HFAM & Sage Policy Group Release New Economic Report to Show Significant Value of Care in Maryland

Report highlights return on investment of Medicaid spending; value of quality care; and forecast for aging population and increasing number of "younger" residents in facilities

ANNAPOLIS, Md., Feb. 1, 2011 /PRNewswire-USNewswire/ -- The Health Facilities Association of Maryland (HFAM) along with Anirban Basu, chairman and CEO of the Sage Policy Group, today released a study that details the economic impact of the state's nursing home and rehabilitation center provider community, including the value of facilities' employment, strong livable wages, and income generated.

"At a time when every taxpayer-funded Medicaid dollar is being stretched and must be justified, it is important to recognize the outstanding quality care and value provided to Marylanders most in need receiving skilled nursing care," said Joseph DeMattos, HFAM president. "Nursing and rehabilitative centers are doing an incredible job of helping tens of thousands of Marylanders return home after illness and injury. At a time when thousands of people are losing jobs, these facilities are hiring."  

The report finds that skilled nursing facilities directly employ approximately 36,000 employees in Maryland with an annual payroll of $1.5 billion generating an estimated $68 million in annual state income tax revenue and $46 million in local government tax revenue. The average wage of a nursing and rehabilitative center employee is $41,000.

"Our study shows that skilled nursing facilities in Maryland offer high quality, low cost services for the unique populations they serve, as well as their substantial economic contributions and significant cost savings to Maryland taxpayers," said Anirban Basu, chairman and CEO of Sage Policy. "In the current budget environment, Maryland lawmakers may be tempted to shrink the Medicaid budget for long-term care; however, our research shows that would cost the citizens of Maryland dearly in terms of reduced quality of care for many of Maryland's most poor and vulnerable residents, diminished savings in those categories in which skilled nursing facilities provide high quality care at significantly lower costs than hospitals, and result in reduced employment in facilities."

Basu also noted that further cuts to long-term care Medicaid could diminish capacity that will be needed to accommodate the growing demand for efficient and effective skilled nursing care among older and younger Marylanders alike.

"For years, I have worked on behalf of my constituents to ensure their well-being, safety and opportunities to enjoy strong, fulfilling lives," said Delegate Hattie Harrison of Baltimore City. "After spending several weeks as a resident of a nursing home, I can tell you first hand that the hard-working people working in these facilities are providing exceptional quality of care. They earn every dollar of their wages and frankly, deserve even more compensation for a tremendously difficult job. They are proud of their roles in helping people regain good health and dedicated to helping us return home when possible." Delegate Harrison recently completed a short-term stay at FutureCare Canton Harbor following an illness.

The report also notes the faces of nursing home patients have drastically changed through the years. Historically, skilled nursing facilities have been viewed as places devoted to the long-term care of older adults requiring moderate levels of ongoing medical care and assistance with the activities of daily living. While long-term care for the elderly continues to represent an important aspect of the work, today these facilities provide a much wider range of services to a much sicker, increasingly diverse and youthful patient population.

"At one point not too long ago, I was near death lying in a hospital bed in Shock Trauma," said Stevie Barnett, a 50-year-old, 29-year veteran of the Anne Arundel County Fire Department who was diagnosed with a near-fatal, flesh-eating disease last summer. "I am extremely grateful for the outstanding care I have received at Genesis Health Care's Severna Park Center. With a few more weeks of intensive physical therapy and medical treatment, I am hoping I can return home and possibly get back to work."

Stevie, a Glen Burnie resident, represents one of the fastest growing populations of nursing and rehabilitation centers – the under-65-year-old age group with serious illness or trauma injuries that grew by 26 percent from 2001-2008.

Not only has the average patient age changed, so has the level of care among patients. Advances in medical care and technology along with the growing cost pressures are constantly

changing the manner by which the healthcare industry provides medical services. These same forces have transformed many procedures from ones requiring lengthy hospitalization to ones requiring much shorter hospital stays, referrals to skilled nursing facilities, or only outpatient services.

Accordingly, expensive hospital stays have been dramatically reduced, increasing demand for the capabilities of less expensive skilled nursing facilities. For instance, in the past, respiratory therapy requiring the use of a ventilator would necessitate hospitalization. Today, skilled nursing facilities can often provide respiratory therapy and other services at much lower costs.

A particularly revealing example of the relative cost effectiveness of skilled nursing facilities in comparison to hospital-based care is the provision of care to ventilator dependent inpatients. An analysis of Medicaid payments made in FY 2003 for this patient service in hospitals cost an average of $1,110 per patient day. The same services would have cost $550 per patient day in a skilled nursing facility.

"Skilled nursing facilities can provide high quality ventilator care at nearly half of the cost of hospitals," said Lorraine Bertuola, director of Clinical Services - Respiratory for Genesis Rehab Services/Respiratory Health Services.  "Each year, we are seeing more and more patients who traditionally would have been cared for in a hospital setting for vent care in our skilled nursing facilities. Working together with physical, occupational and speech therapy, we can help these patients regain their strength and hopefully return home to their community, while also saving significant taxpayer dollars."

Due largely to technology, but also to the pressures upon Medicaid and the social mandate to contain healthcare costs, skilled nursing facilities are increasingly called upon to provide services such as kidney dialysis, intensive physical and occupational therapy or onsite pharmacy or laboratory services that also have traditionally been the province of hospitals. Rehabilitation services for patients who need inpatient care, but will be discharged after a relatively short stay are also a core competency of nursing facilities. These services are among the many contributions made by Maryland's skilled nursing facilities that are increasingly able to provide high quality, lower cost alternatives to traditional hospital-based care.

Nursing and rehabilitative centers can be found in all 23 counties and Baltimore City. In some communities, facilities are one of the largest employers. They are critical to the continuum of care of Marylanders.

"Since 1946, our family has provided outstanding care for families in our community, as well as employing hundreds of local residents," said Administrator Tamara Geiwitz of Long View Nursing Home in Manchester, Carroll County. Long View is a family-owned, independent nursing home and one of the oldest in the state. "Our staff is incredibly dedicated and because of that we have relatively low turnover. We are proud to have served Carroll County families for generations."

The report is available at: http://www.hfam.org/wp-content/uploads/Future-of-HC-013111.pdf.

Fast facts are available at: http://www.hfam.org/wp-content/uploads/Fast-Facts-013111.pdf.

Press Release: http://www.hfam.org/wp-content/uploads/Sage-Conference-PR.pdf.

Health Facilities Association of Maryland is a voluntary provider community association, chartered in 1948 as the Maryland Nursing Home Association.  It is the oldest and largest long-term care association representing skilled nursing, sub-acute facilities, and assisted living programs in Maryland.  HFAM has 150 member organizations, including non-profits, serving more than 19,000 Maryland consumers in need of long-term care each year.  HFAM member organizations employ nearly 20,000 people in Maryland.

SOURCE The Health Facilities Association of Maryland