In recent months, public health services have been cut in some counties across the U.S. Higher property taxes also may be in the cards for some areas.
These are just two of the unforeseen results of the retooling of Medicare home health payments.
Nationwide, about one of 10 county public health departments runs a home health agency, said Tom Milne, executive director of the National Association of County and City Health Officials.
In some states, such as Illinois, that figure is closer to one of two.
Under the new Medicare interim payment system, public and private home health agencies have taken a financial beating over the past year. Like the for-profits, county-run home health agencies are containing costs by reducing staff and patient visits, and managing utilization.
But the fiscal strain on county-owned agencies has created a ripple effect beyond reduced home nursing visits.
The old Medicare reimbursement system was "a financial advantage for the health department because (the system) picked up more than its share of overhead," explained Lloyd Evans, administrator of Logan County (Ill.) Health Department Home Health Services.
Some health department directors say Medicare reimbursement was used only to cover direct home health costs.
But Evans is not alone in observing that Medicare reimbursement was also "essentially a subsidy" for other public health programs.
Such cost-shifting is no longer possible under the IPS, which pays the lesser of caps or actual costs.
Some public home health agencies can make up the shortfall by tapping sources of revenues unavailable to private agencies.
In rural Sullivan County, Mo., about 90% of residents who receive home health services get them through the health department, said Administrator Connie Michael. Since the advent of the IPS, the agency has lost money and dipped into its reserves.
"But that can't go on forever," she said. "We may have to try for more taxes."
In San Luis Obispo County (Calif.), the county home health agency was worried about solvency even before the IPS was implemented. Rather than drawing from public funds to sustain the agency in an increasingly competitive marketplace, the board of supervisors decided to leave the business.
In New York, Jean Bilow, the director of the Jefferson County Health Department, said tax increases are not "appropriate public policy," but neither is eliminating home-care service if county residents need it.
"As a public agency, we have a responsibility to deliver necessary care to patients in the county," she said. And although Jefferson County's finances are tight, the department has not had to make drastic changes.
But other counties have had to do so. With Medicare cash flow down to a trickle, some regions no longer offer services that residents had taken for granted.
Logan County's Evans has decided not to pull the plug on his home health operation for now. But he said the reimbursement change has forced him to slash the number of free public health home visits to about 360 in 1998 from 3,700 in 1997.
Therese Macias, public health administrator for the Jersey County (Ill.) Health Department, said her Medicare income fell by half in 1998. Because the health department is not supported by tax dollars, "the county is not going to bail us out," she said.
To make ends meet, Jersey County may have to discontinue its money-losing homemaking program, which provides cleaning and other household help to the elderly. The program has been subsidized for years by the Medicare home health program, Macias said.
At another county health department in southwestern rural Illinois, the family planning program has already been trimmed, said Thomas Smith, administrator of the Monroe-Randolph Bi-County Health Department. "Home health used to underwrite family planning to the tune of tens of thousands of dollars a year," he said.
But the county's home health division, which ran a $21,000 surplus excluding overhead in 1997, lost $28,000 in 1998. Now the county charges for birth control pills, which had been distributed for free.
Over the next four to five months, the board will decide whether to shutter the home health agency.
Public health departments traditionally have taken patients who were unwanted by other providers. Under the IPS, that's not necessarily the case.
The IPS makes it unprofitable for city-based agencies to care for rural patients and for any agencies to care for patients with severe medical needs. Several heads of public health departments said some patients sent to nursing homes last year formerly would have been added to home health rolls.
Even in counties in which the payment system has not affected public health programs or raised the possibility of a tax hike, it has had an effect.
Northwest Michigan Community Health Agency, which serves four rural counties, said that five home health agencies in the area used to work jointly on public education projects, and a few years ago the agencies collaborated on reducing lengths of stay at local hospitals.
Now, however, the atmosphere has become much more competitive, said Nancy Bottomly, director of adult health.