can’t be recouped because the patients have no way of paying for their care.

In many cases, the patient could be adequately cared for in a skilled nursing facility setting, rather than in an acute-care (and extremely expensive) hospital setting, found the investigation, covered in an MSNBC Rock Center article.

But because of current healthcare policies and guidelines, “under federal law, hospitals must treat any patient who needs emergency medical attention even if they have no way to pay. Nursing and rehab facilities are not required by law to do so.”


And with hospitals unable to discharge patients unless they have a plan for post-acute care, many facilities get “stuck” with these permanent patients who have “large medical bills and no way to pay.”

“It would be cheaper to take these patients and send them to the Ritz Carlton,” said Harvard University School of Public Health Professor Ashish Jha in the MSNBC article. “They could get room service all day, and that would be cheaper.”

Tens of thousands of these patients are stuck in hospitals with nowhere to go for long-term care or rehabilitative services, Jha estimates, and the NBC News investigation found officials at “dozens” of hospitals across the country confirming they had long-term patients who didn’t need to be in an acute-care setting.


If so many of these people could be cared for in a skilled nursing setting, is it worthwhile for hospitals to introduce some sort of skilled nursing division into their facility? As of 2010, just 6% of skilled nursing facilities were hospital-based (as opposed to being freestanding), according to the Medicare Payment Advisory Committee’s 2012 report to Congress.

But while it might be cost-effective for these particular patients to be in a less-acute setting, these sorts of incidents don’t occur to the point where it’s logical for hospitals to add SNF beds, according to Greg Crist, vice president of public affairs at the American Health Care Association, a nursing home industry trade group.

“It’s more the exception than the rule,” he found after getting input from a few providers. “Hospitals can’t necessarily do any sort of economic forecasting to the point where it would be viable.”

While some hospitals have looked into adding a skilled nursing center, Crist says the high number of regulations surrounding the industry have prompted many to just stay in the acute care sector.

Back in January, The New York Times ran a similar piece about illegal immigrants lingering in hospitals at a high cost because they had nowhere to go.

Read the full MSNBC Rock Center article, which talks about a more than 2 year, $1.4 million stay in an hospital by an undocumented immigrant who, according to the hospital’s chief medical officer, belonged in a skilled nursing facility but couldn’t go because she had no way of paying.

Written by Alyssa Gerace