The Cultural Purpose and Economic Role of Nursing Homes

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The Cultural Purpose and Economic Role of Nursing Homes

Back in the 1600s, English settlers brought the concept of the almshouses to America where they were called poorhouses. The purpose of these venues was that they serve as residential clinics in which orphans, poor senior citizens and the mentally ill would live and possibly receive care. These were wiped out by the Great Depression in the 20th century, and afterward, it became clear in the U.K. as well as in the U.S. that the Depression left a gaping hole where care for the elderly should be, and healthcare industries suffered decelerated recovery as hospitals grew overcrowded. That’s why the conventional nursing home exists: to stave off unnecessary hospitalizations and still provide care to those who need it round-the-clock.


It has since been established by healthcare experts and economists that there is a distinct correlation—a mathematical one—between nursing home staffing and avoidable hospitalizations. Jennifer Crowley heads EagleView West, an American nursing home, and Sherry Mayeaux heads another called The Springs at Whitefish. Both of them serve as co-chairs of the Kalispell Walk to End Alzheimer’s, and they co-wrote and published an article recently in which they point out, among other things, how Alzheimer’s treatment alone has its own bearing on the frequency of avoidable hospitalizations. A team of researchers from the University of Chicago and the University of Pennsylvania just published a new study in the Journal of Health Care Organization, Provision and Financing wherein they analyze the bearing of star ratings for American nursing homes on preventable hospitalizations, too. Beyond all that, the Kaiser Foundation’s healthcare news arm scoured a new data set in order to narrow down the big staffing problems for nursing homes in general.


The reason it matters is multifaceted. For one thing, healthcare is a massive sector of any developed economy; it accounts for 8.5 percent of British GDP by itself, and the U.K. has the most fiscally conservative healthcare spending of any developed economy of comparable size. For instance, it accounts for 16.4 percent of American GDP and a flat 11 percent of German GDP. On average for countries with comparable purchasing power parities, in fact, the healthcare industry is usually representative of more than a tenth of their respective economies. When an industry that large, its inefficiencies can take a heavy toll on virtually everything else. Overcrowded, understaffed hospitals yield declines in demand for insurance, among other things, so the risk market suffers; meanwhile, rates of infection increase nationwide and theoretically injure work force productivity across the board.


The Centers for Medicare & Medicaid Services created what they call the Payroll-based Journal, which is a data set used to comply with Obamacare’s mandate to make the federal nursing home rating system more accurate with regard to staffing. It was the Obama Administration’s answer to an evolving problem, which is that nursing homes are given star ratings to assess their overall and compartmentalized efficiencies or lack thereof, and nursing homes are then required by law to reach the minimal rating. That minimal rating’s purpose to serve as a threshold above which compliant nursing homes can be expected to be serving their overall purpose adequately, which is hedging against unnecessary hospitalizations. It became clear through many studies, though, that the previous rating system wasn’t accurate enough for that threshold to equate optimal results as expected, though.


The Centers for Medicare & Medicaid are finally implementing the new staffing data set they expect to uphold a superior rating system, though staffing is only one of the areas that the rating system covers obviously. The system is being revamped in stages. Staffing shortages constitute the primary cause for nursing home injuries according to Kaiser Health News’s Jordan Rau. He told The New York Times about this new data set and said, “When nursing homes are short of staff, nurses and aides scramble to deliver meals, ferry bedbound residents to the bathroom and answer calls for pain medication. Essential medical tasks such as repositioning a patient to avert bedsores can be overlooked when workers are overburdened, sometimes leading to avoidable hospitalizations.”


The team from the U of C and UPenn studied Medicare claims data from 2007 to 2010 in order to trace the correlation between these ratings and the quantity of potentially avoidable hospitalizations per month. This period covered more than a year prior to the original five-star system being implemented (December 2008) and about two years of the system in action. They found that facilities with higher ratings did show lower readmission rates, but the gradient between hospitalization rates and star ratings got smaller and smaller over time. “This aligns with expectations that the ratings are becoming less meaningful over time as a broad indicator of quality,” their paper reads. They tentatively attribute this to healthcare providers possibly “teaching to the test,” so to speak, via superficial changes that can game the system.


In Crowley’s and Mayeaux’s discourse on how and why Congress needs to support the fight against Alzheimer’s, they write that it’s critical “that Congress support the Building Our Largest Dementia (BOLD) Infrastructure for Alzheimer’s Act (S. 2076/H.R. 4256), which will create an Alzheimer’s public health infrastructure across the country to implement effective Alzheimer’s interventions, such as increasing early detection and diagnosis, reducing risk and preventing avoidable hospitalizations.



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