June 24, 2025 • 22 mins
Health Affairs' Rob Lott interviews Robert Burke of the University of Pennsylvania about his recent paper which evaluates outcomes for skilled nursing facilities value-based purchasing programs.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Rob Lott (00:00):
Hello, and welcome to A Health Podicy. I'm your host,
(00:04):
Rob Lott. When a patient isdischarged from the hospital to
a skilled nursing facility, thegoal is for them to continue on
the pathway to recovery. Thingslike physical therapy,
occupational therapy, closeclinical monitoring are all
(00:26):
meant to foster healing andbuild strength and generally
improve patient's health to thepoint that they're ready to go
home. Ideally, that return homemeans a return to stability and
good health going forward.
But of course, it doesn't alwayswork out that way.
Unfortunately, some proportionof patients are readmitted to
(00:48):
the hospital not long afterbeing discharged from the
skilled nursing facility.Sometimes that's just the
unfortunate consequence ofdeclining health, but
researchers have recognized thatsome skilled nursing facilities
are more likely than others tosee their patients readmitted
after discharge. This suggeststhat frustratingly, facilities
(01:12):
are delivering lower qualitycare perhaps, or making less
reliable discharge decisions. Isit possible to close the gap
between the skilled nursingfacilities with high readmission
rates and low readmission rates?
That's the subject of today'shealth policy. I'm here with
Doctor. Robert Burke, ahospitalist and associate
(01:35):
professor of medicine at theUniversity of Pennsylvania
Perelman School of Medicine.Together with his coauthors,
Doctor. Burke has a new articlein the June issue of Health
Affairs, evaluating the skillednursing facility value based
purchasing program.
This effort was implemented byMedicare about ten years ago,
(01:56):
and it's aimed specifically atreducing readmissions among
skilled nursing facilities. Sodid the program work? The
answer, of course, is complex,and I'm thrilled that we have
the expert evaluator to walk usthrough it all here today.
Doctor. Burke, welcome to TheOdyssey.
Robert Burke (02:15):
Thank you so much for having me.
Rob Lott (02:17):
All right, let's start with some background on skilled
nursing facilities in Americajust to sort of get our footing.
Who uses them and what's thebalance between short term stays
and long term stays Medicareversus non Medicare patients?
Robert Burke (02:34):
Great question. So there's about 15,000 nursing
homes in The United States.There's one in almost every
county, far more than there arehospitals, or I think it's a
surprise to some people. They'repart of the institutional, what
we call long term services andsupports system in The United
States, which sort of runs alonga spectrum of care in the home,
(02:54):
all the way to relativelyintensive care that's provided
in skilled nursing facilities.They have a range of names,
which I think leads to someconfusion.
You'll hear them called SNFs orskilled nursing facilities like
we talked about here. In my workas a hospitalist physician, I've
heard this called the big lie.And here's the big lie, which
(03:14):
is, Mr. So and so, you're goinggo home from the hospital and
you need some rehab. So you'regoing to go to a rehab and
you're going to get a couple ofweeks of rehab and then you'll
be to return home.
And then Mr. Jones is verysurprised and often disappointed
to find that, that rehab quoteunquote is a skilled nursing
facility. In fact, all postacute care in skilled nursing
(03:35):
facilities are also nursinghomes. They're all the same
thing, long term and short termcare in the same building.
Rob Lott (03:42):
So the big lie that I've never heard that before,
but it's fascinating. Obviously,when you think about a nursing
home, you think about people whoare sort of, to some extent,
potentially languishing there,they're, you know, gonna live
the rest of their lives thereperhaps. And so someone's coming
from having had a hip surgery orsomething like that, and they
(04:02):
see themselves surrounded bypeople who don't seem very
healthy or very well. Is thatsort of part of the psychic
confusion that's going on? Youhit the nail
Robert Burke (04:14):
on the head, I think. For most older adults,
that transition from thehospital to a skilled nursing
facility is a huge challenge totheir identity as a independent
person in the community. And Ithink they see, in some cases
rightly so, this is recognitionof diminishment in terms of
(04:34):
their ability to take care ofthemselves at home. And we find
that's a challenge, you know, totheir psyche and their thoughts
about the future.
Rob Lott (04:44):
So what do we know about these facilities? And as
you said, there's tremendousamount of variation, but I
assume there's also variation inthe quality of care that they're
delivering from facility tofacility?
