Consumers don’t know about home care until they need it, or a family member is receiving it. We often get calls at the American Association for Homecare (AAHomecare) from the press or consumers who have basic questions about home care. Usually we have to start from scratch to explain what home care is, who qualifies for it, who provides it, and how it is paid for. Queries come from family members who need a crash course because their loved ones are about to be discharged from the hospital in need of further care, and they have no clue where to start.

Once they understand, the response is universally favorable: They say, “The home is where I want to be when I need that kind of care.” Of course, it is less costly! So why wouldn’t Congress want to expand it and use it to the maximum extent possible?

Consumers as well as members of Congress are surprised to learn that home care providers can now do everything short of surgery in the home. Home care is the preferred setting for acute, recovering, disabled, chronically ill, and terminally ill persons in need of medical, nursing, or therapeutic treatment; medical equipment; and assistance with essential activities of daily living.

When cutting back home care funding, some members of Congress have said that a narrowly defined benefit has always been what Congress intended. Many US Senators and Representatives, however, are unaware that Congress specifically legislated greater access to home care. As a result of a statutory change in 1980, home care developed from a strictly posthospital service in the original 1965 Medicare legislation to a component of the continuum of care available to those needing more intense services over a longer period of time. The Omnibus Budget Reconciliation Act that year expanded the availability of home care to improve access for medically complex patients, by eliminating the original 3-day prior hospitalization requirement and the 100-visit limit. Congress thereby provided access to care in the home for disabled beneficiaries and those with a number of complex chronic illnesses.

Challenges in 2006
The budget reconciliation bill (S 1932) includes significant changes to capped rental and home oxygen policy and scraps the 2.8% home health update for 2006.

The key objections to S 1932 are:
• the bill eliminates the beneficiary’s option to continue to rent HME;
• it eliminates the capped-rental category, transferring title of the equipment to the beneficiary after 13 months, and terminates the maintenance fee; and
• it makes home oxygen equipment a rent-to-purchase item, forcing transfer of ownership to beneficiaries after 36 months.

All this occurred in a year when the President and the House of Representatives insisted that they would not touch Medicare at all—not because they philosophically opposed cuts—but out of fear of exposing the new Medicare prescription drug benefit to delay, amendment, or outright elimination. At press time, the House had not yet voted a final time on the reconciliation bill.

In early February, the President will deliver his fiscal year (FY) 2007 budget to Congress, just as the Senate and House are finishing up the FY 2006 budget. The Medicare and Medicaid debates will start all over again, but this time the prescription drug benefit will already be in effect and beyond the ability of Congress to delay or eliminate. Any hesitancy about further Medicare program changes and reimbursement cuts will have evaporated.

Medicare and Medicaid, the two biggest Federal health care programs, will surely become the focus of the budget debate in 2006. And why is this all but guaranteed? Because of the 77 million Baby Boomers are rapidly approaching eligibility for Social Security and Medicare.

The Federal deficit was $331 billion in FY 2005 and shows no sign of significant reduction during the current fiscal year. More tax cuts are on the horizon. Homeland security and the war on terror (and in Iraq) must be funded. There has been only a down payment thus far on rebuilding New Orleans and the Gulf Coast post-Katrina, with much more funding to come.

In the face of a persistent sea of red ink, Congressional deficit hawks are getting impatient. Deficit reduction has suffered in the face of increased expenditures and reduced tax revenues. In 2006, look for the deficit hawks to go where the money is—Medicare and Medicaid. (Social Security is an even larger program, but much harder to reform, as the President learned in 2005.)

HHS Support
HHS supports rebalancing between institutional and home-based services. According to the Congressional Budget Office, spending on older Americans in the next 10 years will reach $1.8 trillion per year, nearly half the federal budget, compared to 35% in 2000. By 2015, Medicare will be growing at 8% per year, and Medicaid at 9%. Dramatic growth in Medicare and Medicaid costs is being driven in part by higher institutional expenditures, the very problem that home care is best positioned to address.

Last year, US Department of Health and Human Services (HHS) Secretary Michael Leavitt called for greater use of home and community-based care in Medicaid, and rebalancing of state programs between institutional services and home care, saying, “It’s not only where people want to be served, but it’s radically more efficient.”

