November 9, 2012

American Action Forum Primer on VA Home Based Primary Care

By Doug Holtz-Eakin, President, American Action Forum

Two recent studies suggest that home healthcare should be given a close look in reforming Medicare.  The American Action Forum recently released a paper by Emily Egan entitled, “VA Home Based Primary Care Program: A Primer and Lessons for Medicare.” The goal of the primer was to summarize the working of the Department of Veterans Affairs (VA) Home Based Primary Care (HBPC), shed some light on its effectiveness, and draw any lessons for home health in the Medicare program.

HBPC began in 1972 (with 6 demos) and serves veterans with chronic and disabling conditions who need more care than periodic doctor visits.  It uses teams of medical directors, nurses, social workers, dietitians, psychologists, pharmacists and rehabilitative therapists to provide integrated and coordinated care for the patient.

The program appears to have been a success in that participants experienced a drop of 62 percent in hospital days, 88 percent in nursing home care days, and 24 percent in overall care costs. In addition, on study concluded that participants in the HBPC program had higher scores for “health related quality of life” than a comparable control group.

All of this suggests that Medicare ought to take a close look at HBPC.  However, Medicare as it is currently structured is not set up to simply copy the VA approach, as the home health benefit has different eligibility requirements and services. Medicare’s home health benefit is focused on the homebound; not the larger number of chronically ill patients.  Moreover, Medicare permits up to 60 days of care, while the HBPC has unlimited visits as long as they are medically appropriate. Finally, Medicare is more narrowly focused on health and rehabilitation as opposed to the coordination of a team in the HBPC.  In short, taking the HBPC approach would expand the population, number of visits, and services available – a major expansion for Medicare that would have to be offset by cost-savings obtained.

It should be noted, that there is some hope on this front as well.  A recent “Clinically Appropriate and Cost-Effective Placement” (CACEP) report from the Alliance for Home Health Quality and Innovation suggests that placing post-acute care patients in the most clinically appropriate setting can deliver large savings for the Medicare program by significantly reducing hospital admission and readmission rates.  In some cases, home healthcare is the most appropriate setting.

What’s the bottom line?  The combination of the two studies raises the tantalizing possibility that a HBPC-like approach to the Medicare home health benefit might provide more and better care, and at the same time lower the cost of Medicare.  It is a lofty goal, but with Medicare’s looming insolvency, policymakers need to consider major changes with the potential for major results.