Healthcare Headlines Blog

Executive Summary

  • Research shows long-term acute care hospitals (LTACHs) can meaningfully participate and contribute to financial success in value-based care models
  • LTACH expertise in pulmonary care contributes to cost savings and expedited recovery for patients requiring mechanical ventilation
  • Discharging medically complex patients to Kindred Hospitals can help reduce spending, primarily through decreased readmissions

Cost-Effective Healthcare Solutions

Faced with the ever-present concern of healthcare spending, payers are continually in search of solutions with the most clinical and financial value. Medically complex patients, who comprise a small but growing percentage of the patient population, can present a particular challenge to this objective. These beneficiaries often require one or more post-acute care (PAC) providers along a recovery journey that can span a number of weeks, placing upward pressure on cost of care. To temper total expenses for these patients, payers and managed care organizations must maximize efficiency by properly aligning level of care with medical necessity.

The long-term acute care hospital (LTACH) is one PAC setting that is often inaccurately perceived as cost-prohibitive and indistinguishable from a skilled nursing facility (SNF) in terms of care. However, as acute care hospitals, LTACHs provide specialized physician-led treatment and rehabilitation that is unique and key to the recovery of medically complex patients, especially those on prolonged mechanical ventilation. By utilizing LTACHs for the appropriate patients, payers can achieve maximum efficiency and cost savings.

These ideas are supported by a number of studies, including a recently published report by ATI Advisory

The recent ATI Advisory (ATI) study reaffirmed that LTACHs can “meaningfully participate and contribute to success in value-based models” by providing specialized care to critically complex patients.

Reduced Cost and Improved Outcomes for Pulmonary Patients

Patients with severe pulmonary conditions often require costly long-term respiratory support and mechanical ventilation.

The ATI study revealed that a specialized focus on complex pulmonary patients can advance breathing independence and recovery, ultimately translating into cost reduction and improved outcomes. To demonstrate this, ATI examined spending patterns for Medicare FFS patients that discharged from a short-term acute care hospital (STACH) with DRGs 003 or 004. They did not adjust outcomes for medical complexity.

When looking at average Medicare FFS spending within the 90-day episode following the initial STACH stay, ATI found that spending was about 10-20% lower for beneficiaries discharged to a Kindred LTACH in Las Vegas than for beneficiaries discharged to a SNF nationwide for DRGs 003 and 004. Furthermore, patients who transitioned from the hospital to an LTACH discharged to home 20 days sooner than those who transitioned to a SNF.

These findings led ATI to conclude that “certain ventilator associated STACH DRGs, such as 003 and 004, are particularly well-suited for the highly specialized respiratory care provided at LTAC hospitals.”

Overall Unadjusted Average Medicare Spending (Within 90-day Episode) after Discharge from Initial Discharge
Location by Care Setting and High Volume LTACH DRGs, CY 2019

Unique Capabilities of LTACHs That Aid In Complex Care and Recovery

At an LTACH, patients benefit from daily physician oversight and interdisciplinary care from ICU/CCU-level clinicians. Patients with severe lung conditions, including those on mechanical ventilation, receive care from pulmonologists and respiratory therapists who follow established protocols for ventilator liberation.

As part of the recovery process, LTACHs ensure that patients begin mobilizing as soon as possible. Comprehensive therapy provided by PTs, RTs, OTs, and SLPs is integrated with specialized acute care to promote full recovery.

As the search continues for the most cost-effective means of providing high-quality treatment, LTACHs have consistently demonstrated an expertise in efficiently managing the care of our nation’s most clinically complex patients. In fact, ATI’s study noted that “additional savings could be accrued via value-based models that utilize LTAC hospitals for the management of high-acuity patients.”

Decreased Spending at Kindred Hospitals

Kindred Hospitals are experts in providing continued acute care to medically complex patients, as reaffirmed by the results of the ATI study. When looking at all conditions, ATI found that Medicare FFS spending after LTACH discharge was 10% less for Kindred patients than for patients at other LTACHs. This improvement was due in large part to a reduction in readmission spending, which was 17% less for Kindred patients than for those in LTACHs across the country.

These findings led ATI to conclude that “Kindred LTAC hospitals effectively managed patient needs during the initial LTAC hospital stay, likely reducing disruption to patients and improving patients’ overall care experience during their post-LTAC hospital period.”

Unadjusted Average Spending After Discharge from Initial LTACH Stay for All Conditions, CY 2019

Kindred Hospitals has provided quality care for 30 years, and continues to introduce initiatives that improve care, such as:

  • Pursuit of disease-specific certifications from The Joint Commission in Sepsis and Respiratory Failure in all hospitals.
  • Early mobility programs that incorporate mobilization as early as is safe, even for patients on ventilators, allowing for a quicker, more complete recovery.
  • Their proprietary AfterCare Program, in which specialty trained RNs follow up with patients post-discharge to discuss durable medical equipment and medication needs and education, primary care provider appointments, and any additional post-discharge services needed.

Kindred Hospitals partner with health plans to provide the highest quality of care, improve patient outcomes, and lower costs for their sickest and most vulnerable patient population. Kindred currently supports the following products:

  • Medicare Advantage
  • Commercial
  • Managed Medicaid
  • Veterans Affairs
  • Worker’s Compensation

Visit to request a conversation about how Kindred Hospitals’ level of service can help manage your critically complex patients.

By Dr. Dean French, MD, CPPS