NYTimes: Boom in Post-Acute Care Creates Fatal Risks for SNFs

Investors are scooping up senior care facilities that are raking in Medicare dollars for post-acute care, but the rush to make money on these services might be putting patients’ health—and even lives—at risk, according to a lengthy New York Times article published Tuesday.

Struggling with razor-thin margins for long-term care residents, skilled nursing facilities and other long-term providers increasingly are boosting their bottom lines by offering post-acute rehabilitation services for people who intend to return to their own homes after their stay, the Times reported. But traditional nursing homes were not designed to provide this type of short-term, high-intensity care, such as therapy for knee replacement patients, sources told reporter Katie Thomas.

“These nursing homes were not built for this purpose,” said Dr. Arif Nazir, an associate professor of clinical medicine at Indiana University who studies geriatrics. “These patients are leaving the hospital half-cooked, and believe me, the latter part of the cooking is the hardest part.”

The benefit to providers and those investing in these facilities is obvious: Medicare pays 84% more for post-acute patients than Medicaid pays for long-stay residents.

There now is a “bull market in the once-struggling industry as investors clamor to snatch up homes with the most potential to bring in short-term patients,” Thomas wrote. Last year, the sale price of a nursing home bed averaged $76,500, she noted, citing Irving Levin statistics.

To attract short-term patients and beef up Medicare reimbursements, facilities are introducing luxurious amenities and marketing themselves as hospitality providers as much as health care providers, the Times reported.

Yet the risks to patients also are becoming obvious, Thomas argued in her article. Too many operators still rely on the traditional nursing home operating model, meaning they are short-staffed and do not employ clinicians with the appropriate level of expertise for higher-acuity patients. As a result, patients are being neglected, with dire results.

“Deaths attributed to lapses in care are not uncommon,” Thomas wrote. She focused on the case of a New Jersey woman who allegedly died after a stint in a short-term rehab facility left her malnourished and suffering from a severe bedsore.

Industry leaders acknowledged that care quality is not uniform, but they said that it is improving. This is due both to efforts within the industry and pressure from hospitals and other providers, which under the Affordable Care Act stand to lose money if they work with substandard post-acute operators, said David Gifford, M.D., senior vice president of quality and regulatory affairs at the American Health Care Association/National Center for Assisted Living, the nation’s largest long-term care provider association.

Lapses in care quality might also be addressed by a new breed of company, such as Arizona-based developer Santé Partners, according to the Times article. Santé Partners focuses exclusively on serving short-term rehab patients in upscale facilities, and the singular focus enables a higher level of care, the company’s president and chief executive, C. Mark Hansen, told Thomas.

Santé is hardly alone in seeing the trend toward post-acute care—driven both by Medicare rates and consumer demand for this type of care in high-end surroundings—as transformative for the industry.

Last March, skilled nursing and short-stay rehabilitation developer Mainstreet announced a joint venture with one of the nation’s largest skilled nursing companies, Ensign Group (NASDAQ: ENSG), to develop five “healthcare resorts,” SHN reported at the time. Indiana-based Mainstreet also launched a new operating company.

“Mainstreet is committed to fundamentally changing the way health care is delivered,” founder and CEO Zeke Turner said of the new company launch. “Consumers are demanding the kind of high-end, hospitality-oriented amenities that Mainstreet builds. The decision to move into operating some of the facilities we build is a natural one and consistent with our mission to transform the industry across the United States.”

Written by Tim Mullaney