Robert Burke (04:56):
Yes, you're exactly right about that. For
those who are interested,there's a great report by the
National Academies of Medicinein 2022 that's all about
improving quality in nursinghomes and really reviews a lot
of the data about nursing homequality. You know, it won't
surprise most of your listeners,I think, that, this report
(05:18):
compares itself to a priorreport in 1986 and they find
that very little has changedactually in terms of quality of
nursing homes over that period,which is very discouraging. The
most common way that, you know,older adult might find quality
data about a nursing home is onNursing Home Compare, which is
maintained by CMS. It's awebsite you can go to at
(05:40):
medicare.gov.
It compares nursing homes onthings like their nurse staffing
levels, their quality metrics,and inspections that are
conducted by CMS to evaluatetheir quality. These aren't
perfect metrics and they haven'tbeen shown to improve consumer
behavior very much, but they arereally multi dimensional,
they're rigorously collected andthey put nursing homes into sort
(06:04):
of five easy categories based onstar ratings, one star to five
star. We do know that nursinghomes are segregated in terms of
who's in them. If you're a poorolder adult, if you're someone
who's black, for example, morelikely to be in a lower quality
facility. And that, you know,even the locations of high and
(06:28):
low quality facilities reallymap socioeconomic disadvantage
across The US also.
And I'll just go back one moretime to say, you know, going
back to our big lieconversation, I think one of the
biggest surprises I find amongolder adults is one of the
quality metrics that's reportedis something called the
community discharge rate. Andthis is a really useful metric
(06:51):
of, how many people who leavethe hospital and go to this
nursing home for care areeventually able to return home.
And it's measured at one hundreddays following discharge because
for most people that's how longMedicare covers, in full or
partially, your nursing homestay. And I think most older
(07:11):
adults are surprised to see thatthat number is, you know, around
fifty five percent, much lowerthan they would think. And, you
know, I think there, again, itgoes back to that big lie
conversation.
If I were to be honest about itand say, you know, Mr. Jones,
actually your chances are aboutfiftyfifty if you'll return home
after this nursing home stay. Ithink many more older adults
might view that stay withsuspicion.
Rob Lott (07:34):
Wow, that's surprising. So just to clarify
the odds is, let's just in thiscase a fiftyfifty odds that
you're going to go from thenursing home back to the
hospital or just home first orsort of how do you factor in
those stops along the road backto the hospital, if you will?
Robert Burke (07:59):
Yeah. That's a great question. The community
discharge rate measures you haveto stay alive for that hundred
days, and you can't go back tothe hospital. And for thirty
days after you leave the nursinghome, you have to stay alive,
and you can't go back to thehospital or the nursing home. So
it's sort of a measure ofstaying alive and being able to
return to the community withoutgoing back to those places,
(08:21):
within that first one hundreddays.
Rob Lott (08:23):
All right. Well, against this backdrop, let's
talk about the skilled nursingfacility values based purchasing
program. How does it work? Whenwas it created and to whom does
it apply?
Robert Burke (08:37):
Yeah, good question. It was created by
statute in 2014 as a part of theProtecting Access to Medicare
Act. And it applies to all,traditional Medicare
beneficiaries. So fee forservice enrollees who leave a
hospital and go to a skillednursing facility for post
hospital care. It's also amandatory program for nursing
(08:58):
homes.
So, more than 97% of nursinghomes have to participate. The
program started in 2015. It runson a four year cycle. So 2015
was the first baseline year. Andin that year nursing homes were
compared to each other based ontheir thirty day readmission
rates.
Then two years later they werecompared to themselves in terms
(09:20):
of how much they were able toimprove their readmission rates.
And then two years after that in2019, the first financial
incentives were applied. And oneof the interesting things about
the program is you can sort ofwin as a nursing home through
either one of those pathways.You can either be a high
achiever of baseline, I havelower readmission rates than
most of my peers, or you canimprove over time more than your
(09:44):
peers. And either Medicare sortof takes whichever is the better
score and then assigns you afinancial incentive or penalty.
That incentive or penalty thoughis based on all of your Medicare
admissions, not just thereadmissions, but every
admission your nursing home gotfrom Medicare. And it can be up
to a 2%, penalty or up to abouta 3% bonus.
Rob Lott (10:07):
So what were your main research questions when you
started looking at this program?
Robert Burke (10:13):
Well, we were really excited to evaluate it
because to me, is the largesttest of pay for performance in
nursing homes, think in thehistory of nursing homes. Mostly
efforts to improve qualitybefore this have been focused on
sort of more of the stick andless of the carrot. And I think
this was really an intent to trypay for performance on a big
(10:34):
scale. So our main researchquestion was to what extent did
this program achieve itsintended aim? Did it result in
reductions in all cause thirtyday readmission rates?
