Posts Tagged ‘post-acute care’

The Cost of Care

Raw Cost of Care

The chart below shows the average monthly cost of care for skilled nursing (nursing home), memory care (dementia), assisted living and independent living facilities in the Baltimore/Washington region for 2015.    It also shows the cost for 24 hour / 7 day a week home health aide care and 24/7 home health aide care supplemented by 7 hours each week of registered nursing (RN) and licensed practical nursing (LPN) care in an attempt to replicate the level of care an individual might receive in an assisted living or skilled nursing facility.  cost-of-care

The monthly cost in 2015 of facility-based care in the Baltimore/Washington region ranges from $2,912 in an independent living facility to $5,659 in a one bedroom unit in an assisted living facility to $6,234 in a memory care facility, and $9,990 to $11,270 for care in a skilled nursing facility (nursing home) in either a semi-private or private room.   For a resident needing assistance with three or more activities of daily living (bathing, transferring, etc.), or with any significant degree of dementia, an independently living facility would probably not provide adequate care without supplemental home healthcare, so the effective range for the monthly cost of care for a senior needing a moderate to significant level of assistance in a specialized seniors housing and care facility in the Baltimore/Washington region in 2015 was $5,659 to $11,270.

To see description of the various types of senior housing and care facilities see my page Senior Housing Options http://wp.me/P64zBK-w.

Home health aides cost $21.73 per hour in 2015, and would cost $14,603 monthly if provided on a 24/7 basis assuming no differential for night shifts.   A licensed practical nurse was $53.94 per hour and a registered nursing was $77.88 per hour.   In the above example, I assumed an hour a day of both LPN and RN care in addition to 24/7 home health aide care to estimate the monthly cost of care equivalent to that delivered in a skilled nursing facility to be approximately $18,294 per month.   Many families care for seniors with a combination of care by family members supplemented with limited time by home health aides or other paid caregivers.   While this type of arrangement can result in lower cost than facility-based care, it is clear that the cost to provide 24/7 aid and nursing care at home far exceeds the cost of obtaining such care in an assisted living, memory care or skilled nursing facility.    Even when less than 24/7 paid care is provided the cost of facility-based vs. home care is often closer than families expect once the cost of utilies,  home upkeep and forgone rent or sales proceeds are considered.

The other big advantage to facility-based care over 24/7 home care, even if you can afford it, that I believe many families overlook, is socialization.   Seniors being treated at home, even by the most dedicated family caregivers and aides, spend a lot of time isolated from human interaction.   At well-run senior housing and care facilities, interaction among the residents and between residents a diverse group of staff provide more interpersonal and intellectual interaction and stimulation than can be achieved at home, which can be very important for a seniors’ mental health and emotional well being.

Planning For The Future Cost of Care

If the raw cost of care and learning that the government will not help you pay for it (See prior post “The Government Will Not Pay For You Long Term Care”) are not sobering enough, seniors and families trying to plan for long term care need to understand the probability of needing such care, the likely duration of such care, and its future cost.   I hope to explore these issues more fully in a future post on long term care insurance and other financing options.  But to illustrate the future cost of care for planning purposes here, I have assumed an average length of stay (LOS) for skilled nursing and assisted living  care of 24 month, 36 months in memory care and 39 months in independent living.  I have then assumed 2.5% inflation for 35 years because the average entry age in to an assisted living or skilled nursing facility is about 85 and the time many people start seriously considering long term care insurance is age 50.

future-cost-of-care

In the table above, the average monthly costs for 2015 in the Baltimore/Washington Region are mutiplied by an assumed LOS in months to get the cost for an expected episode of care.    The future value of this expected episode of care is then calculated for 2050 assuming you are thinking about this today at age 50 and planning for costs when you are 85 and are more likely to enter an assisted living or skilled nursing facility.   The LOS assumed above are averages and at two years probably a bit high for long-stay custodial skilled nursing care.  The average LOS are about right for assisted living and independent living based on actual turnover rates in buildings today.    I did not find good data on memory care facility LOS but it is widely recognized to be higher than assisted living because some residents enter at younger ages with early onset Alzheimers and are in better physical condition.   When planning for an individual’s need to finance long term care it may be appropriate to plan for longer or shorter lengths of stays and look at the probabities of  these  but I believe  these averages are useful to illustrate the order of magnitude of possible future long term care costs.

