Managing the cost of care in the home

Health plans and others across the healthcare system are increasingly integrating home health services into coordinated care approaches. Carelon Insights shares why this is a smart strategy and how to improve on it.

The U.S. population is aging at a startling rate. Currently, more than 10,000 baby boomers are turning 65 each day. At the same time, our population of older adults is living longer with more clinically complex conditions. This has resulted in a growing cost of care, called the national health expenditure (NHE). In 2018, the NHE grew 4.6% to $3.6 trillion, or $11,172 per person, and accounted for 17.7% of the Gross Domestic Product.

From a health care cost standpoint, home health services can improve patient outcomes and reduce the total cost of care for many conditions.  For this reason, health systems, payers, and doctors are recognizing the importance of incorporating home health services into coordinated care approaches to reduce the cost burdens of hospitalization.

Distinctions between non-medical and medical home health care

It is important to understand the difference between home health care and non-medical home care. This is an important distinction because the Medicare benefit covers medically necessary home health care but does not cover non-medical home care. 

The significant difference between home health care and non-medical home care is the level of skilled care required. Home health must be prescribed by a doctor and provided by medically trained and licensed professionals. The care required must be such that it can only be delivered by these trained professionals. Home health is typically short-term and most appropriate for recovering patients who are ill with a chronic condition like heart failure or patients healing after an accident, injury, or acute health condition like surgery for a hip replacement. Home health care permits early release from a hospital, reduces hospital admissions, and may speed up recovery times. It is less expensive, more accessible, and often as effective as care from a hospital or skilled nursing facility (SNF).

Non-medical home care includes services provided by caregivers who perform only non-medical care tasks. This falls into the category of long-term care services and includes “custodial care”. Custodial care helps people with activities of daily living, such as help in walking, getting in and out of bed, bathing, dressing, feeding, and using the toilet, preparation of special diets, and control of medication that usually can be self-administered. In short, custodial care is personal care that does not require the continuing attention of trained medical or paramedical workers. Non-medical home care can also include assistance with light housekeeping, laundry, grocery shopping, medication reminders, and companionship. This type of care is not typically covered by Medicare or commercial health insurance. Many people pay for this type of care out-of-pocket or with long-term care insurance. Patients who qualify based on financial need and other criteria may be covered by Medicaid for these types of services.

Distinct, diverse benefits of home health care

The skilled care provided by home health providers is an important part of easing the overall social, physical, and financial burdens of disease and disability on the Medicare population. Skilled services provided by home health agencies include nursing, physical therapy, occupational therapy, speech therapy, and social work. These services are meant to help patients and their caregivers in the management of a medical condition or in the improvement in a loss of function. Additionally, during the time a skilled professional is in the home, home health aide services may also be covered if these services are necessary to the management of the patient’s illness.

Preventing unnecessary hospitalizations, intervening early

Home health care reduces the expensive burden of hospitalization and re-hospitalization through several proven approaches. These include:

  • Fall reduction

  • Medication management

  • Disease management

  • Social work interventions

Preventing Falls

Fall reduction is the most important strategy used by home care agencies to prevent hospitalization. One out of three adults aged 65 and older suffers a fall each year. Falls among older adults are the leading cause of injury and death and are the most common cause of nonfatal injuries and hospital admission for trauma. Adults over 75 who live in community living have a 50-60% likelihood of falling every year. Adults over 65 have a 15% likelihood of breaking a hip in their lifetime – and 33% of persons who break their hip in a fall die within a year. 

To look at the bigger picture: in 2009 22 million nonfatal fall injuries among older adults were treated in emergency departments, and more than 581,000 of those patients were hospitalized. By 2020, the cost of fall injuries is projected to reach $43.5 billion. Programs to reduce falls are used by almost all agencies, since the problem is so widespread, and ways to prevent it are commonly known and used. The different stages in fall reduction programs are meant to gauge each patient’s risk of falling, as well as their risk of injury if a fall occurs. Based on the risk of falling, the home care provider takes necessary action, including educating patients, to help prevent falls.

Managing medicines

Comprehensive medication management can lessen rehospitalizations by up to 35%. This approach includes review and monitoring of each patient/caregiver’s ability and willingness to maintain their prescribed medication routine accurately and safely. Good medication management involves being aware of what medicines a patient is taking, reviewing them to identify potential cross-medication issues, doing patient assessment and patient education, monitoring adherence to the medication regimen, and acting when necessary. 

Medication mistakes are easy to make, especially for seniors who may not see or handle the pills as well, who are on medications that might have side effects such as drowsiness, have many medicines to keep track of, or who have trouble remembering details; some or all of these might be true for someone needing home health care. The result is that 30% of all hospitalizations and 45% of all readmissions among seniors are associated with medication mismanagement.

Managing individuals’ complex conditions

Disease management strategies can also ease the overall cost of care by reducing rehospitalizations. These strategies coordinate healthcare interventions and communications for populations that have special health concerns. A review of disease management programs for heart failure found an 8% decrease in rehospitalization and that later all-cause rehospitalizations were reduced by 19%. In another study, a pilot program showed a 23% rehospitalization rate for patients with chronic disease over 12 months, compared to the national rate of 34%. The three pillars of that program were:

  • Physician collaboration

  • Patient/family empowerment

  • Telehealth home care provider

Some of the common disease management programs address CHF, COPD, diabetes, hypertension, coronary artery disease, stroke, end-stage renal disease, and pain management. Disease management pathways typically include education, self-care guidelines, and monitoring.

Promoting positive social work interventions

Finally, comprehensive social work assessments can be very useful for helping patients and caregivers find appropriate resources. This can include addressing social and emotional factors relating to a patient’s illness. It often also includes an assessment of the patient’s home situation, financial resources, and the availability of community resources. Social work interventions can improve the environment and financial situations for patients and support any lifestyle changes. They can improve the condition of the home, improve quality-of-life outcomes, and decrease overall health risks.

The future of home health care costs

In the U.S., fragmented care has led to overutilization and poor healthcare outcomes.

“As payers and providers align to deliver more integrated care, home health care has become an important part of the total cost of care solution. It works best as a part of an interdisciplinary approach to holistic patient-centered care.”

-Catherine Stallworth, MD

Ideally, this solution includes effective communication with doctors and other experts who provide close supervision, oversight, and support to those health care professionals offering in-home care. This integrated care will allow more useful action to be taken in the home and community and decrease the overall burden of the cost of care by preventing complications and reducing expensive hospitalizations.

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