As the health care industry transitions to a reimbursement system dominated by value-based payment models, home care services are demonstrating their proof of concept as an effective way of controlling health care spending by reducing the need for more costly inpatient hospital services.

The latest evidence comes from the Centers for Medicare & Medicaid Services, which recently released the results from the second year of its Independence at Home demonstration project. CMS said the 15 provider organizations that participated in the program's second year saved Medicare more than $10 million primarily by reducing inpatient hospital utilization rates of the nearly 11,000 beneficiaries who received home-care services from the participating providers.

If given the choice, most people would prefer to receive health care services in their own homes rather than in their local hospitals. A number of innovations are making that shift possible. We're at a critical point at which mounting cost pressures should allow those innovations to flourish and unleash home care's potential to improve patient health at less cost to the health care system.

Quote Home CareOther numbers also tell the story of home care's potential. New figures released by CMS project that national health expenditures will jump by 76.1 percent to more than $5.6 trillion in 2025 from $3.2 trillion in 2015. Spending will rise an average of 5.8 percent per year over that period compared with about 4 percent over the previous five-year period. Spending on hospital care will climb slightly faster, up 76.7 percent to about $1.8 trillion in 2025 from a little more than $1 trillion in 2015.

Home health care spending will rise at a faster clip – 80.8 percent to $159.5 billion by 2025 from $88.2 billion in 2015 – but still will represent less than 3 percent of total health care spending in 2025.

CMS attributed the faster rise in spending to more people having health coverage, better overall economic growth and an aging population. I won't argue with the first two, and I will strongly agree with the third. An aging population just by its sheer number comes with a higher volume of health needs that must be addressed. Add to that the increasing rate of chronic illnesses, and you have two of the biggest drivers of high-cost hospital care, which, in turn, is a major driver of national health expenditures.

Innovations in Home Care Services

If you want to tame national health expenditures, then you must lower inpatient hospitalization rates, and one of the best ways to do that is through expanded use of home care services.

The age and acuity of home care patients are rising. Innovations in home care services have expanded providers' capacity to take care of those patients and their medical conditions in the patients' homes rather than in the doctor's office or hospital. There are technical innovations in medical devices that allow providers to perform more diagnostic and procedural activities in the home setting. Examples include wound care, telemedicine, remote monitoring, laboratory work, pulse oximeters, remote EKGs and even chest x-rays.

Another innovation is in the skill set required of home care staff. They're no longer “workers” but clinicians who have superior patient assessment skills. They are highly skilled at assessing patients' health status to detect a new disease or the exacerbation of a disease process. They are the eyes and ears of physicians and are able to relay that information in a timely manner and implement changes in care plans quickly to avoid hospitalization.

Home care clinicians also possess the technical skills to use the mobile and portable medical devices now available for home use. Home drug infusion therapy is a great example. Clinicians are able to establish a venous access device, administer the medication and teach the patient how to administer the medication.

Medication and Diet Adherence Essential

In addition to innovations in technology and skill sets, home care providers offer two traditional services strongly linked to hospitalizations and readmissions.

The first is medication adherence. The lack of adherence – not taking medications, not taking the right medications or taking the right medications the wrong way – is estimated to be the cause of nearly one-third of readmissions of patients with chronic medical illnesses. Clinicians in the home can do four things to increase a home care patient's medication adherence:

  • Perform medication reconciliation to make sure patients have all the right medications at the right doses
  • Ensure that prescriptions have been filled and the medications are available in the home
  • Monitor adherence to confirm the patient is taking the right medications at the right time in the right way
  • Watch for any side effects for medication use that can be addressed immediately

Let's not underestimate the role of proper diet in keeping people with chronic medical conditions as healthy as possible. It's much easier to do at the hospital with dietary instructions sent to food service and meals coming up to patients' room in accordance with those instructions. Patients are discharged and told to follow the same instructions. Patients may not understand the instructions, not know how to prepare the food or even have the means or ability to shop for the food called for in the instructions.

Having a home care clinician available turns that situation around. They can establish the ability of the patient or the patient's caregiver to acquire the right foods and to prepare the foods properly. A home care clinician can monitor a patient's adherence to his or her new diet. Most importantly, the clinician can work with the patient to establish a permanent and behavioral change in eating habits that will reduce the odds that the patient will be back in the doctor's office or emergency room.

The Cost Savings Come From

Greater use of home care services can reduce spending for the same patient population in two ways.

The first – and biggest savings – comes from cost avoidance. These are the costs associated with an ambulance ride to the emergency room, emergency room treatment, inpatient admission, inpatient treatment or procedure, post-acute care or rehabilitation and possible readmission. If care like this can be provided in patients' homes, much of the utilization and cost of acute-care services can be avoided.

The second source of savings is from overhead—bricks and mortar and staff. When the diagnostic tests or medical interventions that can now be performed in the home are performed in the doctor's office or hospital, the patient and his or her insurer also pays for the overhead costs of operating a doctor's office or hospital. Those overhead costs also include the salaries, compensation and benefits of physicians, nurses and other staff available to patients around the clock. There are no bricks and mortar costs at home, and most home care staffing models don't require a full cadre of health team members to be present 24/7.

As the promising results from Medicare's Independence at Home demonstration project can attest, home care can be the alternative care delivery model that can have the biggest impact on health spending by reducing the instances and costs of inpatient hospitalization. It's time to unleash home care's cost-controlling potential on the rest of the health care industry.

Related: Learn more about McKesson's Homecare Solutions

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About the author

Karen Utterback, MSN, RN, is vice president of Strategy and Business Development for McKesson's Extended Care Solutions Group. She is responsible for strategic business planning and opportunities for the Extended Care business within McKesson's Connected Care and Analytics Division.

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