David Grabowski, Professor of Health Care Policy, Department of Health Care Policy, Harvard Medical School

Dr. David Grabowski is among the foremost experts in the economics of aging, with a focus on long-term care and post-acute care. Dr. Grabowski has been the Principal Investigator on five research grants from the National Institute on Aging on projects related to the value of post-acute care, skilled nursing facility payment, demand for long-term care insurance, specialization in dementia care, and nonprofit provision of nursing home care. He is also a member of the Medicare Payment Advisory Commission (MedPAC).

Through the Vision Series, Dr. Grabowski shares his vision for the health care system of tomorrow, emphasizing the structural flaws of our current health care system and providing research-driven solutions for addressing them. In addition, Dr. Grabowski shares his thoughts on the financial hurdles to the next generation of aging Americans. He discusses the milestone technological innovations of today and explains how they will help us achieve a higher quality of care, eliminate barriers to treatment, and offset many of the associated costs of aging.

If you could build the landscape from the ground up, if you’re looking for a vision of what health care could be in this country, what does that look like and where do we start to make that happen for the aging population in America?

I think there are two big parts of the system that require change. One is where individuals are receiving services, and then the second part is what services they’re receiving in these settings. To take the first part of that, there’s no doubt, we’re going to see a shift coming out of this pandemic toward individuals receiving more services in their homes.

That’s not going to work for everybody, and that doesn’t mean this is the end of institutional care, but I do believe we’re going to see an increased investment in services in the home setting. That’s what individuals want; we have not done that in the past for issues around cost. I think there’s going to be more of an appetite to offer services in the community going forward and I believe we’re going to see a shift.

Now, the second part of that is that not everybody is going to be able to move from an institutional setting to a home-based setting. Then, even for individuals who do see that shift, they’re going to require a different mix of services. It’s not enough to think that the services that individuals have been receiving to date in the home setting are the services that we’re going to see into the future. I would apply that same point to the nursing home setting; those facilities in many respects need to evolve, too.

My hope and vision is that we see a different nursing home going forward. Historically, unfortunately, I don’t think we’ve seen very strong care models in a lot of nursing homes and they haven’t been very home-like. They’ve sort of failed on both parts of what their names suggest; that you’d get good nursing and a home to live in. I don’t know that we’ve done a good job on either of those fronts historically. Going forward, how do we make nursing homes more home-like?

I really like a lot of the smaller-home models, with eight to 12 older adults living together, much more resident-centered and resident-directed. Also, a lot of this comes back to the staff, and paying the staff a living wage and empowering those staff, making these better jobs. That needs to happen across the long-term care spectrum, but I think that issue is particularly pronounced in the nursing home setting. My hope is that we change the mix of services, but also the types of services that are being offered across the spectrum.

How long do you think that would realistically take to create that landscape? The landscape you described sounds great, but it’s so far from what we have on the ground.

There are some parts of this that could occur relatively quickly. With other parts we’re looking at a longer horizon. The parts that could be done in the near term include creating those additional home and community-based waiver slots. For example, putting those dollars into direct caregivers across the spectrum, paying that living wage, whether an individual works in the community or works in a nursing home.

At least from a policy perspective — I’m not saying that this Congress has the appetite to do that — they could do that very quickly. 

The other part of this vision or rebalancing I described was changing what a nursing home looks like. That’s going to be a much longer shift.

First, you’d have to get the dollars to actually rebuild all of the nursing homes around the country, or a large share of them. You’d actually have to undertake all that construction, so even if you tried to retrofit some of the existing facilities or downsize, that’s a longer time horizon. I do think, however, that this could be done in stages. The idea that we could do this rebalancing, we could do some of this investment in the short term — while recognizing that we need to continue to remodel and rework our existing capital in the nursing home sector — is really important.

I’m not one of these people who think the nursing home is dead following COVID. I would hope the nursing home as we’ve always structured it is dead, but nursing homes are going to be here after the pandemic is over. There are countries around the globe that spend a lot more than the U.S. does on long-term care. They have nursing homes; they just have much better nursing homes than we do. It looks a lot more like the vision I just described.

If you take a country like the Netherlands, they have really strong home and community-based care. They have smaller nursing homes, they have more staff in their nursing homes. That all takes money. We haven’t been willing to make that investment here in the U.S. I hope, going forward, that we begin on that path, but it is going to take well over a decade or longer.

The investment aspect is really important. How do you see that happening? Do you think we need more direct funding? How do we get to a point where we actually encourage that kind of investment?

We’re not going to get there without investment, and I hear this a lot. “Private equity is bad. For-profits are bad. We should keep for-profits out of this sector.” The last time I checked, there aren’t a lot of non-profit organizations that are lining up to invest in nursing homes. Most government-owned facilities have actually become private-owned over the last 20 to 30 years. There’s not a lot happening on either the government or non-profit side.

Now, some people could say, “Wow, we could increase [government investment],” but that’s not going to get us to a place where I think we all want to be in terms of funding. We’re always going to need this private investment to really grow the sector. We’ve just had this problem where we haven’t had the right balance of funding and oversight. It’s been really hard to trace out where the dollars are actually going. I love the idea of encouraging this private investment, but also, requiring a lot of oversight.

I think it’s troubling that some of these private equity groups have entered so quickly, and obviously, have a lot of related party dealings that make it really challenging to follow the money, basically. I don’t think that’s asking too much. We’re largely paying for nursing services through public dollars.

We put a lot of relief funds into nursing homes during the pandemic, for example, and we’re going to continue to put dollars in there. Beyond all of this, and probably most importantly, you have frail, older adults living there. On the other side, you have caregivers that we also want to support and protect and make certain that they’re receiving a living wage. Tracing these dollars and following the money basically is really important.

