REPORT: Cuts to Home Health Increase Long-Term Healthcare Costs

The Report

Health & Medicine Policy Research Group’s Center for Long-Term Care Reform published a recently released a report titled “Medicaid Home Care Cuts: Analysis of Unintended and Unnecessary Consequences.”

The report was issued in response to a proposed Illinois state budget that calls for $2.7 billion in cuts to the state Medicaid program – including home healthcare funding – in 2013.

The Findings

  • Cuts to Medicaid support for home care services weaken the home care network, which is needed to help shift patients away from more expensive institutional care settings.
  • Reductions in home healthcare funding are associated with an increase in hospital, emergency and nursing facility utilization. Thus, Medicaid cuts for home care services will cost the state government more in the long run, and also make it harder to respond to the growing needs of aging Baby Boomers.
  • More specifically, the report cites an Avalere Health study that found that post-hospitalization home health services are associated with significantly lower post-hospital costs and hospital readmissions.

The Implications

Medicaid home care cuts result in an overall increase in Medicaid expenditures because of cost shifting to more expensive institutional care settings.

Instead of proposed cuts, Illinois lawmakers should look for lasting solutions, such as programs to encourage the use of cost-effective home- and community-based care, reduce more expensive institutional long-term care services and generate cost savings – as seen in the VA’s Home Based Primary Care (HBPC) program, the Community First Choice Option or Ohio’s proposed Integrated Care Delivery System (ICDS).



Final Rule: VA HBPC Eliminates Co-Payments for Tele-Health

Recognizing the home as a preferred place of care for veterans, the U.S. Department of Veterans Affairs yesterday released a final ruling that eliminates patient co-payments for in-home video telehealth care through its Home Based Primary Care (HBPC) program (read the final rule here).

VA first proposed the rule to eliminate co-pays in March 2012. With no significant opposition, the rule took effect May 7.

About the HBPC Program
The HBPC program was created in 1972 to serve veterans with chronic conditions by focusing on providing a home-based approach to healthcare. The program is an excellent example of the value and efficiency of home health. According to a presentation at the 2011 National Health Policy Forum, the program has:

  • Reduced hospital days by 62%
  • Reduced long-term care days by 88%
  • Reduced total healthcare costs by roughly 24%

For more information on the successes of the HBPC program, click here.

Why the Ruling Matters
VA has realized that co-payments can shift patients to more costly settings and increase healthcare costs. The removal of co-payments for in-home video telehealth care allows more veterans to receive clinically advanced and cost-effective care in their homes. Indeed, the barrier that might have previously discouraged veterans from using in-home video telehealth care has been removed, thus the VA hopes more users will turn to this option.

The final rule is yet another example of how the VA is advancing patient-centered policies to ensure Veterans are receiving clinically advanced, cost-effective care. This is why home healthcare leaders are encouraging lawmakers to closely consider the HBPC program as a model for future Medicare reforms.

Read More
Tom Berger, Executive Director of Vietnam Veterans of America (VVA) and John Rowan, President of the Board of Directors at VVA wrote an op-ed that appeared in Roll Call on May 8 commending the Department of Veterans Affairs Home-Based Primary Care System as a model for other programs. To read the full op-ed, click here.