REPORT: Cuts to Home Health Increase Long-Term Healthcare Costs

The Report

Health & Medicine Policy Research Group’s Center for Long-Term Care Reform published a recently released a report titled “Medicaid Home Care Cuts: Analysis of Unintended and Unnecessary Consequences.”

The report was issued in response to a proposed Illinois state budget that calls for $2.7 billion in cuts to the state Medicaid program – including home healthcare funding – in 2013.

The Findings

• Cuts to Medicaid support for home care services weaken the home care network, which is needed to help shift patients away from more expensive institutional care settings.

• Reductions in home healthcare funding are associated with an increase in hospital, emergency and nursing facility utilization. Thus, Medicaid cuts for home care services will cost the state government more in the long run, and also make it harder to respond to the growing needs of aging Baby Boomers.

• More specifically, the report cites an Avalere Health study that found that post-hospitalization home health services are associated with significantly lower post-hospital costs and hospital readmissions.

The Implications

Medicaid home care cuts result in an overall increase in Medicaid expenditures because of cost shifting to more expensive institutional care settings.

Instead of proposed cuts, Illinois lawmakers should look for lasting solutions, such as programs to encourage the use of cost-effective home- and community-based care, reduce more expensive institutional long-term care services and generate cost savings – as seen in the VA’s Home Based Primary Care (HBPC) program, the Community First Choice Option or Ohio’s proposed Integrated Care Delivery System (ICDS).