But we were also concerned aboutto what degree it might have
introduced unintendedconsequences. And some of those
might be, for example, if youwere in a nursing home and you
(10:56):
were trying to reduce youradmission rates, maybe you would
try to keep people in thenursing home a little longer to
try to manage that risk. And sowe looked at length of stay in
the nursing home. Or maybe youwere more likely to keep people
even if they were sick. And sowe actually looked at thirty day
mortality rates to make surethat that wasn't the case.
And then finally, looked at,community discharge rates like
(11:18):
we've been talking about so farto see if this program had any
impact on your eventual abilityreturn home.
Rob Lott (11:24):
Great. All right. Well, let's hear it. What were
some of your top line findings?
Robert Burke (11:28):
We had about, we measured data from 2011 to 2021.
So, five or six years before theprogram and five or six years
after the program. There's asample of 17,000,000 stays. And
the top line finding is therewas no difference in any
outcome.
Rob Lott (11:46):
Wow. Okay. Were you surprised?
Robert Burke (11:48):
I was very surprised. One of the main
reasons I think is that nursinghomes report that their profit
margins are very low, in thespace of zero to one, maybe 2%.
And so I thought this might be ameaningful amount of incentive
to really spur change. And wedidn't find that.
Rob Lott (12:08):
Wow, that's really surprising. I wanna dig down on
that in a little bit, but firstlet's take a quick break. And
(12:33):
we're back. I'm here with doctorRobert Burke talking, with him
about his paper in the Juneissue of Health Affairs about
the skilled nursing facilityvalue based purchasing program.
And as he, just before thebreak, reported that they
basically found no meaningfulimprovement or differences
(12:56):
achieved by the program.
And I'm wondering if you can saya little more about, although
overall there was noimprovement, was there any sort
of variation in the kinds offacilities or the kinds of
populations served that maybemight have revealed some insight
(13:16):
about what's going on there?
Robert Burke (13:17):
Great question. We did look at some specific
subgroups of nursing homes tosee, did it matter by your
profit status or if you were apart of a chain, your location
in terms of being urban orrural, we really didn't find any
difference in any group or inany sensitivity analysis that we
did. The findings were the same,really no change in results of
(13:39):
the program.
Rob Lott (13:40):
Wow. Okay. So you said you were really surprised by the
outcome. I imagine once you hadthose initial results, you maybe
went for a long walk andscratched your chin or maybe got
some coffee with your colleaguesand tried to figure out what was
going on here. Do you have atheory that might explain what's
going on?
Robert Burke (14:01):
I do. And it's actually related to
complimentary work that isn't inthis publication, but we're also
working on. And two theoriesbased on that work. One is we
did actually look at the size ofthe individual incentive every
nursing home in the countryreceived. And what we found was
to our surprise, the medianamount of incentive that nursing
(14:24):
homes received was a penalty ofabout $10,000 And that's not
very much money when it comes toa nursing home budget.
It's certainly not enough tohire another nurse or buy an
x-ray machine and a technologistand the kinds of things we might
think about that might reducereadmission rates. And so
another part that we found aboutthat was that your financial
(14:44):
incentive or penalty reallyvaried year to year by nursing
home. And so I think it alsomade it really hard for nursing
homes to count on a consistentinvestment they could make to
reduce their readmission rates.And so I worry that the scope of
the incentives was too small.The other piece that we've
worked on is we visited actuallyeight nursing homes across the
country who were successfulunder the program to say, what's
(15:08):
the secret sauce?
How did they do it? And thatwork is still underway. But one
of the top line findings is thatI'm not sure we met a single
person in leadership in one ofthose nursing homes who had ever
heard of this program. And tome, that tells me there's a real
disconnect between sort of wherethese programs might be
interacting with a nursing homechain. It might not be at the
(15:31):
individual facility level, itmight be somewhere further up
the chain and the people who areactually providing the care that
might reduce readmissions on theground.
Rob Lott (15:38):
Wow, that's fascinating. I'm glad you
mentioned chains, right? So theidea might be that there's
someone at a corporate suitewho's watching these numbers,
but the person who's sort ofrunning the facility on a day to
day basis just isn't clued in.What's the landscape in terms of
(15:58):
chain skilled nursingfacilities? What's the balance
between small versus largecorporate ownership?
I know private equity has a rolein there too. Did you think
about that as you weredeveloping this evaluation and
how are you thinking about itnow?
Robert Burke (16:15):
It's such a good question. It turns out that
ownership data and financialtransparency are not hallmarks
of the nursing home industrycurrently. Sure. One of the
things we looked into waswhether our results vary
depending on what a nursinghome's net operating margin was,
its profit margin. And we didn'tfind any change there, but I
(16:38):
think there's good reason to beskeptical of who's listed as the
owner and what the finances arelike, because neither are
transparent.
