Hospital in the Home Analysis

The United States is not the only country with significant health system concerns, most of the developed world is trying to figure out how to manage spending in an aging population.  We can learn from some of the work being done in those other developed countries.  A paper from Deloitte explores the use of the “hospital in the home” concept in Australia.   (Deloitte Paper)   Typically hospital in the home involves providing extensive home care services to either avoid a hospital stay altogether or to shorten it.  Since a hospital is typically the most expensive setting in which to provide care, the cost is generally lower to treat a patient in their own home, and in the long-run there could be significant capital savings from the need for fewer hospital beds.

Deloitte examined earlier systematic reviews on the effects of hospital in the home care, finding that those reviews demonstrated that mortality and hospital readmissions were no worse with hospital in the home.  Use of hospital in the home substantially decreased hospital length of stays.  Deloitte then examined six common diagnostic groups treated in a hospital to determine the economic effects, and the potential further savings, in Australia for use of hospital in the home.  Deloitte did the analysis including just health spending and an alternative that included the cost of informal caregiving that occurred when the patient was at home.

For all diagnoses except COPD, hospital in the home resulted in a 4% to 28% savings even including an attributed cost for informal caregiving.  The only reason COPD didn’t show savings is because it had the smallest difference in hospital length of stays.   The overall savings across all six diagnoses groups was about 22%.  If informal care is excluded, there are savings for all diagnoses and the overall savings are even larger, approaching 30%.  Even for a country with a small population like Australia, the savings from widespread hospital in the home use could amount to over a $100 million.  In the United States, where unit costs are higher and the population about 15 times larger, the savings would likely be billions of dollars annually.