July 20, 2011

National Home Healthcare Group Applauds Ohio Governor John Kasich for Encouraging Cost-Effective Home Healthcare Services to Improve Care, Reduce Healthcare Costs

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(WASHINGTON) — While policymakers in Washington debate cuts to the nation’s Medicare program as a way to reduce the federal budget deficit, a group of national home healthcare providers is applauding Governor John Kasich’s (R-OH) innovative program to keep seniors in their homes when possible, thereby reducing institutional healthcare for aging Ohioans and harnessing rising Medicaid costs.

Ohio’s PASSPORT program, which screens seniors for eligibility and then matches them with a caseworker to develop appropriate home healthcare options, is expected to help slow Medicaid’s projected 8 percent spending growth in Ohio to 4 percent, well below the national average. The shifting of state funding away from costly institutional settings will allow an additional 12,890 seniors to choose home care because of the lower costs.

As Gov. Kaisch recently told a group of Ohio seniors: “In the past if somebody wanted to stay in their home, there were limited opportunities for them to do it. That day is gone. I can’t think of anything more important to a senior than to be able to stay in their home with assistance rather than being put in a facility that they’re not comfortable with.”

“Governor Kasich is taking a stand to do what’s best for seniors, and his state’s budget,” said Billy Tauzin, senior advisor to the Partnership for Quality Home Healthcare. “Policymakers nationwide should look to Gov. Kasich as an example of how innovative, forward thinking reforms are the way to a better future for seniors and all taxpayers alike.”

Approximately 32,000 Ohioans are currently enrolled in the PASSPORT program, with an average cost per person per month of $1,344. In contrast, the state of Ohio pays an average of $4,017 per person per month for nursing-home care.

On a national scale, the home healthcare community is hoping policymakers will take note of the inherent cost-savings of skilled, home-based care and ensure that seniors’ access to this type of care is not negatively impacted by deficit reduction proposals — including cost-sharing in the form of copayments, which many seniors cannot afford.

A recent study by Avalere Health, LLC showed that home health use was associated with a $2.81 billion reduction in post-hospitalization Medicare Part A spending between October 2006 and September 2009 in patients with select chronic illnesses. Specifically, Medicare Part A spending on home health users in this three year span was $2.81 billion less than it would have been if they had received post-acute care services in other settings. Avalere researchers also found that home health use after an initial hospital visit was associated with an estimated 20,426 fewer hospital readmissions, and avoiding these readmissions saved Medicare an estimated $670 million between October 2006 and September 2009. Furthermore, the study revealed an additional $485 million in Medicare savings that could have been generated from fewer readmissions, if beneficiaries who received other PAC services had used home health care instead.

In a separate analysis, Avalere researchers concluded that copayments for home healthcare services could increase Medicare spending for inpatient hospital and post-acute care (PAC) treatment by up to $16.7 billion over ten years. Research conducted by Dobson DaVanzo & Associates, LLC projects that a home health copayment could drive up Medicaid costs by as much as $2.4 billion over ten years, as Medicaid would cover co-payments for a portion of dual eligible individuals.

The home health community is advocating a savings plan that will reduce Medicare costs through program integrity improvements rather than increased fees on seniors who require home healthcare services. The community has proposed The Skilled Home Healthcare Integrity and Program Savings (SHHIPS) Act, which Dobson DaVanzo & Associates, LLC and former CBO Director Douglas Holtz-Eakin have projected will save Medicare billions of dollars over 10 years.