By Markian Hawryluk October
4, 2019
DENVER
— One patient at Denver Health, the city’s largest safety net hospital,
occupied a bed for more than four years — a hospital record of 1,558 days.
Another
admitted for a hard-to-treat bacterial infection needed eight weeks of at-home
IV antibiotics, but had no home.
A
third, with dementia, came to the hospital after being released from the Denver
County Jail. His family refused to take him back.
In the
first half of this year alone, the hospital treated more than 100 long-term
patients. All had a medical issue that led to their initial hospitalization.
But none of the patients had a medical reason for remaining in the hospital for
most of their stay.
Legally
and morally, hospitals cannot discharge patients if they have no safe place to
go. So patients who are homeless, frail or live alone, or have unstable
housing, can occupy hospital beds for weeks or months — long after their acute
medical problem is resolved. For hospitals, it means losing money because a
patient lingering in a bed without medical problems doesn’t generate much, if
any, income. Meanwhile, acutely ill patients may wait days in the ER to be
moved to a floor because a hospital’s beds are full.
“Those
people are, for lack of a better term, stranded in our hospital,” said Dr. Sarah
Stella, a Denver Health physician.
To
address the problem, hospitals from Baltimore to St. Louis to Sacramento, Calif., are
exploring ways to help patients find a home. With recent federal policy changes
that encourage hospitals to allocate charity dollars for housing, many hospitals realize
it’s cheaper to provide a month of housing than to keep patients for a single
night.
Hospital
executives find the calculus works even if they have to build affordable
housing units themselves. It’s why Denver Health is partnering with the Denver
Housing Authority to repurpose a mothballed building on the hospital campus
into affordable senior housing, including about 15 apartments designated to
help homeless patients transition out of the hospital.
“This
is an experiment of sorts,” said Peg Burnette, the hospital’s chief financial
officer. “We might be able to help better their lives, as well as help the
financials of the hospital and help free up capacity for the patients that need
to come to see us for acute care.”
Spending
To Save Money
Denver
Health once used the shuttered 10-story building for office space but opted to
sell it to the housing authority and grant a 99-year lease on the land for a
minimal fee.
“It
really lowers the construction costs for us,” said Ismael Guerrero, Denver
Housing Authority’s executive director. “It was a great opportunity to build
additional housing in a location that’s obviously close to the hospital, close
to public transit, near the city center.”
Once
the renovation is complete in late 2021, the housing group will hire a
coordinator to assist tenants with housing-related issues, including helping
those in the transitional units find permanent housing. The hospital will
provide a case manager to help with their physical and behavioral health needs,
preparing them for life on their own. Denver Health expects most patients will
be able to move on from the transitional units within 90 days.
The hospital
will pay for the housing portion itself. That will still be far cheaper than
what the hospital currently spends.
It
costs Denver Health $2,700 a night to keep someone in the hospital. Patients
who are prime candidates for the transitional units stay on average 73 days,
for a total cost to the hospital of nearly $200,000. The hospital estimates it
would cost a fraction of that, about $10,000, to house a patient for a year
instead.
“The
hospital really is like the most expensive form of housing,” Stella said.
Growing
Interest
A recent report from the
Urban Institute found that while most hospital officials are well aware of how
poor housing affects a patient’s recovery, they were stymied about how to
address the issue.
“It’s
on the radar of almost all hospitals,” said Kathryn Reynolds, who co-authored
the report. “But it seemed like actually making investments in housing,
providing some type of financing or an investment in land or something that has
a good amount of value seems to be less widespread.”
The
report found housing investment has been more likely among hospitals with their
own health plans or other types of arrangements in which they were receiving a
fixed amount of money to care for a group of patients. Getting patients into
housing could lower their costs and increase their operating margins. Others,
particularly religiously affiliated and children’s hospitals, sought housing
solutions as part of their charitable mission.
Reynolds
said the trend is due in part to the Affordable Care Act, which requires
hospitals to perform a community needs assessment to help guide their
charitable efforts. That prompted more hospitals to consider the social needs
of their patients and pushed housing concerns up the list. Additionally, the
Internal Revenue Service clarified in 2015 that hospitals could claim housing
investments as charitable spending required under their tax-free status. And
provisions included in the 2017 tax cut bill provided significant tax savings
for investors in newly designated opportunity zones, increasing their interest
in affordable housing projects.
Some
hospitals, she said, may use their cash reserves to invest in housing projects
that generate a lower return than other investment options because it furthers
their mission, not just their profits.
In
other cases, hospital systems play a facilitator role — using their access to cheap
credit or serving as an anchor tenant in a larger development — to help get a
project off the ground.
“Housing
is not their business,” Guerrero said. “It’s not an easy space to get into if
you don’t have the experience, if you don’t have a real estate development team
in-house to understand how to put these deals together.”
Cutting
Costs
In the
southwestern corner of Colorado, Centura Health’s Mercy Regional Medical Center
has partnered with Housing Solutions for the Southwest to prioritize housing vouchers
for frequent users of the emergency room.
Under a
program funded by the Catholic Health Initiatives, Mercy hired a social worker
and a case manager to review records of frequent emergency room patients. They
quickly realized how big an issue housing was for those patients. Many had
diabetes and depended on insulin — which needs refrigeration. Kidney failure
was one of the most costly diagnoses for the hospital.
Once
patients received housing vouchers and found stable housing, though, costs
began to drop.
“We now
knew where they were. We knew that they had a safe place to live,” said Elsa
Inman, program coordinator at Mercy Regional. “We knew they would be more
effective in managing their chronic conditions.”
The
patients with stable housing were more likely to make it to their primary care
and specialist appointments, more likely to stay on top of medications and keep
their chronic conditions in check.
The
combination of intensive case management and patient engagement helped to halve
ER visits for the first 146 patients in the program, saving nearly $495,000 in
Medicaid spending in less than three years.
“Hospitals
are businesses and nonprofits are businesses,” said Brigid Korce, program
development director for Housing Solutions. “They are bottom-line, dollars-and-cents
people.”
Inman
acknowledged that the hospital might have missed out on some revenue by
reducing ER use by these patients. Hospitals are still largely paid by the
number of patients they treat and the number of services they provide.
But
most of those patients were covered by Medicaid, so reimbursements were low
anyway. And the move freed up more ER beds for patients with more critical
needs.
“We
want to be prepared for life-threatening conditions,” Inman said. “If you’ve
got most of your beds taken up by someone who can be receiving patient care
outside in the community, then that’s the right thing to do.”
That
was less of an issue for the inpatients at Denver Health. Because hospitals are
generally paid a fixed amount for a given diagnosis, the longer a patient stays
in the hospital, the more money the hospital loses.
“They’ve
basically exhausted their benefit under any plan because they don’t meet
medical necessity anymore,” Burnette said. “If they had a home, they would go
home. But they don’t, so they stay in the hospital.”
Markian
Hawryluk: MarkianH@kff.org,
@MarkianHawryluk
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