Occupancy rates at skilled nursing facilities remain well below pre-pandemic levels, a trend that weakens the financial health of nursing homes and means fewer test referrals to clinical laboratories that service them
COVID-19 is taking a financial bite out of the nursing home industry as seniors opt for home care rather than entering nursing facilities. If this trend becomes permanent, clinical laboratories may have to ramp up their ability to collect specimens from a growing population of patients who choose non-traditional healthcare settings. And as the SARS-CoV-2 pandemic stretches on, the exodus of seniors from nursing home facilities provides another example of how COVID-19 is altering consumers’ access to healthcare.
According to the most recent “AARP Nursing Home COVID-19 Dashboard Fact Sheets,” the COVID-19 pandemic “has swept the nation, killing more than 160,000 residents and staff of nursing homes and other long-term care facilities.”
Because COVID-19 has hit nursing home residents the hardest, many families have decided elderly parents may be safer living with relatives than in nursing homes that have proven vulnerable to widespread outbreaks. In addition, COVID-19-related lockdowns in skilled nursing facilities (SNFs) have provided families with additional motivation to choose home care for elderly relatives.
For example, in “Should You Bring Mom Home from Assisted Living During the Pandemic?” retired Seattle physician Alison Webb, MD, told Kaiser Health News (KHN) she moved her 81-year-old father, who has moderate dementia, out of assisted living so he could be with grandchildren and enjoy gardening rather than remain in his senior facility, where COVID-19 protocols kept him sequestered from friends and family.
This is not an isolated example and may have a long-term impact on clinical laboratories that service skilled nursing facilities.
Patient Volume Falls Dramatically at Skilled Nursing Facilities
While hospital discharge rates are rebounding to near pre-pandemic levels, an Avalere Health analysis of Medicare fee-for-service claims found a “more drastic and lasting decline in patient volume” at skilled nursing facilities. In contrast, Avalere found home health has experienced a rebound in patient numbers beginning last May.
“In the early months of the COVID-19 outbreak in the US, we saw a substantial decrease in hospital discharges to both skilled nursing facilities and home health agencies,” said Heather Flynn, Consultant at Avalere, in an Avalere press release. “Hospital discharges are steadily moving back to pre-pandemic levels, but our analysis points to an uneven ‘return to normal’ across care settings.”
The graph above, taken from the Avalere press release, reveals “a stark decline in inpatient hospital discharges and discharges to both SNF and home health beginning in February 2020. The analysis further indicated that the skilled nursing industry has experienced a more drastic and lasting decline in patient volume relative to total hospital volume and discharges to home health (where rebounds were observed beginning in May). Of note, discharges to home health experienced a year-over-year increase in June 2020, at 4.6% greater discharge volume when compared to June 2019, while discharges to SNF remained notably below pre-pandemic levels at a 25.4% decrease in year-over-year discharges.” (Graphic copyright: Avalere Health.)
“Skilled nursing facility occupancy typically slows in April after an uptick during the flu season, but we haven’t seen anything like this in recent memory,” Kauffman said in an NIC press release which announced nursing home occupancy had dropped to 78.9% last April, 2020, down 5.5% from 2019. “The long-term effect of COVID-19 on skilled nursing occupancy remains to be seen as the industry adjusts to a new normal.”
Since then, the occupancy rate in skilled nursing properties has fallen even further. The latest Skilled Nursing Monthly Report announced a new low of 74.2%.
Will Clinical Laboratories That Service Skilled Nursing Homes Be Affected?
Mark Parkinson (above), President and CEO of the AHCA and former Governor of Kansas, maintains a successful COVID-19 vaccination rollout and lifting of nursing home visitation bans are keys to the industry’s recovery. “I think the census needs to recover about 1% a month. If we can recover 1% a month on a steady basis, that gets us to the end of 2021,” Parkinson told Skilled Nursing News. “And we’re still down, but we’re down 5% or 6%; we’re not down 13% or 14%. If we recover a half a percent, some businesses will be okay, but not all. If we only recover half a percent, we don’t get any more money, folks are going to have problems. If we don’t have any recovery on census … things are very, very bad.” (Photo copyright: Kansas Health Institute.)
There are signs the nursing home industry may have to contend with home healthcare becoming a permanent competitor for patients. In a news release last spring, the Mayo Clinic announced it was partnering with Medically Home of Boston to launch a virtual hospital-at-home model aimed at delivering “advanced care” from a network of paramedics, nurses, and support team in a home care setting.
