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Is home health care in trouble?

Published by Central Oregonian
Steve Kadel
July 14, 2015

People who rely on healthcare delivered in their home may soon find it difficult to get, particularly in the most rural parts of Central Oregon.

Jim Carlson, of Asher Home Health Services in Fossil, estimates that 70 percent of home healthcare service providers in the sprawling Second District served by Rep. Greg Walden (R-Hood River) are losing money. About half of the home healthcare providers across Oregon had negative profit margins in 2013, he said.

Much of the reason is that Medicare home health reimbursement is being cut 3.5 percent each year from 2014 to 2017 – a total reduction of 14 percent. That decision was made by the Centers for Medicare and Medicaid Services as part of the Affordable Care Act.

“This is not a problem with bad management,” Carlson said. “It is a problem with reimbursement, which is primarily Medicare. Thus the solution must be national.”

Walden introduced a bill last year that would stop the home healthcare cuts. The House didn’t vote on the bill before the end of last year’s session, so Walden has been working to reintroduce the legislation.

“Home healthcare allows many seniors in Central and Eastern Oregon to stay out of hospitals or nursing homes and get care in their own homes,” Walden said in an email to the Central Oregonian. “This gives them more control over their healthcare and provides a sense of comfort, familiarity and normalcy for the patients and their loved ones.

“I know this firsthand because it’s a choice my parents made. But now thousands of seniors in Oregon are in danger of losing access to home healthcare services that they depend on due to cuts proposed by the Obama administration. Our bill would put patients and their families back in charge and strengthen the Medicare home health program for both seniors and taxpayers. Oregon seniors must continue to receive this important care on which they rely.”

Asher is the only home healthcare provider in Wheeler County, covering Mitchell and other small communities within a 60-mile radius. Federal funding cuts have caused Asher to reduce programs to keep from closing its doors completely.

Sarah Myers, executive director of the Oregon Association for Home Care, points to the Fossil agency as an example of what’s happening to rural home healthcare providers throughout Oregon and the nation.

“Due to the net losses they are experiencing as a result of recent cuts, their staff is working around the clock without the benefit of sufficient backup, and often at substandard wages, to help seniors receive the clinical treatment they need in the setting they most prefer – their home,” Myers said. “What is just as striking is that home health providers are not even halfway through the unprecedented four-year, 3.5 percent per year cut that is being implemented by the Centers for Medicare and Medicaid Services.

“Without relief soon, even the heroic efforts of providers like Asher will be unable to prevent the large-scale closures that CMS itself has projected.”

Home healthcare workers do such things as administer vaccinations, give medications, change dressings on wounds, check a patient’s blood pressure and temperature, and even help with walking aids or artificial limbs. The care may be provided by a nurse or aide.

Pioneer Memorial Hospital in Prineville offers home healthcare here through the St. Charles Medical System. Holli Holland, director of home health services, said although there isn’t a lot of money to be made in home healthcare they have managed to make the program pay for itself despite the federal cutbacks.

“We are a pretty solid agency,” she said, “although the decrease in reimbursement is always a struggle for any agency regardless of size.”

Holland acknowledged that providers in smaller communities east of Prineville have a bigger struggle to survive than the St. Charles network, which provides at-home care from the Warm Springs Reservation to Madras, Redmond and Bend in addition to Prineville.

She noted there’s a “very large” difference in the cost for a patient spending a day in the hospital versus having a visit for home care. Holland estimated it might cost a couple of hundred dollars for a home visit while a hospital stay could cost several thousand dollars.

Despite the relative success of the St. Charles program, a study by the healthcare policy consultant Avalere Health of Washington, D.C., found the overall profit margin for publicly traded home health companies averaged 2.4 percent in 2014. That was down from a 7.1 percent profit level by those same providers in 2010.

The companies Avalere studied were mainly large providers, and industry officials believe profit margins are even lower than 2.4 percent for small, rural companies. Eric Berger, CEO of the Partnership for Quality Home Healthcare, agrees the problem stems from Medicare cuts.

“As Avalere Health has documented, even the largest home health providers are experiencing low single-digit overall margins,” he said. “If additional cuts occur, further closures and patient dislocation will result, jeopardizing the health and well-being of America’s most vulnerable elderly and disabled Medicare beneficiaries.”

Almost 70 percent of home healthcare patients are seniors, and 60 percent are women, according to the Partnership for Quality Home Healthcare, a trade association representing many home healthcare agencies.

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