We need a lot more transparency and accountability going forward.

What are some things you’ve seen in your research that nursing homes don’t do well but they could do better now, without having to wait?

There are a few good opportunities. One thing we haven’t talked about is the health needs of long-stay nursing home residents, and the amount of medical care that they require. Nursing homes, oftentimes, are fairly disconnected from the clinical care that these individuals need. I’m not necessarily blaming nursing homes for that, but in a lot of ways, physicians have been missing in action in nursing homes.

Physicians often are paid to provide that care. This is one of the places where there’s a real disconnect between Medicare and Medicaid, but I believe there are opportunities right now for nursing homes to try to think about alternative payment models that might bring some of those clinical dollars into the facilities.

One area that was gaining some traction prior to the pandemic were Institutional Special Needs Plans, or I-SNPs, as a way for nursing homes to actually get rewarded for having those clinicians on site. If you can get your residents enrolled in the model, as a nursing home, you can actually get higher rates for having those residents get their skilled care onsite and avoid those transitions down the street to the hospital or the ED.

That’s a plan where [without major resources] actually, at least in the short-term, it can help pay for itself. Obviously, if you don’t have a lot of resources, you’re not going to be able to shift to a small-home model or hire a lot more staff or pay them a lot more in the short term, [but] I do think there are ways to encourage greater clinical services in the short term that could actually really benefit the residents.

When it comes to technology, that’s something that the pandemic really, really, really accelerated, at least in terms of temporarily getting rid of some of the guardrails around telehealth, particularly in nursing homes. There’s a lot of excitement around it. Is there anything that you see out there in terms of tech advancements that you think are really exciting? 

I think there’s a lot of potential here. I did a study five or so years ago, where we evaluated an off-hour telemedicine intervention here in Massachusetts, and we found really promising results. This was a nursing home chain that invested in the technology and allowed us to work with them to randomize it across their buildings.

We found, not surprisingly and although really reassuringly, that having telemedicine there in these buildings — when a change in condition occurred on an adverse event, they called out to the telemedicine service — that was found to prevent transfers to the hospital, and we were really excited about that finding.

It was with mixed feelings about the study because we found this great result, we were out talking about it, and the media really pumped up what we had found. Meanwhile, the nursing home decided to discontinue the program because they were paying for the technology, but the savings from fewer hospitalizations was going to Medicare.

I think that was an example that we had this disconnect, and we weren’t encouraging that kind of investment. I am very excited about the opportunities of telemedicine to fill that gap. Where I’m a little worried, this is about opening the floodgates here, and whenever we do this, it’s about: How do we encourage those high-value telemedicine services that we know are going to prevent a transfer down the street and actually lead to the better outcomes for the resident?

How much of this is calls that are not going to lead to better outcomes, or something that would have just been duplicative? I worry a little bit that we need to keep an eye on it. I don’t think telemedicine is a panacea; I do think this is a really good development. We could definitely better leverage telemedicine in nursing homes around the country, especially given my comment earlier about physicians being missing in action.

On a Thursday night at 8 p.m. when a physician who is on call — she’s not coming into the building under the normal model, but under telemedicine she is, and she’s looking eye-to-eye with that resident. That’s really powerful. It has the opportunity to save the system a lot of money, but how do we make certain she’s only doing those visits when it’s really necessary?

We’re incentivizing the nursing home to press this every time there’s an issue, and we see this huge increase in spending. That’s always the challenge with these technologies is: How do we try to apply them where they’re going to really benefit everyone? That’s not true across the board here — like every technology, there’s high-value uses and appropriate uses, and there’s low-value and inappropriate uses.

I’m all for telemedicine in nursing homes, I think there’s going to be benefits there, but I think it’s important to study this, and understand where those benefits are, and try to structure the coverage such that we’re not simply using this every time there’s an issue — because I really worry that it can lead to a lot of excess spending.

Do you think COVID will actually produce lasting change in both policy and operations?

There has never been more attention on nursing homes and other long-term care settings than we’ve seen over the last year. Unfortunately, it took this pandemic to bring all that attention to the sectors. Hopefully, all of this attention is going to lead to reforms. I do think we’re going to see some reforms.

The challenge here, and I think you said it well earlier, but there’s really an entrenched interest group. It used to be that only a small number of us cared about this, the stakeholders that were directly involved. Now, there’s a lot more eyes and interest in this area, and yet … there’s really entrenched views on both sides about how we should go forward.

I do worry a little bit that if we don’t find some common ground here, and some ways forward, that we’re going to end up losing this opportunity to really change the system. That’s what’s interesting to me about long-term care, and nursing homes in particular — everyone would agree the system’s not working, yet no one will agree on the solution going forward.

I think we’re going to get a chance to try some different solutions in the coming years, I believe, if the different stakeholders can come to some consensus. I do appreciate there’s a lot of other needs in our economy right now from a number of different groups, and long-term care is just one of many needs — from workforce to other issues in health care, the restaurant industry. I mean, you just can go on and on and on.

A lot of groups are going to require financial support in the coming months and years, and I think if we really want to reinvent long term care and nursing homes specifically, we’re going to need to come up with a coherent plan. One of my biggest concerns, and this may sound out there to you, but I really don’t think there’s a lot of consensus across the stakeholders who have been in this area for a long time. I worry that policymakers will just up their hands and say, “Well, there’s no path forward here that works,” and they’ll move on to these other areas, education or workforce or whatever it may be. I really hope that we don’t lose this opportunity in long-term care.