Why Federal $$ for Nursing-Care IT Would Be a Good Investment

Last Updated Jan 7, 2011 6:35 PM EST

Long-term care is the stepchild of the healthcare industry. So it's not surprising that none of the $27 billion extended by the federal government for health information technology is available to nursing homes and other LTC facilities.

The unexpected consequence, though, is that if LTC doesn't keep up with hospitals and physicians in the transition to electronic health records, or EHRs, it will be nearly impossible for healthcare reform to achieve its objective of improving the coordination of care, which is essential to cost control.

According to software vendor executives quoted in a recent article, relatively few nursing homes have installed EHRs to date. Nearly all nursing homes have computer systems, but their use is mostly limited to administrative tasks such as billing and supplying the federal government with the required "minimum data sets" on their patients.

Why nursing homes aren't wired
Among the reasons that nursing home operators offer for not investing in EHRs: the systems' high cost, the uncertainty of a return on investment, the fear of purchasing a system that won't meet future regulatory requirements, comfort with manual processes and the fear of the unknown. In addition, few EHRs have been designed specifically for the long-term-care environment, and most facilities would have to customize any clinical data system they bought to suit their needs.

A few years ago, the California Healthcare Foundation conducted a study of the use of health IT in California nursing homes and residential assisted-living facilities. It discovered that there was a minimal use of clinical IT applications and that those in place were underused.

Twenty percent of long term care providers use clinical HIT applications such as assessments and progress note documentation; medication and treatment administration; care planning; electronic prescribing; and decision-support tools. Some 21 percent of nursing homes and 17 percent of [assisted living] survey responders use clinical charting applications. Medication administration applications are used by 18 percent of nursing homes and 22 percent of [assisted living] responders.


These adoption percentages aren't markedly different from those of acute-care hospitals. But, whereas many hospitals and physicians are moving toward EHR adoption, partly as a result of ARRA incentives for meaningful use, nursing homes still face a huge cost barrier to implementing these systems. ARRA authorizes a whopping $67.5 million for technology upgrades and training in LTC facilities in 2011, but it's not even clear that those modest grants will actually be dispensed.

Opportunity costs come a-knockin'
Now, let's consider how much we spend on long term care. According to the Centers for Medicare and Medicaid Services (CMS), in 2009 the U.S. spent $137 billion on healthcare in "nursing care facilities and continuing care retirement communities." The Congressional Budget Office projects that long-term care will cost $207 billion a year by 2020 and $346 billion a year by 2040. And that's just for the actual cost of caring for seniors in these facilities.

The cost of not having accurate, timely data on the health status of LTC patients will be much higher. That's because sick, elderly patients often bounce back and forth between nursing homes and hospitals. That's one reason why the government is investigating the idea of "bundled payments" that would cover the cost of a hospital stay, the attendant physician care, and 30 days of post-discharge care, which might well be in a nursing home.

Similarly, if "accountable care organizations" are going to be responsible for the cost and quality of care for Medicare patients, they'll have to monitor what's going on with those patients in nursing homes. Moreover, there will have to be close coordination between doctors caring for patients in hospitals and post-acute-care facilities.

So perhaps Congress should take another look at the health IT subsidy program and authorize some more funds for long term care. In the long run, it's a great investment in more ways than one.

Image supplied courtesy of Flickr
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  • Ken Terry

    Ken Terry, a former senior editor at Medical Economics Magazine, is the author of the book Rx For Health Care Reform.

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