And so it really limits ourability to understand to what
extent those influences areimportant. I think there's
emerging data that, you know,nursing home profits, for
example, are tunneled to relatedentities. And so what CMS sees
(17:01):
may not be the actual truth ofwhat's happening on the ground.
Rob Lott (17:04):
Fair enough. Okay, well, let's take one step even
further back kind of bigexistential question. Do you
feel like skilled nursingfacilities, or maybe I should
ask, do your findings help usunderstand whether skilled
nursing facilities are meetingour needs as a society? And as I
(17:27):
suspect the answer is probablyno, what obstacles are
preventing skilled nursingfacilities from meeting our
needs?
Robert Burke (17:36):
It's a great question. And a little bit of a
difficult one to answer justbecause nursing homes have
evolved to meet the needs ofthese two really different
populations. On the one hand,they're sort of a hospital step
down unit for people coming fromthe hospital, sick, older
adults, frail older adultscoming from the hospital. But
even in our group that providedthe most Medicare paid care,
(18:00):
that's only about 20% of theirbook of business. Most nursing
homes, 80% or more is Medicaidpaid long term care.
And so I really think of them inthat context predominantly
because that's their predominantbook of business. And in that
case, in both cases, I think,no, they're not currently
meeting our needs. Most olderadults dread going to one. It's
(18:22):
clear that from the quality datathat it's not optimal. And I
think honestly, the reason forthat is, you know, we've
historically and consistentlyunder invested in that kind of
care as a country.
It's really hard to think aboutreducing something like thirty
day readmission rates withoutthings like improved nurse
(18:42):
staffing or nurse turnover. Theaverage turnover rate in a
nursing home in The UnitedStates is 120% for their nurses.
And you say to yourself, how canit be more than 100%? Well, it's
because in a given year, notonly does all the nursing staff
turnover, but some of theirreplacements turnover in the
same year. It's really hard tothink about building consistent,
improved quality with that beingthe backdrop.
Rob Lott (19:05):
So imagine you get a call, actually right after we
finish this interview, yourphone rings and, you get a call
from a member of congress whojust read your paper, and they
ask you a question. The questionis, is the problem that this
(19:25):
program was intended to fixstill the right target for
intervention going forward? Andthen I guess the follow-up would
be if the answer is yes, wheredo we go from here? What changes
might you recommend to theprogram? Or should it just be
scrapped altogether, I guess?
Robert Burke (19:47):
Well, think about this in two ways. One is, I do
hope I get that thought, thatwould be great. Happy happy to
talk
Rob Lott (19:54):
if our members of congress were thinking about
these questions at this verymoment.
Robert Burke (20:03):
Maybe two things I might say about that. One is,
there actually is gonna be anopportunity written into the
statute to see to what extentthis program affects other
outcomes. And I do have somefaith that this same way of
incentivizing nursing homesmight improve some of those
things. So into statute is thatthe program is going to expand
(20:23):
other outcomes like nursestaffing, hospital associated
infections, falls with majorinjury, discharge function, your
function when you leave anursing home, a variety of new
measures. And I think thosereally, it's a nice way to see
to what extent financialincentives improve those things,
because I think something likefalls might be more under the
(20:46):
control of a nursing home thanreadmissions, certainly more
than nurse staffing.
That'll be very challenging forthis program to address, I
think, because the drivers ofthat are more than just
financial. But a second piece Imight add is that there's a lot
of opportunity here that I thinkhas been lost to test different
models of those financialincentives. We came upon a 2%
(21:09):
penalty and a 3% upside in termsof this particular set of
incentives, but there has beenvery little testing of what
actually works the nursing homesetting. And we could envision
ways of thinking about testinglarger downside or larger upside
risk, ways of perhaps setting afloor or even a larger upfront
(21:29):
investment for nursing homesthat historically underperform
as a way to help them besuccessful in programs like
this. I would love to see someregulatory changes like that,
that help us understand on abroader scale, what's the best
way to incentivize improvementsin care?
Rob Lott (21:44):
Great, well, that's perhaps a great spot for us to
wrap up. Really fascinatingstuff and it will be fascinating
to see if any of those potentialopportunities for further study
come up. So, doctor Burke, thankyou so much for taking the time
to chat with us today.
Robert Burke (22:04):
Thank you so much for having me.
Rob Lott (22:05):
And to our listeners, thanks for tuning in. If you
enjoyed the episode, pleaseleave a review, share it with a
friend, smash that subscribebutton, and tune in next week.
