Should hospitals be part of the solution?

By Andy Lazris, MD

December 14, 2014

This blog first appeared in Dr. Lazris is a primary care, geriatric physician practicing in Columbia, MD. He previously commented on last week’s RightCare Weekly question that asked whether hospitals are playing a significant role in advancing good health in our communities.


 Recently someone shared with me an article, An Amazing Healthcare Revolution is Happening in Maryland, written by Brett Logiurato in Business Insider. The revolution, it seems, is triggered by changes in hospitals that are encouraging fewer admissions and better communication. Under Maryland’s Total Payment Revenue Budget Cap, Maryland hospitals are capitated by Medicare; they earn just as much if they do not admit patients than if they do.

Thus, they have tremendous incentive to keep people out of their doors, where treatment for the elderly is more expensive and more perilous than home treatment. It seems that a hospital in western Maryland, which the article highlights, has reduced hospitalization rates, although there is less evidence that it has fundamentally altered the ability of patients to be treated at home.

From my perch as a primary care doctor in central Maryland, I have seen no such progress. Older people are flocking to hospitals no less frequently than before, especially those who live in long term care where hospitalization is even more detrimental (as I discuss at length in my book, Curing Medicare).  Hospitals have adapted no programs to effectively reduce hospitalizations, which would need to include financial incentives to allow patients to be treated at home, something that Medicare not only fails to provide but actually discourages. Nor have hospitals talked to people like me, who take care of hundreds of the very elderly they purport to want to keep out of the hospital. In fact, from all I can see, it is business as usual for our hospitals.

In my previous blogs on, I have discussed the very intriguing report, Dying in America that elucidates what many of us have known for years: Too many resources are being exhausted to provide futile care at the end of life within the walls of hospitals rather than in helping people to die and be treated in more palliative ways at home.  In fact, 25 percent of Medicare’s budget is exhausted in feckless end-of-life care, and the majority of elderly spend time in the hospital, at great financial cost and personal discomfort in their final months of their lives.

In today’s Washington Post,  Peter Whoriskey discusses the report, quoting doctors such as Atul Gawande, whose best-selling book Being Mortal explores the human and financial cost of aggressive care that is thrust at elderly patients unnecessarily, but which is financially rewarded by our current reimbursement system and deemed by such patients (and their families) as being good care.

In my book, I discuss similar topics, showing how the perception of what constitutes thorough care in the elderly is completely erroneous and harmful. Medicare pays for “thorough” care by financing tests, procedures, specialization, and hospitalization, but does not pay for home care, palliative care, and much more proven treatments, such as day care for those with dementia and exercise programs for all elderly.

I point out that patients are rewarded financially by being hospitalized. Most patients, and their families, prefer to be treated at home in a palliative way, but they simply cannot afford this approach under Medicare’s payment system. For doctors, it is far easier to hospitalize patients than to spend hours making calls and filling out papers (all without reimbursement) to help patients stay at home. All this is worse for long term care facilities that have to contend with regulations, potential law suits, increased staffing, and often angry family members when they try to treat people in the facility. Families do not have to pay more to get extra custodial care, and facilities are financially rewarded when they send people to the hospital. None of this has been altered in any meaningful way under Medicare’s reforms or the initiatives of the ACA. Often, in fact, incentives for hospitalization are increased.

Hospitalization may be dangerous for patients, it may be bankrupting the system, but it is still encouraged on every level.

The Total Payment Revenue Budget Cap gives hospitals power and incentive to use Medicare’s money to help people be treated at home.  But that is not happening, at least not in my world. Why is that?  Because hospitals still get paid well under the status quo. Taking another path may prove financially perilous in the long run, especially in our fickle political landscape.

The true flaw of this proposed model is that hospitals are given the power to impact change in our dysfunctional system, a system that is not working primarily because of the hospitals themselves. When primary care doctors, patient advocates, and long term care facilities are not directly involved in the reform process, then clearly meaningful reform will not occur.

There is no amazing health care revolution occurring in Maryland or elsewhere. A real revolution–and one very easy to implement–will occur when patients are given a financially viable option of being treated at home, rather than in a hospital. That decision should not involve any intervention by the hospital itself, but rather by a collaboration between a patient/patient family with his or her doctor.

Involve practicing primary care doctors in the discussion, transfer the decision making and financial power away from hospitals and to patients, and the revolution will begin. It’s really not more complicated than that.