Medicaid Long-Term Care Dollars Tip Toward Home

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Amy Shellhart By Amy Shellhart 
Product Management Director, Change Healthcare
Medicaid Long-Term Care Dollars Tip Toward Home

How does it feel to be a trend-setter? You may not realize it, but more Medicaid dollars allotted to long-term care are being spent on home- and community-based programs such as home health than are going to institutional services like nursing homes.

In 1995, 80% of long-term dollars flowed to institutions. Home- and community-based care crossed the majority threshold in 2013, capturing 51% of long-term care funds. One of the big drivers is cost, because institutional care is three times as expensive as programs delivered outside an institutional setting.

“The growing numbers of elders living with multiple chronic conditions increasingly strain state Medicaid systems,” says Carol Marak, aging advocate, columnist and editor at Seniorcare.com. “However, do we see it as a problem and throw tax dollars at it, or do we cleverly uncover the opportunities that exist in social economies, for example, retirees who want to leave a different kind of legacy and help those in need?”

Marak believes some of these challenges may be met by healthcare startups that target the growing population of older people. In the U.S., nearly 45 million people are 65 or older, or about one in seven Americans. By 2060, that number will approach 98 million.

“Low-cost solutions exist,” Marak says. “We just need to be more original.”

Despite being cost effective, home-based Medicaid programs are under attack in some states because of a growing senior population and the popularity of such offerings.

If your organization isn’t active in your state’s home care association and local agencies aimed at seniors, you should consider increasing your involvement. Participation will help you keep abreast of upcoming regulatory changes, find potential care partners and show your commitment to healthcare in your market. You could even find a few referral sources as well.

As the cost of healthcare continues to be closely scrutinized by federal and private payers, all healthcare providers – not just home care organizations – will need robust agency management and clinical software to adequately document patient conditions, care plans and outcomes.

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