The initiative means patients can receive a range of healthcare services in their homes that traditionally required a hospital setting. The services include:
Infusions,
Skilled nursing,
Clinical laboratory and imaging services,
Behavioral health and rehabilitation services.
While the initial program rollout will allow Mayo Clinic to free up ventilators and hospital space for COVID-19 patients, John Halamka, MD, an emergency medicine physician and President of Mayo Clinic Platform, told Modern Healthcare, “Next, we’ll look to forward-thinking organizations who believe like we do in that care should be more convenient and accessible.”
Discharge Doctors Now Choose Home Healthcare Over Skilled Nursing Facilities
Physicians also are embracing home care in greater numbers. As reported in Forbes, a 2020 William Blair survey showed 81% of physicians responsible for discharge planning would send patients to a home health agency rather than a skilled nursing facility. Pre-pandemic, only 54% of discharging physicians expressed a preference for home care, according to the survey.
Greg Chittim, Partner at Health Advances, an international strategy consulting firm headquartered in Boston, points to improvements in virtual technologies as the catalyst for home care’s growth.
“One of the silver linings of COVID-19 is the level of investment we are seeing in virtual care technologies,” Chittim told Forbes. “And beyond the technologies, providers and patients are building that comfort with traditional real-time communication. I think we have moved 10 years ahead in 10 months.”
As the COVID-19 pandemic rolls on and home health initiatives become more commonplace and grow in popularity, clinical laboratory managers may want to develop solutions that assist home healthcare providers with collecting and shipping patient specimens for testing.
As the latest attempts to replace the Affordable Care Act (ACA) generate increased debate over protections for pre-existing conditions, Kaiser Family Foundation highlights that using pre-ACA underwriting guidelines would result in an estimated 52-million Americans unable to obtain coverage
With the American Health Care Act (AHCA) clearing the House on the way to the Senate, the public and media are scrutinizing key points. One highly-contested topic is insurance availability for people with pre-existing conditions.
Unfortunately, as most pathologists and medical laboratory managers know, media coverage—whether from the left or the right—tends to play up points that are sensational and resonate with their core audiences, but often fail to provide a full and accurate picture of the subject being covered. Thus, it is refreshing when useful information and insights about aspects of healthcare in America are presented in a fair and measured way.
Biased media coverage is certainly true on the issue of health insurance coverage for individuals who are considered to have pre-existing conditions. However, as a December 2016 Kaiser Family Foundation (KFF) study highlights, protections for pre-existing conditions were not always guaranteed. In fact, if insurers currently used the medical underwriting practices in place prior to implementation of the Patient Protection and Affordable Care Act or ACA (also known as Obamacare), the study estimates that 52-million adults under the age of 65 would likely be denied coverage on the individual market.
According to US Census Bureau figures, at the start of 2017 there were 324-million Americans. Using KFF’s figures, this means that 16% of the population are considered to have pre-existing conditions.
Who is Impacted by the Individual Market?
KFF was quick to point out that many of the 52-million people with pre-existing conditions have always qualified for insurance through their employer or a public program such as Medicaid. The foundation’s estimates show that in 2015, only 8% of the non-elderly population relied on individual market insurance plans, such as those plans offered on the ACA healthcare exchange.
The graph above shows the percentage of American’s with pre-existing conditions who “most likely” would have been denied insurance in the Individual Marketplace prior to the Affordable Care Act (ACA). According to the Kaiser Family Foundation (KFF), while the proposed American Health Care Act (AHCA) does not enable insurance companies to deny coverage for these conditions, coverage premiums could increase if a state seeks a community rating waiver. (Image copyright: Kaiser Family Foundation.)
For many patients, obtaining health insurance through individual plans is often temporary and driven by a life event, such as job loss, divorce, marriage, or reaching the threshold of an age bracket for coverage through other programs. However, for some individuals—such as the self-employed, low wage earners, or early retirees—the individual market is the only option for obtaining health insurance. For this population, pre-ACA underwriting made coverage difficult to obtain and more expensive for patients with pre-existing conditions.
Pre-Existing Conditions Cover More than Just Conditions
Study authors also note that the estimate of 52-million individuals considered to have pre-existing conditions is conservative due to other factors considered in the underwriting process. Insurance companies also based denial and uprating on a range of other factors—such as:
Prescription medication;
Doctor visits or procedures;
Mental health conditions; and
Family history.
They list a table of 30 conditions, including pregnancy and eating disorders, that might qualify as a pre-existing condition along with a list of 40 medications that might also result in a denial of coverage.
