The following article is the second in a three-part series on the changing landscape of health care and its impact on our community.
By BEVERLY ITO, PharmD
Our current health care structure is a complex system of fragmented programs and services, with health care costs rising at an unsustainable rate. Passage of the Affordable Care Act in 2010, which aims to lower the cost of care, provide better care, and improve population health, accelerated a dramatic transformation in the way that health care in the United States is delivered and financed.
A New Direction in Health Care
Under health care reform, the entire health care system in the United States is undergoing historic change.
“Health care delivery is gravitating away from what I call an episodic care system to a population health management system,” says Jack Kurihara, who works in strategic development for a large academic health system.
The current health care system is fragmented – services are offered through a complex system of disconnected programs funded by different government offices and insurance programs, such as Medicare and Medi-Cal. The new model is based on an integrated delivery system where services are coordinated among providers, including hospitals, physicians, nursing homes and community-based service providers under a capitated rate.
Nursing homes in particular will be challenged by this new direction in health care delivery as the use of hospitals and nursing homes, both costlier forms of care, is becoming more limited.
According to www.calduals.org, a website contracted with the California Department of Health Care Services to enable transparency and dialogue regarding Medicare/Medi-Cal integration, “Shifting services out of institutional settings and into the home and community will help create a person-centered health care system that is also sustainable.”
Effects on Nursing Home Residents
Some of the effects of health care reform are already being experienced by nursing home residents.
In this new system, health plans, not an individual or nursing home, determine whether individuals use hospitals or nursing homes for care – or neither. In the past, individuals at home could, upon referral from a doctor, enter a nursing home. Going forward, an individual’s health maintenance organization (HMO)/health plan might not allow them to enter a nursing home, but may instead approve the less costly option of adult day care. This is consistent with health care reform’s focus on keeping people in their homes rather than in a facility.
In the future, even if an individual is allowed to use a nursing home, he or she may only access a particular nursing home (for example, Keiro Nursing Home) if his or her HMO/health plan is contracted with that nursing home.
With its emphasis on cost-saving, health care reform also affects the length of time an individual may stay in a nursing home or hospital. In the past, if an individual needed to go to the hospital for treatment, traditional Medicare would have covered three to five days in the hospital, then four to six weeks in a nursing home for rehabilitation. Now, the HMO/health plan determines how long a person can stay in each place. In one recent case, an individual was allowed to stay in the nursing home for only three days following their hospital stay.
Unique Challenges for Keiro
Health care reform poses some unique challenges for relatively small, culturally sensitive providers like Keiro Senior HealthCare, where 60% of its nursing home residents use Medicare and Medi-Cal.
“Keiro’s challenge is to figure out how it can still get funding and still maintain its exclusive relationship with the Japanese American community,” says Rick Shinto, MD, MBA, president and CEO of a managed health care organization.
“Keiro has been contracting with managed care plans in order to access the same residents we’ve been serving through Medicare or Medi-Cal,” explains Makoto Nakayama, PharmD, MBA, consultant and former hospital administrator, and chairman of the Keiro Nursing Home board of directors. “As a contracted provider, we will have to accept all residents referred by the health plan, and that’s typically within a certain geographic area.”
An even bigger challenge than diversity is the anticipation that nursing home providers will have to care for sicker residents while receiving lower reimbursement rates.
“Certain organizations may put sicker patients in skilled nursing facilities, which will put Keiro at risk financially because those sicker patients will require more clinical care, which translates to possibly extra staffing, a higher skill mix of the staff, and additional resources such as pharmaceuticals,” says Kurihara.
Preparing for the Future
Whether the current version of the health care law continues, is amended, or eliminated, the way that health care is delivered in the U.S. is undergoing historic change that is not likely to reverse itself, due to the increasing and unsustainable cost of health care, the need to improve the access to and quality of care, the rise in the amount of chronic diseases, and the aging of the baby boomers. The transformation of health care delivery and financing is upon us and will continue to gain momentum in the coming years.
The changes accompanying health care reform are complex, but Keiro is doing what it can to prepare for the future. For many years, Keiro has been engaged in scenario-based planning, examining the intersection of community relevance and reimbursement, for the organization’s strategic planning.
Keiro continues to contract with various health plans and hospitals so that it can serve current and future residents.
Consistent with the direction of health care reform, Keiro is also continuing its wellness initiatives so that it can reach out to the 96% of people 65 and over who are aging at home. Through conferences and how-to videos for caregivers; online fact sheets at www.keiro.org and the Genki Woman blog at www.genkiwoman.org on healthy aging; wellness-focused walks and events; lifelong learning courses on memory, fall prevention, diabetes, and healthier living; and most recently, interactive sessions on Medicare and health care reform, Keiro has been supporting our community so that everyone can age with confidence, no matter where they live.
Through MedCHAT, a hands-on learning experience about Medicare, Keiro, along with 20 other senior services organizations in California, is partnering with the Center for Health Care Decisions and Leading Age California to provide input about the future design of the Medicare program. This is also part of Keiro’s Health Literacy Project (HeLP), which educates individuals and communities to understand the changes in the evolving health care system and how to access related benefits.
For more information and videos about health care reform and its impact on Keiro, visit www.keiro.org/health-care-reform-2013.
About Keiro Senior HealthCare
For over 50 years, Keiro Senior HealthCare has been committed to its mission of enhancing the quality of senior life in our community. The founders established Keiro to meet the specific needs of the Issei pioneers, and since that time Keiro has been developing and offering new programs and services in response to the changing needs in the community. For over a decade, this has included a variety of community-based education programs like our well known caregiver’s conferences and the establishment of The Institute for Healthy Aging at Keiro to support people to age in place at home, while preventing and managing chronic health conditions.
As the community continues to evolve and faces new challenges like health care reform, Keiro will always be there to help our community make sense of the changes and live with vitality.
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Beverly Ito has been with the Keiro organization for 39 years. She currently serves as administrator of Keiro Intermediate Care Facility and chief compliance officer of Keiro Senior HealthCare. She also holds a Doctor of Pharmacy degree from the University of Southern California. She is a member of the Alzheimer’s Association Asian Pacific Islanders Dementia Intervention and Advocacy Council (APIDIAC) and has been active with community organizations such as the Pasadena Bruins basketball team and Japanese American Optimists Club (JAO).