February 23, 2012

Medicare Savings and Home Healthcare

There is a belief in government circles that a good way to trim the Medicare budget and, in so doing, help reduce federal deficits is to squeeze dollars out of support for home healthcare.

That line of thinking could not be more wrong.  That’s not merely an opinion.  It’s supported by hard numbers.  Home healthcare is actually saving the Medicare program money – serious money.

One of the most challenging cost drivers to Medicare today is hospital readmissions, patients who are discharged from the hospital but then find themselves right back there days or weeks later because of a reoccurrence of symptoms or other health complications.  It’s easy to see how this happens.  When an elderly person goes home from the hospital, they often don’t have the support to make sure they take their medications, follow doctors’ post-release orders or schedule follow-up physician appointments.

There is so much money being spent on readmissions that the Obama Administration has correctly made a major priority of turning this trend around.

What policymakers need to realize is the role home healthcare plays in reducing the likelihood of hospital readmissions.  The widely-respected Avalere Health recently studied patients who have diabetes, chronic obstructive pulmonary disease and congestive heart failure, and compared those who received home healthcare after their hospital discharge with those who were in some other type of post-acute care facility.  Avalere found that home health generated a $2.81 billion reduction in Medicare Part A spending over a three year period.

Further, the researchers also estimated that, if patients in other post-acute care settings had been receiving home healthcare, Medicare could have saved another $2 billion over that time period.

The logic here is inescapable.  A home health patient has a trained professional conscientiously monitoring their condition, giving proper treatment for chronic illnesses, ensuring that medications regimens are followed and consulting with the patient’s primary care physician and specialists. Costs are reduced for the simple fact that the patient is able to get well, avoid symptoms and stay out of that expensive hospital bed.

So let’s hope policymakers in Washington understand and follow this logic.  Cutting home healthcare budgets and imposing new co-pays on patients may have the appearance of savings measures but will actually cost Medicare and American taxpayers more in the long run.