Kaiser Family Foundation: Medicare Spending and Use of Medical Services for Beneficiaries in Nursing Homes and Other Long-Term Care Facilities—A Potential for Achieving Medicare Savings and Improving the Quality of Care

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Kaiser Family Foundation: Medicare Spending and Use of Medical Services for Beneficiaries in Nursing Homes and Other Long-Term Care Facilities—A Potential for Achieving Medicare Savings and Improving the Quality of Care

We find that beneficiaries living in long-term care facilities account for a disproportionate share of Medicare spending, with relatively high rates of hospitalizations, emergency room visits, skilled nursing facility admissions and other Medicare-covered services. The relatively high Medicare spending is incurred not only by long-term care residents who die within the year, or those who transition from another setting into a long-term care facility, but also by beneficiaries living in a facility throughout the calendar year. Studies indicate that 30 to 67 percent of hospitalizations among facility residents could be prevented with well-targeted interventions.3 Others have identified factors that contribute to preventable hospitalizations, including liability concerns, limited staff capacity, financial incentives, and physician preferences.4 This analysis illustrates how successful efforts to reduce the rate of preventable hospitalizations could yield savings to Medicare. Such efforts, if carefully implemented, could also help to improve the quality of patient care for Medicare’s oldest and most frail beneficiaries.

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