Six Opportunities for Homecare to Reduce Healthcare Costs

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Karen Utterback By Karen Utterback 
Former Vice President, Product Marketing and Strategy, McKesson (Retired)

Cost of HealthcareHome health and hospice agencies have important roles to play in emerging care models, says Joe Damore, vice president at Premier Performance Partners. Damore was one of the featured speakers at the 2012 McKesson Home Health & Hospice Executive Summit.

The U.S. economy remains fragile, and continued increases in healthcare spending is a contributing factor. If scheduled cuts in Medicare reimbursement take place because of last year’s failed federal budget reduction negotiations by the Super Committee, hospitals, doctors, skilled nursing facilities, home health agencies and others will lose an additional $123 billion in Medicare payment.

Premier sees six major opportunities for per-capita healthcare cost reduction, with most of these playing to the strengths of the home health and hospice industry:

  • Chronic disease management has shown its worth in reducing hospital utilization and overall costs. Some home health agencies have developed disease management programs for specific symptons, including asthma, diabetes, congestive heart failure (CHF), chronic obstructive pulmonary disease (COPD), hypertension and depression.
  • Patient-centered medical homes employ a team-based, proactive model to healthcare that home health and hospice agencies can be active participants. Significant decreases in the use of more costly care have been seen in the most successful and comprehensive team-based models, Damore says.
  • End of life/palliative care can bring pain management and hospice care in appropriate, lower-acuity settings.
  • Utilization of expensive diagnostic tools has been put under the microscope by federal payers, insurance companies and patients who increasingly are insured by high-deductible plans.
  • Pharmaceutical use and costs, including the increased use of generic medications, will result in lower per member per month (PMPM) pharmaceutical expenditures, which represent another area of potential savings.
  • Replacement of more expensive care locations with lower-cost facilities includes the increased usage of primary- and urgent-care facilities instead of the emergency department, but it also encompasses rehabbing at home instead of at an in-patient facility.

Economic issues, the rising cost of healthcare and new care models are placing unprecedented demands on the home health and hospice industries, Damore says. But rather than hunker down and wait for the storm to pass, he advises agencies to study their markets and determine how they can meet these challenges head-on by working collaboratively with integrated health systems and accountable care organizations.

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