On the Surface and At the Heart: The Importance of the Medicare Market Basket

Years ago, a trustee of my former organization said after a couple of years of service, “You know, on the surface this seems like a simple operation, but at the heart of it, this is very complex work, isn’t it?” How true.

The draft House of Representatives health reform bill, H.R. 3200, has a provision to eliminate the Medicare Market Basket update for nursing homes. On the surface, many “Beltway People” assume we can “absorb it.” They base that conclusion on studies that, on the surface, say there’s enough money in the long-term care system.

On the surface, many people don’t like nursing homes anyway, so there are Beltway People who seem to want to keep the pressure on us. They don’t like nursing homes until their family needs a really good one on short notice.

On the surface, many assume quality in nursing homes is bad, so let’s fine homes more and create more regulations. It was Beltway People that created a public reporting system that rates nursing homes like toasters or cafes. It seems simple enough, on the surface. In their wisdom, those “beltway rankers” make large nursing homes with complex patients look artificially worse than they really are.

On the surface, these Beltway People believe that nursing home people can’t be trusted to improve quality, so progress on quality is measured in terms of how bad we are, not how we’ve improved. Despite the fact that reputable entities like the National Commission for Quality Long-Term Care or the Advancing Excellence in America’s Nursing Homes Campaign conclude otherwise.

On the surface, some Beltway People will say Medicare is a federal program and Medicaid is a state program. Some understand the interdependence, but some don’t. So it’s easy to ignore severe Medicaid shortfalls while talking of Medicare cuts.

So, on the surface, it’s all too easy to pay nursing homes less and regulate them more.

That’s the dynamic we face. That’s what’s on the surface.

But, what’s at the heart of it?

First, the heart of nursing homes is care for vulnerable people whose families under stress. Many enter skilled nursing facilities straight from hospitals — some from ICUs, where the reimbursement is several times that of a post-acute nursing home unit. Yet, the care must be close to that of the hospital at the hour of transfer and remain at a high level for some time.

Some people’s needs are straightforward — rehab for a few weeks, then home. Some homes make a niche business of it and therefore, have profit margins. The Beltway People say their margins are too good, so all nursing homes can be cut.

However, also at the heart of nursing homes are very complex patients, with multiple chronic and delicate conditions that require higher staffing, more expensive medications and longer stays. Other “beltway experts” actually say the care for these people is under-reimbursed by Medicare. Most of these facilities are not-for-profits, who traditionally accept sicker people as part of their mission. Our sector plays an important role below the surface, and at the heart.

At the heart of it are people who deliver the care — direct care staff, therapists, nurses and doctors. The experts say the doctors are under reimbursed, and liability costs for everyone involved are out of proportion. The experts also say programs are needed to attract and retrain nursing and other direct care people. In fact, nursing home care — particularly complex care — requires more people with higher qualifications. The experts admit that most nursing home care costs pay for people who provide the care. It’s a people intense sector of health care.

So, at the heart of it, when cuts are made, people bear the brunt of those cuts. The experts know that staffing is the best known proxy for quality. Let’s help the Beltway People do the math: less reimbursement equals less staff equals lower quality.

At the heart of it is that many nursing homes must be all things to all vulnerable persons in many communities — the post-acute unit for the hospital, the Alzheimer’s programs for those who can’t stay home, the outpatient center, the place to live for those whose care needs are too complex and have no home or family, the hospice and the Meals on Wheels program for the county or community.

Often, the nursing home is the place for those who are sightless and out of sight, out of memory and out of mind. Many are people with difficult care needs: those on Medicaid, those with no insurance, even those with undocumented status. The community quietly sends the difficult people to us, especially in inner city and remote areas.

The complexity is that some segments of Medicare part A subsidize other segments of Medicare Part A, which subsidizes Medicaid which must be subsidized by self-pay, providers tax or fundraising.

On the surface, a nursing home is a nursing home is a nursing home. Some patients are profitable, so let’s cut reimbursement for all of them by cutting the market basket. So simple on the surface.

The market basket is an automatic annual two to three percent increase to cover costs of living — mostly people — who need jobs and have bills to pay. The market basket is the only stabilizing, predictable revenue stream to cover other negatives.

It’s time to do the math for Washington. We have a calculation tool that can tell you the effects of Medicare’s cuts on your nursing home. You can quantify those cuts for your legislators and translate these dollars into people to be laid off, programs to be eliminated, patients who’ll have to remain in hospitals, employee benefits to be cut, and in some cases, nursing homes that must be closed or sold.

On the surface in beltway conference rooms, it’s easy to say the “industry” can take a cut.

At the heart of it, though, you must tell your elected Beltway People that eliminating the Market Basket hurts people. Tell them before these cuts became law. Tell them NOW!

Tell them that the not-for-profits in your community are losing money and cannot afford to lose more. Ask them what they think your communities would do without your nursing home. Because we provide the care that is all too easy to misunderstand, and we are all too ready to help when a bed is needed.

That’s the heart of the matter. You’re indispensable to the heart of your community. You must tell that story.