About that hospital boom ahead ...

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John O'Connor
John O'Connor

For more than a decade, skilled care operators have been feasting on post-surgical transfers. These days, more than a few envious assisted living operators wouldn't mind snapping off a piece of that action.

But before you re-engineer your community to resemble an IC unit, hold on just a sec. Turns out that there's a huge battle heating up. To get to the knee, er, heart of the matter, many docs and health networks have different notions about where knee-replacement surgeries ought to be done.

As you might expect, many physicians want more of these procedures to take place in surgical centers, where they often have a financial stake. Health networks want to keep patients in hospitals, for the same reason.

Given the fiscal pressures ahead for Medicare – which now pays for the carving and post-acute rehab – the surgeons stand a pretty good chance of winning.

By some estimates, Medicare could trim its outlays by hundreds of millions of dollars by shifting to outpatient settings. But guess what that might do to those hoped-for hospital transfers? The short answer: The outcome won't be good for your business.

For a great backgrounder on the escalating battle, take a look at this piece by Kaiser.

But even if many of the procedures are directed away from hospitals, patients need to go somewhere to recover, right? Currently, 40% of Medicare patients spend time afterward in rehabilitation facilities. These folks presumably would be prime candidates for short-term placements in senior living communities.

But would surgeons and investors want to share post-op Medicare funds with you? It's not that they don't like you, but the answer is a resounding “no!” In fact, we already are hearing anecdotally about wobbly post-surgical patients being sent to nearby hotels for a few days.

There is also the matter of advances in surgery and monitoring to consider. Both developments presumably will make it feasible for more patients to return home within hours of being cut open.

To be sure, you can bet there will be a huge pushback from hospitals regarding these new developments. They will indignantly claim that patient care is being compromised for the sake of money. And they will, in many cases, have a point. (Yeah, I know: hospitals would never put financial incentives before optimal patient care, right?)

Truth be told, a lot of money is at stake. Already, more than 600,000 total knee replacement surgeries are performed each year. Those numbers will only escalate as boomers swell the ranks of the infirm.

How will the fight end? Who knows? But if history is any indication, it may come down to which side — surgeons or hospitals — holds more sway on Capitol Hill.

Regardless, be careful about assuming that the number of post-surgical patients coming your way is about to dramatically rise. It looks as if many might be going straight home. As for the remaining prospects? Let's just say you might not be the only operator leaving the light on for them.

John O'Connor is editorial director of McKnight's Senior Living. Email him at john.oconnor@mcknights.com.

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