Paradigm shift: Jerry Rhoads, CEO Caregiver Management Systems, believes long-term care should focus on outcomes

January 1, 2007
Tracey Walker
Tracey Walker

She is senior editor of Managed Healthcare Executive.

Jerry Rhoads, CEO, Caregiver Management Systems, believes the long-term-care aspect of the U.S. healthcare system is woefully lacking and in desperate need of a major paradigm shift-which is what he and his company have been attempting to do for the past 15 years.

"Real-estate moguls originally organized nursing-home infrastructures to be like those of a hospital," Rhoads says. "They didn't design the layout nor the workflow to meet the holistic restorative needs of an aging population-that is, they pretty much saw the business as custodial with medication passes and shots. This is termed 'warehousing,' but it should be what I call 'care-housing.' This paradigm still exists in 95% of nursing homes and in most assisted-living facilities. The concept is to 'keep them clean and dry until they die'-a concept that has obviously outlived its usefulness, to say the least."

A. First, the term 'quality of care' in nursing homes must be defined. The regulators have defined excellence as the avoidance of 11 mistakes facilities make, and assume that if nursing homes are not making these mistakes more than the average nursing home makes them, then quality exists. In reality, however, a more effective definition of quality relates to serving the patients' holistic and functional needs: physical, emotional, social and spiritual functioning.

Patients' needs generally are not being met in the current paradigm because the regulators have not properly defined quality, nor devised a reimbursement system to clearly pay for the pursuit of quality-of-life outcomes. Rather, the system is designed to pay room and board and an average amount for whatever else the facility chooses to do-in other words, the provider is paid regardless of effective quality standards. Also, in most cases, the providers' current information systems do not lead them to the right conclusions and they underbill Medicare for restorative care and overbill Medicaid for medical care. This is a tactical error on the part of the provider because patients have paid for the Medicare insurance and aren't getting the appropriate coverage-then they get transferred to a Medicaid status and still don't get what they need.

Our management system organizes care around what the government is required to pay for, then makes sure it all gets billed correctly. Our system sets up assignments for the staff so they are more efficient and effective, which reduces cost per case. All of this focus results in a better quality of life for the patients, and it also provides $300,000 to $500,000 more in Medicare resources per year to the provider while saving Medicaid at least one-third that amount.

Q. What are deductive-restorative services? Do all reputable facilities offer customized patient-treatment programs? Describe the team concept and how it contributes to better care at a lower cost.

A. The typical nursing department has care plans to fulfill a regulatory requirement but do not use them to direct, document and justify the bill for care. Their approach is inductive in nature since they do not pursue outcomes-rather, they pursue treatment.