Thanks for listening. If youenjoyed today's episode, I hope
you'll tell a friend about ahealth policy.
Hello, and welcome to A Health Podicy. I'm your host,
(00:04):
Rob Lott. When a patient isdischarged from the hospital to
a skilled nursing facility, thegoal is for them to continue on
the pathway to recovery. Thingslike physical therapy,
occupational therapy, closeclinical monitoring are all
(00:26):
meant to foster healing andbuild strength and generally
improve patient's health to thepoint that they're ready to go
home. Ideally, that return homemeans a return to stability and
good health going forward.
But of course, it doesn't alwayswork out that way.
Unfortunately, some proportionof patients are readmitted to
(00:48):
the hospital not long afterbeing discharged from the
skilled nursing facility.Sometimes that's just the
unfortunate consequence ofdeclining health, but
researchers have recognized thatsome skilled nursing facilities
are more likely than others tosee their patients readmitted
after discharge. This suggeststhat frustratingly, facilities
(01:12):
are delivering lower qualitycare perhaps, or making less
reliable discharge decisions. Isit possible to close the gap
between the skilled nursingfacilities with high readmission
rates and low readmission rates?
That's the subject of today'shealth policy. I'm here with
Doctor. Robert Burke, ahospitalist and associate
(01:35):
professor of medicine at theUniversity of Pennsylvania
Perelman School of Medicine.Together with his coauthors,
Doctor. Burke has a new articlein the June issue of Health
Affairs, evaluating the skillednursing facility value based
purchasing program.
This effort was implemented byMedicare about ten years ago,
(01:56):
and it's aimed specifically atreducing readmissions among
skilled nursing facilities. Sodid the program work? The
answer, of course, is complex,and I'm thrilled that we have
the expert evaluator to walk usthrough it all here today.
Doctor. Burke, welcome to TheOdyssey.
Robert Burke (02:15):
Thank you so much for having me.
Rob Lott (02:17):
All right, let's start with some background on skilled
nursing facilities in Americajust to sort of get our footing.
Who uses them and what's thebalance between short term stays
and long term stays Medicareversus non Medicare patients?
Robert Burke (02:34):
Great question. So there's about 15,000 nursing
homes in The United States.There's one in almost every
county, far more than there arehospitals, or I think it's a
surprise to some people. They'repart of the institutional, what
we call long term services andsupports system in The United
States, which sort of runs alonga spectrum of care in the home,
(02:54):
all the way to relativelyintensive care that's provided
in skilled nursing facilities.They have a range of names,
which I think leads to someconfusion.
You'll hear them called SNFs orskilled nursing facilities like
we talked about here. In my workas a hospitalist physician, I've
heard this called the big lie.And here's the big lie, which
(03:14):
is, Mr. So and so, you're goinggo home from the hospital and
you need some rehab. So you'regoing to go to a rehab and
you're going to get a couple ofweeks of rehab and then you'll
be to return home.
And then Mr. Jones is verysurprised and often disappointed
to find that, that rehab quoteunquote is a skilled nursing
facility. In fact, all postacute care in skilled nursing
(03:35):
facilities are also nursinghomes. They're all the same
thing, long term and short termcare in the same building.
Rob Lott (03:42):
So the big lie that I've never heard that before,
but it's fascinating. Obviously,when you think about a nursing
home, you think about people whoare sort of, to some extent,
potentially languishing there,they're, you know, gonna live
the rest of their lives thereperhaps. And so someone's coming
from having had a hip surgery orsomething like that, and they
(04:02):
see themselves surrounded bypeople who don't seem very
healthy or very well. Is thatsort of part of the psychic
confusion that's going on? Youhit the nail
Robert Burke (04:14):
on the head, I think. For most older adults,
that transition from thehospital to a skilled nursing
facility is a huge challenge totheir identity as a independent
person in the community. And Ithink they see, in some cases
rightly so, this is recognitionof diminishment in terms of
(04:34):
their ability to take care ofthemselves at home. And we find
that's a challenge, you know, totheir psyche and their thoughts
about the future.
Rob Lott (04:44):
So what do we know about these facilities? And as
you said, there's tremendousamount of variation, but I
assume there's also variation inthe quality of care that they're
delivering from facility tofacility?
Robert Burke (04:56):
Yes, you're exactly right about that. For
those who are interested,there's a great report by the
National Academies of Medicinein 2022 that's all about
improving quality in nursinghomes and really reviews a lot
of the data about nursing homequality. You know, it won't
surprise most of your listeners,I think, that, this report
(05:18):
compares itself to a priorreport in 1986 and they find
that very little has changedactually in terms of quality of
nursing homes over that period,which is very discouraging. The
most common way that, you know,older adult might find quality
data about a nursing home is onNursing Home Compare, which is
maintained by CMS. It's awebsite you can go to at
(05:40):
medicare.gov.