I assume 2.5% inflation to estimate the future cost of long term care.   The 2.5% inflation factor is about where costs have been increasing in recent years but with increasing wage pressure and inflation expectations higher now that Donald Trump is President-elect, other higher inflation assumptions may be appropriate.

The bottom line is that a 50 year old today might reasonably plan for between $300,000 and $600,000 of long term care costs (an average of $516,483 for AL through private room skilled nursing) and expected to spend this amount over a two – three year period beginning around 2050.

Technical Notes

New York Life, which is a long term care insurance provider affiliated with AARP, has an online cost of care calculator that is updated annually.   New York Life’s 2015 Cost of Care Survey was designed and implemented by Long-Term Care Group (LTCG), the nation’s leader in long-term care administration services. Each year LTCG surveys thousands of Skilled Nursing Home, Home Health Care and Assisted Living Facility providers to collect cost of care data. The cost of care averages are calculated from over 30,000 different providers at the national, state and metropolitan statistical area level.   Other cost of care calculators, including one from Genworth Financial, are also available online.

The figures above are for the Washington / Baltimore Region and are somewhat higher than the national average.   I supplemented and verified the LTCG survey data with information from the National Investment Center for the Seniors Housing and Care Industry’s NIC-MAP database, which surveys seniors housing and nursing care properties on a quarterly basis (see http://www.nic.org).   I used NIC-MAP data for the Baltimore region, which shows the cost for skilled nursing facility care and care in an assisted living facility 7% – 8% lower than the LTCG survey but similar enough to confirm the LTCG survey data.    NIC-MAP is also able to provide pricing data for independent living and memory care / dementia facilities, which I incorporated in my analysis.

 

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Layman’s Guide To Post Acute Care

I had a conversation with a friend today who has a relative that is comatose after a surgical procedure.   The patient has recently been shifted from a feeding tube though the nose to one connected to the stomach and is about to be transitioned from oxygen through a breathing tube to a ventilator connected directly to the throat via a tracheotomy.   This progression is typical for someone who is unable to eat or breath on their own because temporary breathing and feeding tubes over time begin irritate the throat and must be replaced with more direct connections.     Once these more permanent breathing and feeding connections are completed, the patient will likely be transitioned from an ICU to a transitional care unit within the hospital and then the hospital and Medicare or a private insurer will likely soon want the patient relocated to from the hospital, which is designed to provide short-term acute care.

While hospital discharge planners or social workers and the patient’s health insurance provider may all have suggestions or recommendations or preferences about where the patient’s post-acute care should be provided, under Medicare and some types of private health insurance the family will have a choice about where post-acute care is provided.    This short guide summarizes the options to help you achieve the best result for a loved-one at a stressful time for all concerned.

Types of Facilities – There are four types of post-acute care options, which are typically stand-alone facilities but can also be co-located within a general acute care hospital in some cases.   The four types of post-acute care facilities are:

  1. Rehab Hospital, also called an IRF- Inpatient Rehabilitation Facility
  2. Long Term Acute Care Hospital, LTAC, sometimes LTACH
  3. Nursing Home, also called a SNF – Skilled Nursing Facility or in some cases a Transitional Care Facility, which is essentially a SNF located within a hospital
  4. Hospice, which can be provided in a specialized hospice facility, within a SNF or other medical facility or in someone’s home.

A Rehab Hospital or IRF is designed to provide post-acute care for patients who require and are physically able to participate in a minimum of three hours a day of physical therapy (PT), occupational therapy (OT), and/or speech therapy at least five days per week.   Requirements for IRFs call for registered nurse (RN) oversight and availability 24 hours a day and between five and seven and a half nursing hours per patient per day, while the standard for nursing homes is usually between two and a half and four nursing hours per patient per day.   IRFs are also going to have regular physician visits and supervision and extensive rehabilitation gyms and specialized rehab equipment and staff.     So IRFs generally offer a higher level of care than nursing homes but only those patients who are able to handle at least three hours of therapy per day are able to transition to a IRF.   Medicare and most private insurers will pay for IRF care for patient who needs and can tolerate relatively intense therapy following an episode of care in a general acute care hospital.

