Home Health Can Cut Medicare Costs, Says AHHQI Exec

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Karen Utterback By Karen Utterback 
Former Vice President, Product Marketing and Strategy, McKesson (Retired)
Home Health Can Cut Medicare Costs, Says AHHQI Exec

The greater use of lower-cost post-acute care settings and select structural changes could save Medicare $100 billion over a decade, according to Teresa Lee, JD, MPH. Lee, executive director of the Alliance for Home Health Quality and Innovation (AHHQI), was a keynote speaker at the recent McKesson Homecare & Hospice National Users’ Conference.

AHHQI commissioned a three-year analysis of Medicare data (2007-2009) to determine how the use of home health fits into the continuum of care, in what the organization calls the Clinically Appropriate and Cost-Effective Care (CACEP) Project. “Compared with other post-acute care settings, home health was the least costly,” Lee says.

Using joint replacement (MS-DRG 470) as an example, the average Medicare payment was $23,479. Among post-acute care settings, home health was the least expensive, at $18,068, a savings of about $5,400. Only releasing the patient back home cost less ($17,340). In contrast, average payment for a long-term care hospital was nearly $58,000, and $26,861 for a skilled nursing facility.

Of course, not every patient should be released to home health. But by making clinically appropriate recommendations, the healthcare system can cut costs while improving the quality of care, Lee says.

Emerging care models are focusing on the sickest, costliest patients, which underscores the importance of using data analysis to stratify populations of patients according to risk. While the industry is undergoing consolidation, even smaller agencies have a role to play by focusing on evidence-based best practices to track quality and cost metrics geared toward priority measures.

AHHQI, with its Future of Home Health Care Project, seeks to raise the stature of the home health industry as a value provider of quality healthcare that keeps people where they want to be – at home. The organization has released a white paper on the topic and hosted a workshop and symposium. AHHQI is currently developing a key strategic framework and recommendations to realize the potential of home health care. As part of the project, the Alliance is holding a series of regional symposia over the course of this year.

Lee says that input and ideas are welcome by sending email to: FutureofHH@ahhqi.org or using the Twitter hashtag #FutureofHH.

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