1 Does the Supply of Long-term Acute Care Hospitals Matter? Geographic Location and Outcomes of Care for Medicare Ventilator Cases Presented by Kathleen Dalton, PhD Co-investigators Sara Freeman, MS, and Barbara Gage, PhD RTI International Presented at Academy Health, June 2008 Funding Source: Centers for Medicare and Medicaid Services 3040 Cornwallis Road ■ P.O. Box ■ Research Triangle Park, NC Phone

Background Definition: Acute facility w/ ALOS> 25 days High-acuity, medically complex patients Ventilator support; other respiratory diseases; wound care; sepsis Account for <2% Medicare discharges nationally Post-discharge LTCH referral generates a new DRG payment LTCHs have the highest costs and highest DRG rates of any Medicare PPS 2

Background Number of LTCH facilities is growing 281 in 2001 increased to 392 by 2006 (+40%) New facilities tend to be for-profit and specialize in respiratory care Great geographic variation in supply of LTCH facilities and beds Highest in South and Southwest Many geographic areas have none 3

Background Most common LTCH referrals from short-stay acute hospitals are ventilator support DRGs Vent cases can also be discharged to SNF and inpatient rehab (IRF) Majority of non-LTCH vent cases finish their care in the original acute setting Local vent LTCH referral rates are as high as 40% in parts of Texas 4

Study Question: What happens in areas that have no LTCHs? If we look at clinically similar vent patients, are there area-level differences in episode outcomes? Medicare inpatient days or costs? Mortality? Time to home discharge? Readmissions following a home discharge? 5

Design: Sample From licensure files: identify matched metropolitan study areas with and without LTCHs From FY 2004 Medicare claims, identify all index cases with IPPS ventilator support DRGs (“Index” = no previous admission within 60 days) From FY 2004 and 2005 hospital and SNF claims, follow beneficiary until episode is closed by: Discharge home followed by 60+ days without further admission Discharge into long-term care (non-Medicare, without further readmission) Death Exclude cases with death <=7 days from index admission 6

Design: Analysis 1.From intervention area cases only, construct probability model for LTCH referral using patient-level predictors 2.Use coefficients to compute predicted pr(LTCH) for all vent episodes 3.Group all episodes into low, medium and high probability 4.By probability group, examine area-level differences in post-acute referral, utilization, cost and clinical outcomes. 7

LTCH Locations at Time of Study Sample (2004) 8

Matched Study Areas (1): 9 1a. Washington and Oregon New YorkMichigan

Matched Study Areas (2): 10 1a. Washington and Oregon North Carolina Virginia

Matched Study Areas (3): 11 1a. Washington and Oregon Oregon Washington

Matched Study Areas (4): 12 1a. Washington and Oregon Southern CaliforniaNorthern California

Descriptive Statistics 13

LTCH Referral = f (demographics, pr_dx, co-morbidities, trach, other proc codes) 14

Group Sizes by Predicted Referral Probabilities 15

Substitution Effects: What Levels of Care are LTCHs Replacing? 16

Adjusted Episode Outcomes: Y = f(LTCHarea, patient level variables, index hospital characteristics, location, other PAC) Stratified by low / medium / high Prob(LTCH) Coefficient on LTCH area indicator identifies average area- level difference in outcomes Referent is case remaining in acute setting Outcome measures: Episode length; Medicare days; Part A payments (all log- linear) Mortality; home discharge; acute readmission (all as logit) 17

Findings Summary LTCH supply may be associated with Lower utilization per episode Similar Medicare Part A costs per episode No significant differences between LTCH areas and non-LTCH areas in clinical outcomes Similar mortality and readmissions Marginal evidence suggesting more rapid discharge to home 18

Area-level Differences in Utilization: 19

Area-level Differences in Payments: 20

Area-level Differences in Mortality: 21

Area-level Differences in Home Discharge: 22

Area-level Differences in Readmissions: 23

Discussion Unadjusted area-level differences are misleading Lower utilization and no differences in episode costs for high-probability groups are both unexpected findings Possible policy implications would be to try to limit LTCH referral for less complicated cases Finding of no differences in mortality is at odds with previous work (Rand, MedPAC, RTI), associating LTCH referral with lower mortality 24

Limitations / Other Design Issues Referral model lacks important clinical information not found on claims Needs consistent patient assessment tool across inpatient settings Average area-level differences is a blunt measure of impact Time-to-event model might be better for assessing differences in clinical outcomes 25