A Long Term Acute Care Hospital (LTAC) is licensed as a acute care hospital but is designed to care for patients with a 25 – 30 day average length of stay versus less than 5 days in a general acute-care hospital.   Typical LTAC patients have multiple co-morbidities, multi organ system failure, and significant loss of independence, most following a traditional hospital stay.   LTACs are designed to care for critically ill patients who require specialized, aggressive, goal-directed care over an extended recovery period.   So patients on feeding tubes, with tracheotomies and complex, difficult to treat medical conditions are well-suited for care in an LTAC provided there are expectations that the patient’s condition can improve or that their condition needs to be stabilized before stepping down to another setting offer less intense care, such as a SNF or home healthcare.  Medicare and most private insurers will pay for LTAC care for medically complex patients who need ICU level care for an extended period following an episode of care in a general acute care hospital and have some prospect for recovery or being stabilized so they can ultimately be cared for at home or in a SNF.

A Nursing Home or Skilled Nursing Facility (SNF) in most cases offers two types of care.    One is true post-acute care that includes therapy services similar to what is provided in an IRF and some may accommodate complex patients including patients with tracheotomies similar to what may be provided in an LTAC.   Some nursing homes have extensive rehab gyms and therapy staff and will have 24/7 RN care and attending physicians.  But not all nursing homes provide post-acute care services or take medically complex patients and requirements for nursing hours and physician supervision are typically lower in a SNF than an IRF or LTAC.    Nursing homes also offer longer-term nursing care, sometimes call custodial care, for patients who have health conditions that require enough nursing care to make care at home infeasible or who do not have a home or family situation that will allow care at home.    Custodial patients may staff for years and there is little expectation that they will recover and return home.    Medicare and private insurers will generally pay for a limited period of post-acute care in a SNF following an episode of care in an acute care hospital.  But the amount of time for which Medicare will fully cover SNF care is 20 days, after which a co-pay kicks in, and Medicare will not cover long-term custodial care for a patient who is not making progress toward recovery.   For patients without long term care insurance the only option for paying for long-term custodial care in a SNF is Medicaid, which generally will only cover payments after all of a patient’s own funds are exhausted.

Home Healthcare is non-facility based option that provides post-acute care for some patients.   It can deliver wound care, PT, OT and speech therapy and other types of skilled care but will not provide 24/7 patient monitoring and generally requires support from family members in order for this to be a viable option immediately following a general acute care hospital treatment.   Home healthcare often comes into the picture is to provide followup therapy or nursing care after a patient transitions from an IRF, LTAC or SNF to home but is only relatively healthy patients with supportive living situations and families are typically able to get all of their post-acute care from home healthcare.   Medicare and private insurances will pay for home healthcare but only for specific skill nursing and therapy services.

Hospice Care provided in a specialized facility, within a senior housing, nursing home or other health facility, or in one’s own home, is intended for patients who are expected to live for six months are less.    The care is design to keep the patient comfortable and free from pain and to help family member cope with a loved-ones impending death.   While most healthcare providers are reluctant to conclude that additional medical treatment will not allow a patient to get better, hospice care is a very good option once the family and their healthcare providers reach this conclusion.  Medicare and most private insurers will pay for hospice care in a variety of settings.

Deciding Where a Love-One Should Receive Post-Acute Care – Important factors to consider include: the type and level of care the patient needs, the quality and location of the facility.     The type of care that each facility offers is summarized above and you can discuss the appropriate placement with the care team at the hospital including your physicians, nurses, discharge planners and social workers who usually take primary responsibility for transitioning a patient to post-acute care.    There is a tendency to favor facilities offering the highest level of care, such as an LTAC or rehab facility over a nursing home.   However, if the patient will does not need or will not be able to tolerate the level of therapy these facilities can provide it may be better to to directly to a nursing home rather than spend a few days or a week in another type of facility and have to move the patient a second time.    Many patients will prefer home healthcare to facility-based care but it is important to be realistic about whether the physical conditions of the home and the amount of support family members can provide make this the best first post-acute care option.    Location matters because it is important for family members to visit during what may be a multiple week or month period of post-acute care and family members are more likely to visit if a facility is conveniently located.     Finally, quality can be assessed by visiting a facility, speaking with discharge planners and social workers, checking online (The Centers for Medicare and Medicaid Services (CMS) has a 5-star quality rating system that isn’t perfect but can help – https://www.medicare.gov/nursinghomecompare) and in the case of skilled nursing, check with the state Office of Aging ombudsman about any prior complaints.

It will be much easier to evaluate and find space in a facility of your choice if you start looking before your loved-one is about to be discharged.    However, if you need more time it is possible to appeal a hospital discharge and generally buy yourself one-three days if you need more time to evaluate and decide upon your best option for post-acute care (see appeals on the Medicare.gov website).
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