It compares nursing homes onthings like their nurse staffing
levels, their quality metrics,and inspections that are
conducted by CMS to evaluatetheir quality. These aren't
perfect metrics and they haven'tbeen shown to improve consumer
behavior very much, but they arereally multi dimensional,
they're rigorously collected andthey put nursing homes into sort
(06:04):
of five easy categories based onstar ratings, one star to five
star. We do know that nursinghomes are segregated in terms of
who's in them. If you're a poorolder adult, if you're someone
who's black, for example, morelikely to be in a lower quality
facility. And that, you know,even the locations of high and
(06:28):
low quality facilities reallymap socioeconomic disadvantage
across The US also.
And I'll just go back one moretime to say, you know, going
back to our big lieconversation, I think one of the
biggest surprises I find amongolder adults is one of the
quality metrics that's reportedis something called the
community discharge rate. Andthis is a really useful metric
(06:51):
of, how many people who leavethe hospital and go to this
nursing home for care areeventually able to return home.
And it's measured at one hundreddays following discharge because
for most people that's how longMedicare covers, in full or
partially, your nursing homestay. And I think most older
(07:11):
adults are surprised to see thatthat number is, you know, around
fifty five percent, much lowerthan they would think. And, you
know, I think there, again, itgoes back to that big lie
conversation.
If I were to be honest about itand say, you know, Mr. Jones,
actually your chances are aboutfiftyfifty if you'll return home
after this nursing home stay. Ithink many more older adults
might view that stay withsuspicion.
Rob Lott (07:34):
Wow, that's surprising. So just to clarify
the odds is, let's just in thiscase a fiftyfifty odds that
you're going to go from thenursing home back to the
hospital or just home first orsort of how do you factor in
those stops along the road backto the hospital, if you will?
Robert Burke (07:59):
Yeah. That's a great question. The community
discharge rate measures you haveto stay alive for that hundred
days, and you can't go back tothe hospital. And for thirty
days after you leave the nursinghome, you have to stay alive,
and you can't go back to thehospital or the nursing home. So
it's sort of a measure ofstaying alive and being able to
return to the community withoutgoing back to those places,
(08:21):
within that first one hundreddays.
Rob Lott (08:23):
All right. Well, against this backdrop, let's
talk about the skilled nursingfacility values based purchasing
program. How does it work? Whenwas it created and to whom does
it apply?
Robert Burke (08:37):
Yeah, good question. It was created by
statute in 2014 as a part of theProtecting Access to Medicare
Act. And it applies to all,traditional Medicare
beneficiaries. So fee forservice enrollees who leave a
hospital and go to a skillednursing facility for post
hospital care. It's also amandatory program for nursing
(08:58):
homes.
So, more than 97% of nursinghomes have to participate. The
program started in 2015. It runson a four year cycle. So 2015
was the first baseline year. Andin that year nursing homes were
compared to each other based ontheir thirty day readmission
rates.
Then two years later they werecompared to themselves in terms
(09:20):
of how much they were able toimprove their readmission rates.
And then two years after that in2019, the first financial
incentives were applied. And oneof the interesting things about
the program is you can sort ofwin as a nursing home through
either one of those pathways.You can either be a high
achiever of baseline, I havelower readmission rates than
most of my peers, or you canimprove over time more than your
(09:44):
peers. And either Medicare sortof takes whichever is the better
score and then assigns you afinancial incentive or penalty.
That incentive or penalty thoughis based on all of your Medicare
admissions, not just thereadmissions, but every
admission your nursing home gotfrom Medicare. And it can be up
to a 2%, penalty or up to abouta 3% bonus.
Rob Lott (10:07):
So what were your main research questions when you
started looking at this program?
Robert Burke (10:13):
Well, we were really excited to evaluate it
because to me, is the largesttest of pay for performance in
nursing homes, think in thehistory of nursing homes. Mostly
efforts to improve qualitybefore this have been focused on
sort of more of the stick andless of the carrot. And I think
this was really an intent to trypay for performance on a big
(10:34):
scale. So our main researchquestion was to what extent did
this program achieve itsintended aim? Did it result in
reductions in all cause thirtyday readmission rates?
