Annie Monroe got in a quick workout at the FutureCare Irvington nursing home on a recent afternoon. But the 87-year-old great-grandmother doesn't live there.
She was sent by a hospital in December for rehabilitation after suffering an infection. While the nursing home counts her as filling one of 40 rehab beds at the wooded campus outside of Catonsville, her home is in Baltimore.
Monroe represents a trend in health care in Maryland, and across the country, to ensure that as much care as possible is administered outside of costly hospital wards. State officials now want to codify relationships between hospitals and nursing homes, doctors' offices and other public and private facilities to reduce hospitals stays, cut costs and keep patients well.
Gov. Martin O'Malley has asked the legislature to approve spending at least $30 million a year to help hospitals form the partnerships, which would then reduce health care costs. For example, the state spending would pay for information technology systems that can help doctors and others communicate and share medical records, making the coordination of patient treatment more efficient.
The agreements also would encourage doctors and caregivers treating people to remind them to take medications and go to follow-up doctor visits, formalizing a team effort designed prevent return trips to the hospital. In a case like Monroe's, health care providers work together to move patients to skilled nursing and rehabilitation centers to shorten hospital stays.
"This is an excellent place to come get well," Monroe said. Then, after rounding the room with assistance, she declared: "I'm going home."
Scott Hanel, Irvington's administrator, said he already has informal relationships with hospitals throughout Maryland and surrounding states that send to his facility patients of all ages recovering from hip replacements, gunshot wounds, strokes and other maladies.
"It's important that we build the community infrastructure to provide care for the people of Maryland," said Carmela Coyle, president and CEO of the Maryland Hospital Association. "The money in the budget will give us the opportunity to start building a community network."
The federal Affordable Care Act includes incentives for hospitals to reduce expensive admissions and re-admissions while bolstering preventive care and reducing costs. Maryland has one of the highest per-capita rates of hospital admissions, though that has been ticking down in recent years.
There is urgency in Maryland to further reduce admissions because of the unique way hospitals in the state are paid.
Maryland is the only state to have a waiver from set Medicare rates. Under the agreement with federal officials, which was recently updated, the state pays hospitals the same amount private insurers and individuals are charged for a particular service or procedure.
The old fee-for-service system encouraged more admissions because hospitals made more money. But the waiver has been updated to reflect a new focus on preventive care and reducing overnight stays. That not only puts the pressure on hospitals to cut costs, but also alters the way patients are treated, John Colmers, a Johns Hopkins executive who played a large role in updating the waiver, said.
Colmers said making state funding available, as proposed by O'Malley, a Democrat, should spur partnerships linking hospitals with skilled nursing and rehabilitation centers, physician practices, surgery centers, community health centers and public health agencies.
The state budget proposal includes $30 million in the fiscal year that begins July 1 and proposes spending $40 million in subsequent years to pay for the partnerships, by funding the development of new protocols, IT infrastructure and communications systems. The money comes from a tax the hospitals were already paying.
"We want great ideas," Colmers said. "We have no idea what they are. We're encouraging people to come forward with innovative ideas to make the waiver a success."
Many existing partnerships are informal, said Joseph DeMattos Jr., CEO of Health Facilities Association of Maryland, which represents many of the state's skilled nursing and rehabilitation centers.
Nursing homes used to care only for the very infirm who lived out their lives there. But many have built wings for short-term stays, hiring doctors and providing sophisticated medical care, DeMattos said. He said that makes the centers well-suited to treat more hospital patients.
The association estimates health care costs charged by nursing homes and rehab centers are one-third to one-half of what hospitals charge. The nursing and rehab centers, DeMattos said, are essentially hospitals without emergency or operating rooms.
"The budget provision has the potential to accelerate the partnerships and innovation already occurring in Maryland," DeMattos said, adding that formal partnerships would make it the explicit responsibility of nursing and rehab centers to cut hospital stays. "This is good for everybody."
With state funding available, physicians practices also will seek to form partnerships with hospitals, specifically to better manage chronic conditions such as heart disease and diabetes, said Gene M. Ransom III, CEO of MedChi, the state medical society.
"Start-up costs make some partnerships not viable," said Ransom, particularly when new technology is needed to share patient records. Most hospitals now have electronic records, but that is less common in physician offices.
"If we can move people to the appropriate settings, and there is less cost to the system, that's exactly what we should be going for," he said.
But Ransom said he's concerned about ensuring proper oversight of the state spending, and that there aren't enough primary care doctors to handle more responsibilities.
Some worry the state's experiments aimed at reducing health care costs could harm the financial health of hospitals, 40 percent of which are losing money. State Del. Pat McDonough, a Baltimore and Harford Republican, said he fears hospitals will begin "rationing" tests and procedures. He backs the partnerships as a way to develop a community network that supports hospitals.
Coyle, of the hospital association, also said she's concerned about how funding will be allocated. She wants flexibility to be able to tackle problems that arise; for instance, to be able to fund improved preventive care at a nursing home that routinely sends patients to the emergency room.
The partnership program will be overseen by the state health department and the panel that approves hospital rates, the Maryland Health Services Cost Review Commission.
"This is an unprecedented investment in community health," said Dr. Joshua Sharfstein, the state's health secretary. "This initiative will support local partnerships to improve health, lower costs, and succeed under our new Medicare waiver."