Savings from Home Health Use

A study conducted by Avalere and sponsored by a home health care association examined the impact of home health care on Medicare beneficiaries’ readmissions and health spending.  The study covered beneficiaries with diabetes, chronic obstructive pulmonary disease and congestive heart failure and compared results for those who received home health care after a hospital admission with those who had some other post-discharge care, such as care at a skilled nursing facility, inpatient rehabilitation or services from a long-term acute care hospital.  (Avalere Study) The study adjusted for many variables that might affect care, but not all, so the patient populations are probably roughly similar.  The primary outcome was spending and readmissions following an initial hospital stay, for the period from 2006 to 2009.

The study found that Medicare Part A spending after the hospitalization was lower for patients who received home health services after the hospitalization than for patients who received other forms of post-discharge care.   The greatest savings appeared to be among those patients who were the most severely ill.  The home health care patients also were less likely to be rehospitalized, but this finding did not reach statistical significance.  The use of home health care instead of other services seemed to save Medicare about $2.81 billion in the 2006-09 time frame.   If all beneficiaries had used home health services another $2.07 billion would have been saved, but probably not all of the patients could have been discharged to home.   The study further estimated that over 20,000 hospital admissions were avoided in the home care group and another 14.000 could have been avoided if all patients used home care after their hospitalization.

The savings were about $6281 to $12,267 for a patient with diabetes; $6098 to $11,928 for a patient with COPD and $5020 to $8,883 for a patient with CHF, depending on severity and time after the admission.  Reductions in readmissions were greatest among beneficiaries with COPD.  While the study may have some methodological limitations, it is consistent with other research showing that home health care is relatively inexpensive compared to other forms of post-discharge care and that good home health care can reduce readmissions.  Although not studied in this piece of research, recipients of home health care also tend to have higher satisfaction with their care and quality of life.