But we were also concerned aboutto what degree it might have
introduced unintendedconsequences. And some of those
might be, for example, if youwere in a nursing home and you
(10:56):
were trying to reduce youradmission rates, maybe you would
try to keep people in thenursing home a little longer to
try to manage that risk. And sowe looked at length of stay in
the nursing home. Or maybe youwere more likely to keep people
even if they were sick. And sowe actually looked at thirty day
mortality rates to make surethat that wasn't the case.
And then finally, looked at,community discharge rates like
(11:18):
we've been talking about so farto see if this program had any
impact on your eventual abilityreturn home.
Rob Lott (11:24):
Great. All right. Well, let's hear it. What were
some of your top line findings?
Robert Burke (11:28):
We had about, we measured data from 2011 to 2021.
So, five or six years before theprogram and five or six years
after the program. There's asample of 17,000,000 stays. And
the top line finding is therewas no difference in any
outcome.
Rob Lott (11:46):
Wow. Okay. Were you surprised?
Robert Burke (11:48):
I was very surprised. One of the main
reasons I think is that nursinghomes report that their profit
margins are very low, in thespace of zero to one, maybe 2%.
And so I thought this might be ameaningful amount of incentive
to really spur change. And wedidn't find that.
Rob Lott (12:08):
Wow, that's really surprising. I wanna dig down on
that in a little bit, but firstlet's take a quick break. And
(12:33):
we're back. I'm here with doctorRobert Burke talking, with him
about his paper in the Juneissue of Health Affairs about
the skilled nursing facilityvalue based purchasing program.
And as he, just before thebreak, reported that they
basically found no meaningfulimprovement or differences
(12:56):
achieved by the program.
And I'm wondering if you can saya little more about, although
overall there was noimprovement, was there any sort
of variation in the kinds offacilities or the kinds of
populations served that maybemight have revealed some insight
(13:16):
about what's going on there?
Robert Burke (13:17):
Great question. We did look at some specific
subgroups of nursing homes tosee, did it matter by your
profit status or if you were apart of a chain, your location
in terms of being urban orrural, we really didn't find any
difference in any group or inany sensitivity analysis that we
did. The findings were the same,really no change in results of
(13:39):
the program.
Rob Lott (13:40):
Wow. Okay. So you said you were really surprised by the
outcome. I imagine once you hadthose initial results, you maybe
went for a long walk andscratched your chin or maybe got
some coffee with your colleaguesand tried to figure out what was
going on here. Do you have atheory that might explain what's
going on?
Robert Burke (14:01):
I do. And it's actually related to
complimentary work that isn't inthis publication, but we're also
working on. And two theoriesbased on that work. One is we
did actually look at the size ofthe individual incentive every
nursing home in the countryreceived. And what we found was
to our surprise, the medianamount of incentive that nursing
(14:24):
homes received was a penalty ofabout $10,000 And that's not
very much money when it comes toa nursing home budget.
It's certainly not enough tohire another nurse or buy an
x-ray machine and a technologistand the kinds of things we might
think about that might reducereadmission rates. And so
another part that we found aboutthat was that your financial
(14:44):
incentive or penalty reallyvaried year to year by nursing
home. And so I think it alsomade it really hard for nursing
homes to count on a consistentinvestment they could make to
reduce their readmission rates.And so I worry that the scope of
the incentives was too small.The other piece that we've
worked on is we visited actuallyeight nursing homes across the
country who were successfulunder the program to say, what's
(15:08):
the secret sauce?
How did they do it? And thatwork is still underway. But one
of the top line findings is thatI'm not sure we met a single
person in leadership in one ofthose nursing homes who had ever
heard of this program. And tome, that tells me there's a real
disconnect between sort of wherethese programs might be
interacting with a nursing homechain. It might not be at the
(15:31):
individual facility level, itmight be somewhere further up
the chain and the people who areactually providing the care that
might reduce readmissions on theground.
Rob Lott (15:38):
Wow, that's fascinating. I'm glad you
mentioned chains, right? So theidea might be that there's
someone at a corporate suitewho's watching these numbers,
but the person who's sort ofrunning the facility on a day to
day basis just isn't clued in.What's the landscape in terms of
(15:58):
chain skilled nursingfacilities? What's the balance
between small versus largecorporate ownership?
I know private equity has a rolein there too. Did you think
about that as you weredeveloping this evaluation and
how are you thinking about itnow?
Robert Burke (16:15):
It's such a good question. It turns out that
ownership data and financialtransparency are not hallmarks
of the nursing home industrycurrently. Sure. One of the
things we looked into waswhether our results vary
depending on what a nursinghome's net operating margin was,
its profit margin. And we didn'tfind any change there, but I
(16:38):
think there's good reason to beskeptical of who's listed as the
owner and what the finances arelike, because neither are
transparent.
