Most senior citizens will fight fiercely to remain in their own homes, often well beyond their physical or even mental capacity to take care of themselves.
I know this from personal experience. I was closely involved in my mom's move from her home to an assisted-living residence and eventually to a nearby nursing home. Both moves were precipitated by preventable, in-home events that landed her in an acute-care hospital.
While there were huge costs involved, I never asked if the healthcare system could have provided her with a higher quality of life at lower cost during her declining years. The answer, provided by a little-noticed demonstration project initiated by the Affordable Care Act, is yes.
Last month, the CMS announced that the 17 physician practices participating in its Independence at Home Demonstration Project saved Medicare more than $3,000 per beneficiary in its first performance year. The agency saved $25 million.
The program targeted seniors with at least two chronic conditions or disabilities who had at least one hospital admission in the past year. The physician practices created teams that delivered in-home care, starting with monthly visits by a nurse to ensure that minor changes in a person's condition were treated before they led to an event that required hospitalization.
It sounds expensive. But the demonstration is proving that coordinated in-home care delivery can be cheaper in the long run.
President Barack Obama at last week's White House Conference on Aging—another little-noticed event—pledged for his last 18 months in office to pursue policies to help seniors remain in their homes. He promised more food assistance for the homebound and time for federal workers who provide care for aging parents.
That latter policy, if widely adopted by employers, would be warmly welcomed by most families. AARP, the nation's largest senior organization, estimates that 40 million family caregivers provide 37 billion hours of unpaid care each year, mostly for their elderly parents. By putting the average home healthcare worker's wage on those services, the group valued that uncompensated care at $470 billion a year—or about equal to Wal-Mart's annual sales.
The government pays for home healthcare for patients who are recovering from an acute-care episode. The Medicare Payment Advisory Commission estimated that Medicare spent about $17 billion in 2012 on home healthcare. Medicaid spent about $6 billion in 2011, according to the Kaiser Family Foundation.
But at present, this care is largely disconnected from the acute-care delivery system or even local physician practices. Also, little is known about the quality of that care.
Last week, Medicare published star ratings for its certified home healthcare agencies. But the measures used are largely safety-related and have little to do with judging whether home healthcare agencies are providing the kind of care that will prevent acute-care events and allow seniors and the disabled to remain in their homes.
Acute-care providers have an obvious stake in ratings that measure not just safety, but also quality and outcomes for patients receiving in-home services. Hospital systems looking to avoid high 30-day readmission rates already are narrowing their long-term-care facility networks to providers with better outcomes. They soon will be focusing similar attention on home healthcare agencies they don't control.
In the years ahead, home healthcare agencies will need to develop more sophisticated services like those offered in the Independence at Home Demonstration Project. Yet the CMS and Medicaid managed-care plans are putting downward pressure on rates. Earlier this month, the CMS proposed just a 1.7% increase in the standard-episode rate for 2017 after concluding that agencies were billing Medicare for services not justified by actual patient needs.
One response, at least in the for-profit sector, is to bring economies of scale to what has largely been a fragmented industry. Companies like Amedisys and Kindred Healthcare, which are on an acquisition binge, are betting they can successfully meet that challenge by offering a suite of post-acute services to health systems moving toward value-based reimbursement.
It just might work—as long as they are transparent on their outcomes and provide their services in a manner that furthers the ultimate goal of meeting seniors' needs and personal preferences while lowering the overall cost of care.