Homecare Urges Congress To Recognize Cost-Effective Role Of Homecare In Medicare, USA

Main Category: Caregivers / Homecare
Also Included In: Medicare / Medicaid / SCHIP
Article Date: 09 Feb 2006 - 11:00 PDT

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The American Association for Homecare opposes several provisions in the President's proposed 2007 budget, including a proposal to force transfer of ownership of oxygen equipment to the beneficiary after 13 months, a freeze on home health reimbursement, and elimination of the ability to purchase power wheelchairs in the first month.

"Continuing cuts to homecare erode the cost-effective infrastructure of homecare that will be essential to the nation's healthcare needs especially as baby boomers near Medicare eligibility," said Tom Ryan, Chairman of the American Association for Homecare and CEO of Homecare Concepts in Farmingdale, NY. "The expected growth in number of Medicare beneficiaries and the increasing length of time they will need healthcare services should encourage policymakers to keep cost-effective care methods such as homecare in mind as they create budget policy."

As the President and Congress seek cost-effective policies for Medicare and Medicaid programs in the 2007 budget, the American Association for Homecare will continue to educate policy makers about the cost-effectiveness of homecare. The Association had opposed several provisions in the recently passed Deficit Reduction Act that froze reimbursements for home health agencies for 2006, ended the option for Medicare beneficiaries to continue to rent certain home medical equipment items after 13 months, and forced transfer of ownership of oxygen equipment to oxygen users after 36 months. Medicare beneficiaries have the option of purchasing home medical equipment, but most prefer to rent in order to preserve their provider-patient relationship.

While Medicare spending has grown in recent years, Congress has repeatedly cut programs in homecare, the most cost-effective setting for healthcare. The Medicare Modernization Act of 2003 required steep reimbursement cuts in 2005 for home oxygen and other home medical therapies and equipment.

A survey of medical literature shows the cost-effectiveness of homecare. Studies published in the Journal of the American Medical Association, the New England Journal of Medicine, and other sources document the value of homecare. A brief summary follows:

Homecare Reduces Costs by 37 Percent for Heart Failure Patients

The May 2004 Journal of the American Geriatrics Society reports that homecare directed by Advanced Practice Nurses (APNs) reduced total costs of care for patients suffering from heart failure and comorbid conditions, attributable to fewer and later hospitalizations and fewer deaths. ("Transitional Care of Older Adults Hospitalized with Heart Failure: A Randomized Controlled Trial," Journal of the American Geriatrics Society, May 2004.)

Cost of Home Intravenous Antibiotic Treatment Much Lower than Hospital, SNF Settings

This 1998 study in Clinical Infectious Diseases quantifies cost savings of a home intravenous antibiotic program in a Medicare managed care plan. The average cost per day of home therapy was $122, compared to $798 in the hospital and $541 in a skilled nursing facility setting. (Dalovisio, J., et al, "Financial Impact of a Home Intravenous Antibiotic Program on a Medicare Managed Care Program," Clinical Infectious Diseases, 2000.)

One Year of Long-Term Oxygen Therapy at Home Costs Less than One Day in Hospital

Oxygen can be provided to a chronic obstructive pulmonary disease (COPD) patient who lives at home for one year at less than the average Medicare cost for one day in the hospital, which is $3,606 (Annual Statistical Supplement, 2004, Social Security Bulletin). Direct medical costs for COPD in the U.S. total $18 billion per year, nearly 9% of Medicare expenditures. (Dunne PJ. "The demographics and economics of long-term oxygen therapy." Respiratory Care. 45:223-228, 2000.)

Review of Medicaid Homecare in Seven States Shows Reduced Costs

A 2002 study published in Health Care Financing Review describes the characteristics of Medicaid home and community-based (HCB) programs in seven states. In Washington, the state imposed strict fiscal caps, keeping spending to 40 percent of the cost of nursing home care on a per capita basis. In 1999 in Alabama, spending per enrollee in HCB services was $6,612 compared to a per capita cost in nursing homes of $22,771. (Wiener, J., et al, "Home and Community-Based Services in Seven States," Health Care Financing Review, Spring 2002.)

Homecare Saves 65 Percent in Post-Acute Care

A 1999 study reported in the Journal of the American Medical Association reported savings of about 65 percent in a randomized-controlled trial of post-acute home-based management by advanced practice nurses. (Naylor, MD, et al, "Comprehensive discharge planning and home follow-up of hospitalized elders," JAMA 281:613-620, 1999.)

For a full list of studies with summaries, visit the American Association for Homecare at http://www.aahomecare.org.

The American Association for Homecare (AAHomecare) represents every line of service in the homecare community, including home health and home medical equipment providers, respiratory and infusion therapy, telemedicine, rehab and assistive technology, and hospice. With more than 3,000 member locations, AAHomecare delivers value for each healthcare dollar and advances quality healthcare services where patients prefer to receive them - at home.

American Association for Homecare
625 Slaters Lane, Suite 200
Alexandria, VA 22314-1171 703-535-1881
http://www.aahomecare.org

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