AHA Commissioned Report Challenges Inappropriate Conclusions Regarding Long-term Care Hospitals

The American Hospital Association (AHA) released a new analysis conducted by the prominent health care economics and policy consulting firm Dobson DaVanzo & Associates, LLC (Dobson). The analysis critiques the findings of an academic paper that misconstrues the facts and draws faulty conclusions regarding the role of long-term care hospitals (LTCHs).¹ Specifically, in its comprehensive critique of the paper by Einav and colleagues (Einav paper), Dobson’s economists and analysts rebut the findings and implications of the paper by analyzing the data, assumptions, econometric approach and methodologies. Ultimately, Dobson found that the conclusions reached by the study are not warranted and represent an overreach of the facts.

LTCHs play an important and unique role for Medicare and other beneficiaries by caring for the most severely ill patients who require extended hospitalization. As discussed in the Dobson analysis, LTCHs offer an intensive level of care that is not normally provided in other post-acute care settings. LTCH patients are typically very medically complex, with multiple organ failures, and stay in the LTCH on average at least 25 days. Many LTCH patients depend on ventilators due to respiratory failure or similar ailments, which require highly specialized care. In addition, LTCHs are critical partners for acute-care hospitals, alleviating capacity for overburdened intensive care units and other parts of the care continuum that would otherwise be further strained without access to LTCHs for these patients.

Dobson’s report identified numerous shortcomings in the Einav paper. Some of the most problematic include:

• Use of data that is more than 10 years old, despite dramatic payment reforms and other changes in the field since that time.
• Weak assumptions about substitutability of LTCH care with non-hospital care provided in skilled-nursing facilities.
• Narrowly defined outcomes that do not include the totality of health spending or care outcomes for Medicare beneficiaries.
• Econometric shortcomings involving sensitivity analysis, misspecification errors, variable bias and others.
• Research that contradicts the paper’s findings and which supports the value and unique role that LTCHs fulfill in caring for beneficiaries.
• Bias and other weakness with the external and internal validity of the paper.
• Failure to consider alternative factors that contribute to the observed variations in spending.

Dobson’s critique of these defects in the Einav paper underscores the importance of not using it to support policymaking or other decisions regarding the Medicare program. Instead, policymakers should consider the input of the doctors and other experts who support the LTCHs role in the care continuum for severely ill patients.

For questions or more information about this report, please contact Jonathan Gold, AHA’s senior associate director of post acute payment policy, at jgold@aha.org. 

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¹ Liran Einav, Amy Finkelstein & Neale Mahoney, July 2023. "Long-Term Care Hospitals: A Case Study in Waste," The Review of Economics and Statistics, MIT Press, vol. 105(4), pages 745-765.