MedicalResearch.com Interview with: Yan S. Kim, MD PhD Delivery Science Fellow Division of Research Kaiser Permanente Northern California Oakland, CA 94612 Medical Research: What is the background for this study? What are the main findings? Dr. Kim: Long-term care hospitals first emerged in the 1980s as an alternative to lengthy acute-care hospital stays for patients with complex medical problems who need prolonged hospital-level care.  In 2002, Medicare changed its payment method for these facilities from cost-based to a lump sum per admission based on the diagnosis.  Under this system, which is still in place, Medicare pays these hospitals a higher rate for patients who stay a minimum number of days based on the patient's condition.  Shorter stays are paid much less and longer stays do not necessary generate higher reimbursements. Using Medicare data, we analyzed a national sample of patients who required prolonged mechanical ventilation – the most common, and among the most costly, conditions for patients in long-term care hospitals – to examine whether this payment policy has created incentives to base discharge decisions on payments.  We found that in the years after the policy’s implementation there was a substantial spike in the percentage of discharges on and immediately after the minimum-stay threshold was met, while very few patients were discharged before the threshold. By contrast, prior to 2002, discharges were evenly distributed around the day that later became the short-stay threshold.  These findings confirm that the current payment policy has created unintended incentives for long-term care hospitals to base the timing of patient discharges on payments and highlight how responsive these hospitals are to payment incentives. (more…)