Despite the already growing list of reasons for insurance denials, there’s yet another list with job occupations that might result in ineligibility. This means that even healthy individuals could find themselves without coverage due to how they earn their income.
Neither medications nor professions were considered in KFF’s estimates due to a lack of data.
Uncertainty and Instability in Individual Market Pricing
A 2001 KFF report showed yet another hurdle faced by enrollees in the individual market.
In this KFF study, researchers created seven hypothetical applicants and compared their conditions to the underwriting practices at major insurance companies. Even if applicants cleared the underwriting process, the premiums offered by the various insurance companies differed greatly. Prices for each applicant fluctuated between hundreds and thousands of dollars per month when coverage was available. Benefits changed between plans as well, with many plans exempting coverage for pre-existing conditions.
Even with insurance, coverage for maternity care, prescriptions, or mental health fell behind the options available through most group plans. Yet, these conditions are some that might facilitate the events mentioned in the 2016 study for entering the individual market.
In the study’s conclusion, the authors found, “Insurance carriers seek to avoid covering people who have pre-existing medical conditions, and when they offer coverage, often impose limitations on the coverage they sell. This can price insurance out of the reach of many consumers in poor health or create significant gaps in coverage that could result in being underinsured.”
Decreased Demand for Clinical Laboratory Tests
Both studies show similarities to many of the concerns cited for the new AHCA. Time Magazine recently published a list of pre-existing conditions under the new proposal. The list bears striking similarity to the list offered in the 2016 KFF study. Speaking with Time, Cynthia Cox, Associate Director at KFF said, “There are plenty of other conditions, even acne or high blood pressure, that could have gotten people denied from some insurers, but accepted and charged a higher premium by other insurers.”
If fewer people can access affordable preventative care, prescriptions, and medical laboratory services, disease diagnosis is delayed. In a 2013 KFF study into the impact a lack of insurance has on healthcare, study authors noted, “Consequently, uninsured patients have increased risk being diagnosed in later stages of diseases, including cancer, and have higher mortality rates than those with insurance.”
Supporters of the proposed AHCA legislation are quick to point out that it does not eliminate protections for people with pre-existing conditions. It simply provides a process for state governments to provide an alternative solution to the federal framework and regulations.
Regardless of the outcome, KFF’s studies make it clear that a decrease in access to insurance means patients skip medical procedures they do not see as essential or cannot afford. This could result in decreased demand for screening and prevention diagnostics, such as those offered by pathology groups and clinical laboratories.
Pathologists and clinical laboratory managers need to understand the reasons why different consumers have entirely different financial experiences with the health insurance obtained under the ACA
One of the interesting consequences of the Affordable Care Act is that there are different classes of consumers who have completely different experiences with the health insurance coverage obtained through the ACA’s health insurance exchanges. It is important for pathologists as well as clinical laboratory managers to understand this fascinating outcome from the Affordable Care Act.
On one end of the spectrum are consumers who—because their income is at or just above the poverty line—get ACA health insurance coverage with full or nearly all of the premium subsidized be the federal government. They are the happiest with the law. That is, until they need to pay deductibles of as much as $5,000 per year for individuals and $10,000 per year for a family.
At the other end of the spectrum are the consumers with incomes at or above the 400% of the poverty level. Because these individuals get little or no federal premium subsidy, they are stuck paying the full price of their health insurance coverage. It is this group that is most unhappy with the ACA. And, not only are they paying hefty monthly premiums for coverage, they are also stuck with the $5,000 and $10,000 annual deductible requirements. (more…)
CMS says it will take steps to rescind the final rule before its scheduled implementation on April 1, 2011
Clinical laboratories and pathology groups will welcome the news that the federal Centers for Medicare & Medicaid Services (CMS) will take steps to rescind the final rule that requires the physician’s signature be on all paper requisitions for medical laboratory tests ordered on behalf of Medicare patients. It means that implementation of the rule—now scheduled to become effective on April 1, 2011—will not happen if CMS officials act in a timely manner.
Dark Daily has learned that last Friday a conference call took place involving Jonathan Blum, Director of the Center for Medicare Management, and representatives from the American Association of Bioanalysts (AAB) and the American Clinical Laboratory Association (ACLA). During the conference call, Blum disclosed that a decision had been reached within CMS to rescind the final rule that would require physicians’ signatures on paper requisitions for medical laboratory tests. Apparently, CMS intends to take the steps necessary to rescind this final rule before its effective date of April 1, 2011. (more…)
