Fewer Transfers = More Profit ?

Fewer Transfers = More Profit ?

Fewer Transfers = More Profit ? 150 150 Lauren Ellerman

I recently wrote in our medical malpractice blog about how the focus on profitability in long-term acute care hospitals may affect discharge dates for patients.  Long-term acute care hospitals may be the step just before long-term care and skilled nursing facilities, so I have included that content below:

Most of us take for granted that we and the ones we love would only be discharged from a hospital when we are actually medically ready to be discharged.  A recent report by the Wall Street Journal suggests that at least part of the equation for some hospitals is maximizing profitability.

Long-term acute care facilities operate based on significant Medicare payments, and those payments are tied to the duration of patients’ hospitalizations.  The Wall Street Journal article highlights that Medicare payments “max out” after a certain length of stay, after which profitability on the stay declines.  Kindred Healthcare Inc. owns several such hospitals and is one of the companies whose patient discharges seem to cluster around the point of maximum profitability.


The article does not mention analysis of statistics related to any of Virginia’s long-term acute care facilities (Centra Specialty Hospital, Hampton Roads Specialty Hospital, Hospital for Extended Recovery, and Lake Taylor Transitional Care).  It does, however, quote past hospital executives who witnessed firsthand the compensation incentives associated with discharging patients at the time of most profitability for the companies, although they deny they would ever do anything to put a patient at risk.  But perhaps it goes without saying that measures that increase profit can also carry risk.

In the skilled nursing and long-term care setting, another potential problem with profitability emerges related to transfers out of nursing homes for more acute care needs.  If beds are not occupied, the facility is not paid.  So when patients should be transferred for more urgent health needs, for instance to an emergency department, facilities may be reluctant to do so because that would leave a bed empty.  I have not yet seen an analysis of this phenomenon, but it represents another way profits can seep into decisions about patient care.

About the author

Lauren Ellerman

In 2011, Lauren Ellerman was named "Young Lawyer of the Year" by the Roanoke Bar Association for her work in the community. To speak with Lauren about your personal injury case, contact her at lellerman@frithlawfirm.com.

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