Home health saves Medicare money despite higher readmissions

MARIA CASTELLUCCI  March 13, 2019

Home health agencies are more likely to experience hospital readmissions compared to skilled-nursing facilities, but their lower service costs still make them a cheaper post-acute care option, according to a new analysis.

The study, published this week in JAMA Internal Medicine by researchers at the University of Pennsylvania, found that Medicare patients discharged to home health had a 5.6% higher 30-day readmission rate compared with patients sent to a skilled-nursing facility, or SNF. Despite that, the authors noted home health saved Medicare $4,514 on average in the 60 days after the first hospital admission because their services cost marginally less than SNFs.

"Readmissions certainly are costs but the lower rates of readmissions (at SNFs) didn't make up for the higher cost of sending patients to SNFs," said Dr. Rachel Werner, lead author of the study and director of health policy and outcomes research at University of Pennsylvania's Department of Medicine

The findings come as Medicare and other commercial payers increasingly push for less spending post-discharge by promoting alternative payment models and value-based purchasing. But even with the popularity of post-acute care, little is known about the differences in patients' outcomes between SNFs and home health, the authors note. This is the first study to compare at a large national scale the differences between the two settings.

To get the results, researchers examined Medicare data from more than 17.23 million hospitalizations that led to a discharge to home healthcare or a SNF from January 1, 2010, to December 31, 2016.

In addition to the readmissions finding, the study found mortality rates and functional status between SNF and home health patients were similar.

Home health agencies likely report more hospital readmissions because they don't benefit from around the clock care available in the SNF setting, Werner said.

SNFs "can both prevent readmissions through continuous patient monitoring and treat conditions that may result in a readmission if the patient were at home," she said.

Hospitals likely prefer to discharge patients to SNFs considering the 24/7 patient oversight, Werner added. Not many hospitals participate in alternative payment models that require lower spending in post-acute care, but all are vulnerable to penalties from the Hospital Readmissions Reduction Program.

"The hospitals that have been focusing on reducing the rate of readmissions and aren't accountable for their total cost of care ... they may prefer SNFs because it looks like a way to reduce readmissions," she said.

Given the fact that outcomes don't differ much between home health and SNFs but the costs do, Werner said there is an opportunity to change how home health is reimbursed to lower the vulnerability for readmissions. Right now, Medicare only pays for one home health visit per day, so the agencies are limited in the extent of services they can provide. If CMS were to expand the number of home health visits it pays for daily, home health agencies could provide more comprehensive services to patients and prevent readmissions.

"You can imagine you can set up a home health benefit that would pay for more intensive care at home ... (and) do some of the treatments at home that SNFs otherwise do, which would be less expensive and more aligned with patient preferences and be better at preventing readmissions," Werner said.

https://www.modernhealthcare.com/care-delivery/home-health-saves-medicare-money-despite-higher-readmissions?utm_source=modern-healthcare-daily-dose-wednesday&utm_medium=email&utm_campaign=20190313&utm_content=article1-headline