And so it really limits ourability to understand to what
extent those influences areimportant. I think there's
emerging data that, you know,nursing home profits, for
example, are tunneled to relatedentities. And so what CMS sees
(17:01):
may not be the actual truth ofwhat's happening on the ground.
Rob Lott (17:04):
Fair enough. Okay, well, let's take one step even
further back kind of bigexistential question. Do you
feel like skilled nursingfacilities, or maybe I should
ask, do your findings help usunderstand whether skilled
nursing facilities are meetingour needs as a society? And as I
(17:27):
suspect the answer is probablyno, what obstacles are
preventing skilled nursingfacilities from meeting our
needs?
Robert Burke (17:36):
It's a great question. And a little bit of a
difficult one to answer justbecause nursing homes have
evolved to meet the needs ofthese two really different
populations. On the one hand,they're sort of a hospital step
down unit for people coming fromthe hospital, sick, older
adults, frail older adultscoming from the hospital. But
even in our group that providedthe most Medicare paid care,
(18:00):
that's only about 20% of theirbook of business. Most nursing
homes, 80% or more is Medicaidpaid long term care.
And so I really think of them inthat context predominantly
because that's their predominantbook of business. And in that
case, in both cases, I think,no, they're not currently
meeting our needs. Most olderadults dread going to one. It's
(18:22):
clear that from the quality datathat it's not optimal. And I
think honestly, the reason forthat is, you know, we've
historically and consistentlyunder invested in that kind of
care as a country.
It's really hard to think aboutreducing something like thirty
day readmission rates withoutthings like improved nurse
(18:42):
staffing or nurse turnover. Theaverage turnover rate in a
nursing home in The UnitedStates is 120% for their nurses.
And you say to yourself, how canit be more than 100%? Well, it's
because in a given year, notonly does all the nursing staff
turnover, but some of theirreplacements turnover in the
same year. It's really hard tothink about building consistent,
improved quality with that beingthe backdrop.
Rob Lott (19:05):
So imagine you get a call, actually right after we
finish this interview, yourphone rings and, you get a call
from a member of congress whojust read your paper, and they
ask you a question. The questionis, is the problem that this
(19:25):
program was intended to fixstill the right target for
intervention going forward? Andthen I guess the follow-up would
be if the answer is yes, wheredo we go from here? What changes
might you recommend to theprogram? Or should it just be
scrapped altogether, I guess?
Robert Burke (19:47):
Well, think about this in two ways. One is, I do
hope I get that thought, thatwould be great. Happy happy to
talk
Rob Lott (19:54):
if our members of congress were thinking about
these questions at this verymoment.
Robert Burke (20:03):
Maybe two things I might say about that. One is,
there actually is gonna be anopportunity written into the
statute to see to what extentthis program affects other
outcomes. And I do have somefaith that this same way of
incentivizing nursing homesmight improve some of those
things. So into statute is thatthe program is going to expand
(20:23):
other outcomes like nursestaffing, hospital associated
infections, falls with majorinjury, discharge function, your
function when you leave anursing home, a variety of new
measures. And I think thosereally, it's a nice way to see
to what extent financialincentives improve those things,
because I think something likefalls might be more under the
(20:46):
control of a nursing home thanreadmissions, certainly more
than nurse staffing.
That'll be very challenging forthis program to address, I
think, because the drivers ofthat are more than just
financial. But a second piece Imight add is that there's a lot
of opportunity here that I thinkhas been lost to test different
models of those financialincentives. We came upon a 2%
(21:09):
penalty and a 3% upside in termsof this particular set of
incentives, but there has beenvery little testing of what
actually works the nursing homesetting. And we could envision
ways of thinking about testinglarger downside or larger upside
risk, ways of perhaps setting afloor or even a larger upfront
(21:29):
investment for nursing homesthat historically underperform
as a way to help them besuccessful in programs like
this. I would love to see someregulatory changes like that,
that help us understand on abroader scale, what's the best
way to incentivize improvementsin care?
Rob Lott (21:44):
Great, well, that's perhaps a great spot for us to
wrap up. Really fascinatingstuff and it will be fascinating
to see if any of those potentialopportunities for further study
come up. So, doctor Burke, thankyou so much for taking the time
to chat with us today.
Robert Burke (22:04):
Thank you so much for having me.
Rob Lott (22:05):
And to our listeners, thanks for tuning in. If you
enjoyed the episode, pleaseleave a review, share it with a
friend, smash that subscribebutton, and tune in next week.
Thanks for listening. If youenjoyed today's episode, I hope
you'll tell a friend about ahealth policy.
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