Health Care Costs

Every now and then an interesting health-related article is found in an unusual venue.  A recent edition of The Atlantic, written by a distinguished health policy wonk, contains an article addressing the use more home care for the chronically ill elderly population.  (Atlantic Article)    As the population ages, an increasing portion of our total health spending is going for a relatively small number of chronically ill older Americans.  Many of these people wind up in nursing homes, where they often make repeated trips to emergency rooms or hospitals for flare-ups of one or another of their health conditions.  As their health slides down toward the last year of life, their spending goes up rapidly, usually due to a cycle of repeated and ineffective hospitalizations.  Those who live at home also tend to have high rates of ER and hospital use.  In addition to their health problems, they tend to have a syndrome of other issues, such as inadequate income, poor health literacy and non-existent social support.  They often engage in poor health behaviors and make poor health care decisions.

The article describes a new approach reflected in a number of programs across the country to create intensive, multi-disciplinary, home-based care and support for these patients, in the hopes of improving their health and quality of life and potentially reducing overall health spending on them.  One underlying premise is that the health conditions can be treated most effectively  if the other issues in a person’s life are also addressed.  Another premise is that care in a home setting is almost always less expensive than that rendered in a hospital or nursing home or ER.  Focusing on one program in California, the author suggests it may offer a model for  the country.  Social workers are key members of the program’s team and are able to address issues that exacerbate health problems.  A barrier to these programs, as usual, is the fickle and random nature of Medicare reimbursement, which pays a lot for hospitalizations and ER care, but not much if anything for this kind of team-based care coordination, much less for social work.  The programs must scramble to find grants or other funding.  Medicare Advantage plans are better able to be creative since they can choose to spend the money CMS pays them how they wish.  And many of these people are dual eligibles and many Medicaid programs are more flexible than CMS.  It is very, very unclear that these programs will save money.  But just as clearly, they likely make patients’ lives much better, and that is itself a worthy goal.