To Curb Spending On Elderly, Hospitals Try New Business Models
Believe it or not, there is a silver lining聽to the massive storm cloud that is Medicare鈥檚 spiraling health care costs.
The storm cloud, of course, is the out-of-control spending on health care聽for the elderly. For instance, more than of all federal spending goes toward Medicare. Two thirds of that spending goes to the sickest 20 percent of Medicare beneficiaries, the ones with multiple chronic health conditions.

But the silver lining is that the problem’s gravity is inspiring many doctors, researchers and hospital administrators to conjure outside-the-box business models that could rein in these costs.
One of the people brainstorming聽ideas is聽, a geriatrician and health researcher at Johns Hopkins University. In a study published today in the medical journal , Leff writes about how he worked with a handful of organizations across the country — ranging from a stand-alone hospital to a health care system with multiple nursing and hospice facilities — to implement six models of caring for seniors that have been shown to lower costs and improve care.
Leff and his team of researchers provided the hospitals with training to implement the models and then let them choose which ones they wanted to try. The different models ranged from a program that helps seniors maintain functional independence after discharge from a hospital聽to another that provides a 鈥渢ransition coach鈥 to help seniors move from hospital to home.
One of the distinctive aspects of Leff鈥檚 study is that the health care providers used multiple cost-reduction models. something he said that is聽 not often done.聽鈥淚f you can start to put these things together, they present some economies of scale,” Leff said.聽 “It becomes greater than the sum of its parts.鈥
A model called聽, or NICHE, was a clear favorite among the hospitals participating in the study, Leff said. Under that model, nurses are given more responsibility and training to watch out for things that commonly lead to complications among seniors, such as catheter infections or delirium, he explained.
Another model, called聽, was a clear loser in Leff鈥檚 study — few hospitals even attempted it. Under this approach, which Leff helped develop, seniors receive acute care in their homes, rather than at a medical facility.聽The approach聽has been shown to reduce costs and lead to better patient outcomes. But, he said, Medicare won鈥檛 pay hospitals for delivering such care.
鈥淩ight now hospitals make money by filling beds,鈥 Leff said. 鈥淚f I go to hospital president and say, 鈥業鈥檒l do a patient鈥檚 care at home,鈥 Medicare doesn鈥檛 pay for that. It鈥檚 hard for them to give up revenue in that way.鈥