Hos­pi­tals turn to hous­ing as a busi­ness strat­egy to re­duce read­mis­sions and lower costs

Modern Healthcare - - FRONT PAGE - Me­lanie Evans

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.

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