Home Health is the Answer to Saving the Medicare Program

A little known fact to most people outside of the industry but home health has been facing a lot of scrutiny from the government for the past 10 years or so. Increasing regulation and decreasing reimbursement from Medicare creates a situation in which most home health agencies continue to struggle for survival. The limited awareness of the issue stems from the fact that most people don't even know home health exists unless they've had direct experience with it, either personally or through a loved one.

Home Health Care: A Hidden Gem

Home health is a very important part of the medical community because of its extremely low cost, compared to other sectors of the industry. In fact, expanding the home health industry would only do good to a government that’s struggling to keep up with the rising costs of the Medicare program. According to the Partnership for Quality Home Healthcare, a day in home health is significantly lower than day in a skilled nursing facility or a hospital.

Day in Home Health: $145.00

Day in Skilled Nursing Facility: $373.00

Day in Hospital: $1,805.00

That’s not to say that all medical care can be appropriately provided at home via intermittent skilled care. Not even close. But maybe about 10%. According to the Potentially Preventable Hospitalizations for Acute and Chronic Conditions, 2008 report by the Agency for Healthcare Research and Quality, 10% of hospitalizations could have been prevented. Further, 6 out of 10 of these hospitalizations were for seniors (ages 65 and up).

As we saw above, hospitalizations are expensive! Add the cost of surgery and other “expenses” and the number multiplies exponentially. Recently, a 20 year old posted his $55,000 hospital bill for an appendectomy and overnight stay on Reddit, attracting a lot of attention, both at home and abroad, about America’s “broken” healthcare system. You can find the Business Insider article here for more details.

Fixing America's Healthcare

CMS recently introduced incentives for hospitals to avoid readmissions in the form of payment reductions. Although there is still a long way to go, it’s a step in the right direction if the pressure on the home health industry is lifted just a tad. After all, home health is one of the primary methods of preventing readmissions, especially with acute and chronic cases, however the funding on this side of town is drastically decreasing. On the one hand, regulations are multiplying, presenting further strain on the fixed costs of home health agencies as they need more and more staff to track all the additional requirements. On the other hand, cuts to the home health program are expected to put 40% of agencies out of business (read article here). How then to prevent hospitalizations and re-hospitalizations with such a strain on access to care?

Of course it's very easy to criticize from the sidelines without offering a valid alternative. At TT Medical, we feel that expanding the home health program, or at least not reducing the reimbursement rates for agencies any further, would create huge change. But maybe we're a little biased.