IF YOU BUILD IT, THEY WON’T COME BACK
Hospitals turn to housing as a business strategy to reduce readmissions and lower costs
Charles Sanford left a Minneapolis shelter for his own apartment in June, a move that has meant relief from the anxiety of being homeless and the joy of cooking in his own kitchen. For Hennepin County Medical Center, the Minneapolis hospital that found Sanford an apartment, the move is an unusual prescription for a troubling and costly problem: Patients who frequently return to the hospital or emergency room.
Housing stock could be healthcare’s new bricks and mortar. Complex patients who frequently seek the most expensive care have long been identified as a disproportionate source of U.S. health spending. As healthcare organizations and policymakers look for the right mix of expanded primary care, care coordination and support for these patients, some see spending money on securing them somewhere to live as a critical piece.
The Twin Cities hospital has sought housing for 14 patients since January as part of a strategy that pairs homeless patients who landed in the hospital at least three times last year with two newly hired county housing coordinators. The coordinators, who scour rentals and meet with landlords, work exclusively to find homes for medically complex Medicaid patients. “Everything happened just so fast,” said San- ford, who had been admitted to the hospital seven times in the 16 months before his move. “I’m in a shelter one week. Two weeks, three weeks later, I’m in an apartment.”
The effort and others under way are targeting the housing needs of chronically ill and costly patients in a bid to keep them out of the hospital and reduce their healthcare costs.
The initiatives come as Medicaid, the safety net health program for the nation’s poor, undergoes major policy changes that increase the potential financial losses for hospitals and private insurers when patients return to the hospital again and again.
New York in 2010 began to penalize hospitals with Medicaid patients who were readmitted shortly after leaving the hospital. Massa- chusetts did the same last year. Medicare will penalize hospitals with high readmission rates starting Oct. 1.
States continue to shift Medicaid away from paying for every hospital visit into managedcare contracts that pay a fixed amount per month for each enrollee, regardless of how many times patients visit the hospital or emergency room. Hospitals are left with a loss when patients’ care costs more than the fixed amount. Seven out of 10 Medicaid enrollees were covered by managed care in 2010 compared with 57% in 2001.
Pressure on state and federal Medicaid budgets is expected to intensify as the safety net insurer expands in 2014 under the health reform law. New eligibility rules could expand Medicaid rolls by as many as 13 million people in 2014, though the number is projected to be closer to 7 million after the U.S. Supreme Court ruled in June that states could forgo expansion without penalty.
New York officials are gambling that housing and supportive services for chronically ill patients could save Medicaid as much as $1.3 billion over five years.
The state asked the CMS in August for $375 million from Medicaid to build or renovate 3,000 apartments to house high-cost Medicaid enrollees.
Dr. Ross Wilson, corporate chief medical officer and senior vice president of the New York City Health and Hospitals Corp., said a lack of available housing frustrated efforts to find a home for high-cost Medicaid enrollees in an ambitious care-management pilot that ended in May. The pilot, funded by New York’s Health Department, targeted costly and complex Medicaid patients with care coordination and social services, including housing.
Half of patients in the three-year pilot at HHC were homeless or living in a shelter. “We do not have housing stock,” Wilson said.
Hennepin County Medical Center in Minneapolis arranged housing for diabetic patient Charles Sanford that allows him to safely take his medication and prepare his own food, both of which reduce his need to see a doctor or go to the hospital.
Elizabeth Peterson, a care coordinator at Hennepin, works to find homes for patients, which the hospital hopes will reduce costs.