Early Illness Detection in Residents Saves Missouri Nursing Homes and Payers $32 Million

Senior man getting blood pressure takenEarly illness detection has long been recognized for its importance in improving nursing home resident recovery and health outcomes. Now, thanks to a study at the University of Missouri, it’s evident that early illness detection also saves facilities significant money.

The study, “Financial and Work-flow Benefits of Reducing Avoidable Hospitalizations of Nursing Home Residents,” was recently published in The Journal of Nutrition, Health & Aging. The study included analysis of 11 Missouri nursing homes’ financial data across six years.

This study isn’t the first to examine the cost of rehospitalizations from nursing homes. One study published in 2010 examined hospital readmissions of Medicare beneficiaries who had been discharged to skilled nursing facilities within 30 days. Those readmissions cost Medicare $4.34 billion during 2006.

How Early Illness Detection Saves Money

The University of Missouri study details that when nursing home residents are hospitalized, payer sources like Medicare, Medicaid, and private insurers withhold revenue during the time the resident is in the hospital. The result is non-billable days where residents are hospitalized. Even small periods of non-billable days can quickly add up, especially for nursing homes where patients are hospitalized multiple times per year.

The 11 nursing homes included in the study voluntarily provided their financial data. The average bed size was 199, though nursing home size ranged from 115 to 321 beds.

The study reviewed occupancy data provided by the nursing homes to estimate the amount of potential lost revenue that each nursing home experienced annually. Then, the payment per day for each payment type was calculated with long and short stay data.

Ultimately, the study found that from 2014 to 2019, the 11 nursing homes lost significant income due to non-billable days because residents were hospitalized. Each facility experienced a loss ranging from $590,000 to more than $5 million when long and short stay residents were hospitalized. The 11 nursing homes as a group experienced a loss of $32.5 million in potential revenue because of long and short stay hospitalizations. Those losses amounted to an average $500,000 potential revenue loss per year per 200 beds per nursing home.

By reducing hospital admissions from 2015 through 2019, with 2014 serving as a baseline, those nursing homes saved payers an estimated $31,349,900 over five years. Additionally, those nursing homes saw an estimated revenue recapture of $2,659,384 by reducing empty bed and non-billable days.

Additional Benefits of Early Illness Detection

Reducing hospital admissions provided financial benefits to the nursing homes and the payers, but it provided other important benefits, too. In an effort to help reduce hospitalization, nursing homes hired advanced practice registered nurses. Those nurses hold either a doctoral or master’s degree in nursing and their specialized training allows them to support and improve the skills of the overall nursing staff.

That increased support helped to reduce staff turnover. In turn, nursing homes recaptured revenue lost through this more effective nursing, and were then able to pay the salaries for this more specialized help.

Detecting illness early on is always a priority because of the benefit it offers residents. However, this study highlights the financial benefits that senior care settings stand to receive if they’re able to effectively detect illness early on and prevent unnecessarily hospitalization. It’s an excellent reason to reevaluate your current illness detection procedures and look for ways to make this detection more effective.

Topics: Administration , Facility management , Featured Articles , Medicare/Medicaid , Resident Care , Staffing , Training