On the Medicaid track, HHS understands that home care provides a cost-effective, clinically proven way of receiving quality health services for over 10 million Americans in the setting they prefer. This same “rebalancing” principle should also apply to Medicare and all other health care programs. The motivation for rebalancing may be little more than cutting expenditures, but it still presents us with a great opportunity to demonstrate that not only can home care save money, it is also clinically efficacious.

Home Care is Cost-Effective
Medical literature supports the cost-effectiveness of home care. The National Institutes of Health (NIH) has released two studies showing the cost-effectiveness and clinical efficacy of home care services. In April 2004, the NIH released a study showing that elderly heart failure patients receiving specialized nursing care throughout their hospital stay and at home had a better quality of life and fewer hospital readmissions. The study further stated that the care resulted in a 38% savings in Medicare costs.

Last October, the NIH released another new study on childhood asthma that showed home-based interventions “resulted in significant improvement in health status and reductions in resource use among asthmatic children. Children who received the intervention had 19% fewer unscheduled clinic visits and a 13% reduction in the use of albuterol inhalers.” Furthermore, the study found that the “asthma intervention resulted in an average increase of 37.8 symptom-free days over the 2-year period, at an estimated cost of $27.57 per symptom-free day.”

Also, the Medicare Payment Advisory Commission (MedPAC) recently reviewed the results of a RAND Corp study, which found that home care for knee- and hip-replacement patients yielded positive outcomes and was more cost-effective than therapies provided by skilled nursing facilities (SNFs) or inpatient rehabilitation facilities (IRFs). Compared to the cost of therapies delivered in the home, an SNF episode of care was found to be $3,500 higher and an IRF episode $8,000 higher, the study found. For summaries of more than a dozen studies in JAMA, the New England Journal of Medicine, and other journals, go to AAHomecare’s Web site at www.aahomecare.org.  

Clinically Effective
In addition to its cost-effectiveness, we know that home health care is clinically effective. Home care can shorten inpatient hospital stays, improve functional independence, and reduce the risk of higher-cost institutional placement. It results in overall savings to the health care system without compromising outcomes, and improves patient and caregiver satisfaction.

The highest-cost Medicare beneficiaries have acute medical conditions resulting from multiple chronic illnesses. Though they represent only 20% of the Medicare population, they account for over two thirds of program costs. Home care professionals know how to provide and coordinate care for patients fitting this profile.

Medicare-participating home health agencies have embraced evidence-based best practices, combined with intensive clinical management and telehealth programs, resulting in improved outcomes—as shown by dramatic reductions in hospital admissions, emergency department visits, and hospital length of stay. A pay-for-performance program for Medicare home health agencies, based on publicly reported outcome measures, may get off the ground in 2006 beginning with a pilot. HME providers will not be far behind with regard to pay for performance once quality standards are in place and CMS develops a methodology to capture, measure, and report quality data.

Engage Congress Now
To prepare for the legislative battles ahead, take advantage of every opportunity to communicate the value of home care to your members of Congress, the media in your state and local community, consumers, and the general public. Emphasize that home care is cost-effective, clinically effective, and consumer preferred, and therefore is clearly not the problem. In fact, it is the answer to the spiraling cost of health care in our nation’s health care delivery system.

Talk to members of Congress now about protecting home care from looming cuts when our benefits will continue to be viewed as potential “pay fors.”

Home care providers need more than a sympathetic word and lip service from their members of Congress. They need Reps who are willing to go to bat in the dead of night when deals are being cut, and who are willing to tell party leaders that they cannot support legislation if provisions harmful to home care are included. DP

Why Will the Demand for Home Care Continue to Grow? • An aging population • An increasing number of beneficiaries with disabilities and multiple chronic illnesses • Shorter hospital stays • Technological advances that keep people alive longer • New treatment options (including drug and infusion therapies) • Strong consumer preference

Ann Howard is director of federal policy for the American Association for Homecare, Alexandria, Va. She can be reached via e-mail: ahoward@aahomecare.org.  

Home Health Care Dealer/Provider is proud to welcome Ann Howard as a monthly columnist. Her next article will appear in March.