The downstream financial effects of a nursing home practice on an academic medical center

OBJECTIVE: To determine the financial impact of a nursing home practice on an academic medical center. DESIGN: Retrospective cohort design. SETTING: Middle-sized Midwestern community with fee-for-service Medicare population. SAMPLE: One hundred seventy-six nursing home residents followed by faculty and residents of a medical school department of family and community medicine. MEASUREMENTS: Billings and collections for professional and hospital services delivered by the academic medical center during fiscal year 1998. RESULTS: One hundred forty-four patient-years of service resulted in over 1 million dollars in billed charges. For every 1 dollar billed by family medicine, consulting physicians billed 2 dollars and the hospital billed 10 dollars. This amounted to over 4000 dollars per patient per year in reimbursement. This practice generated a wide variety of clinical problems (37 different diagnosis-related groups (DRGs) for the 61 admissions to the hospital). CONCLUSIONS: There is a significant downstream financial effect of a nursing home practice on an academic health center. For this and other reasons, this practice may be worthy of institutional support.