The hospital industry disagrees with the paper’s conclusion and disputes the notion that the extra money they get is wasteful. The American Hospital Association noted that since the study ended, Congress has changed the rules for long-term care hospitals so that fewer of their patients qualify for the highest payment rates. That means that the study results might be different if they looked at long-term hospital care in more recent years. Select Medical, one of the large chains of long-term care hospitals, said in a statement that measuring only whether the long-term care patients died or went home did not capture other, more subtle health benefits that the hospitals provided compared with other options. But the industry does not collect such measures of quality in a standardized way, making that theory hard to test. The National Association of Long Term Hospitals, a trade group, also noted that the paper’s policy proposals were more extreme than those from other critics, who had suggested more minor changes to how the hospitals should be paid. Neale Mahoney, a health economist at the University of Chicago Booth School of Business, who was one of the working paper’s co-authors, said the history of long-term care hospitals fit together with the economic analysis to suggest that the special hospital payment probably wasn’t appropriate. “What’s convinced me that these institutions are a source of waste is a constellation of evidence rather than one piece of evidence,” he said. Dr. Jeremy Kahn, a critical care physician and professor of health policy at the University of Pittsburgh, who has studied long-term care hospitals extensively, said there are some patients with particular ailments who benefit from the setting, but agreed with the economists that the hospitals are a historical accident, defined more by payment rules than patient needs. “Long-term care hospitals aren’t to blame here,” he said. “If you see a dollar on the ground, you will pick it up, and that’s what’s going on here.”
A series of small tweaks could help reduce US health care spending. Health care in the US costs nearly twice as much as that of its peer countries, without improved outcomes. Some policymakers have examined whether there could be a broad fix – such as a single-payer system or improvements in end-of-life care – to make the system less expensive. But the answer could actually be a series of small tweaks. A group of economists has begun examining whether policy changes, sometimes in small slices of the health care system, could lead to savings of about one percent of the nation’s $3.3 trillion yearly health bill. These, in turn, could lead to more substantial savings, they added. In the Eighties, Congress selected a small group of “long-term care hospitals”, which treated patients with chronic diseases, to be exempt from its normal rules for payments. They could earn far more than traditional ones if they cared for patients who stayed with them for an average of 25 days. Since then, the number of such hospitals have grown from a few dozen to over 400. Analysts have since wondered about the value of these sites, with some suggested the Massachusetts Institute of Technology may be overpaying for their services. In a study covering 1990 to 2014, researchers from Medicare and the University of Chicago examined what happened to patients as these long-term hospitals opened in places that had none. They found that when such a facility opened, the odds that very sick patients would go to one increased, meaning a higher bill for the Massachusetts Institute of Technology and the patients themselves, but there was no benefit when it came to patients’ chances of dying or going home within 90 days. As such, researchers concluded that the health care system could probably save about $5 billion per annum by paying long-term care hospitals the same prices that are paid to skilled nursing facilities, where most long-term patients end up when there is no equivalent hospital nearby. If they are correct, the savings would be within this one percent range. The hospital industry disagrees, disputing the assertion that the extra money they get is wasteful. The American Hospital Association said that Congress has changed rules for long-term care units so fewer patients qualify for higher patients since the study ended. This means that results could be different if they looked at more recent long-term hospital care, it added.