Examining efforts to lower cost of caring for seniors at home

Photo by Boris Bartels via Flickr

It’s long been known that 5 percent of all Medicare patients account for more than half of Medicare spending.

In addition, the top 1 percent of the sickest and most vulnerable Medicare patients consume 23 percent of Medicare resources, largely because of the severity of their illness but also because their conditions frequently are not managed well. Repeatedly they travel a painful journey among hospital emergency departments, nursing homes and hospital readmissions, in the process racking up huge medical bills, exposing themselves to hospital-acquired infections and bedsores. In the process, they often lose control of their lives.

Historically, the U.S. health system has grappled unsuccessfully in treating this population of often homebound Americans. They are among the poorest (averaging between $5,000 and $10,000 annually in income) and sickest. Most have two to five chronic conditions, have been hospitalized or admitted to nursing homes one to three times annually and have trouble performing activities of daily living.

The average cost of treating the top 5 percent of beneficiaries exceeds $50,000 per patient, while treating that sickest 1 percent costs around $90,000 per beneficiary annually.

Two recent demonstration programs funded by the Centers for Medicare and Medicaid Services (CMS) and the National Institutes of Health (NIH) offer promising results in improving the health of this population and reducing the escalating costs of their treatment.

Some respected health care leaders shared strategies in caring for this vulnerable segment of the senior population during a session at Health Journalism 2017, “New Efforts to Keep Seniors Living Independently.” Panelists included Thomas Cornwell, M.D., who is chief executive of Schaumburg, Ill.-based Home Centered Care Institute and founder of HomeCare Physicians Northwestern Medicine; and Sarah Szanton, Ph.D., A.N.P., a researcher and assistant professor of nursing at Johns Hopkins University.

Cornwell and his medical group have made more than 32,000 house calls over 23 years. A recent CMS house-calls demonstration project called Independence At Home (IAH) is credited with saving $25 million in 2015 alone (an average of $3,070 per beneficiary) while reducing hospital readmissions, hospitalizations, and ER visits, he said. The demonstration program has since been extended.

The quality of care in the program improved in all measured areas such as medication reconciliation, with follow-up calls within 48 hours of discharge and documented advanced care wishes. Providers participating in the program were able to claim a portion of the Medicare savings.

To qualify, Medicare beneficiaries must have two or more chronic illnesses expected to last more than one year, a functional disability that prevents them from performing two activities of daily living (ADLs) such as bathing or cooking, and a hospitalization or skilled nursing facility admission within the past year.

Cornwell pointed out that the Independence at Home Act of 2017 was introduced in the U.S. Senate in February. If it becomes law, house calls would become the first major new patient benefit since the Medicare Prescription Drug Improvement, and Modernization Act in 2003.

Both Cornwell and Szanton spoke of the challenges and rewards of caring for their patients and helping them to attain their goal of living independently at home for as long as possible.

Szanton created the CMS demonstration program known by the acronym CAPABLE (Community Aging in Place, Advancing Better Living for Elders). The program’s goal was to save Medicare and Medicare money by improving the health and function of those seniors and avoiding nursing home and hospital admissions and ER visits.

Over a five-month period, homebound CAPABLE program seniors received up to 10 home visits from a nurse, an occupational therapist and a handyman, who worked to make their homes safer. By monitoring their care, treating symptoms and educating patients to improve their functions, more than 75 percent of CAPABLE patients reported improving their self-care and saw reductions in home hazards and symptoms of depression.

The average cost of the five-month demonstration was $2,825 per participant and yielded a 3-to-1 return on investment of nearly $10,000 in annual savings in medical costs. The average cost per participant was less than a one-week stay in a nursing home. The program also is being piloted in California, Colorado, Maine, Michigan, North Carolina, Pennsylvania and Vermont. Szanton’s program was highlighted in the March 2017 issue of Health Affairs.

Szanton described a recent study she led of 77,000 Maryland “dual-eligibles,” who are patients receiving benefits from both Medicare and Medicaid. The study found that access to the state/federal food stamp program known as SNAP (Supplemental Nutrition Assistance Program) was the primary factor in preventing those sick and elderly citizens from admission to nursing homes.

The study revealed that those enrolled in SNAP:

  • Had 23 percent lower odds of nursing home admission than counterparts who did not receive SNAP benefits.
  • Received an additional $10 of SNAP assistance per month, which was associated with lower odds of nursing home admission.
  • When admitted to a nursing home, stayed fewer days than typical.

The average annual cost of Maryland nursing home care was $28,360 for those admitted in 2012. Enrolling those 25,018 non-SNAP participants to receive food stamps would have saved Maryland’s Medicaid program $34 million in nursing home costs in 2012.

Szanton, a nurse practitioner, cited studies that estimate more than five million seniors are food insecure. “As we get older, we are closer to having something tip us into a hospital or nursing home,” she said. “But having enough food just seems basic.”

Medicare and Medicaid spent nearly $90 billion in 2015 for nursing home and post-acute care skilled nursing facilities. Nursing home expenditures often comprise 25 percent or more of state Medicaid budgets, according to federal National Health Expenditures data and the Kaiser Family Foundation.

Journalists may want to explore their community’s efforts to help low-income and homebound seniors remain at home, including the cost/benefit, hospital and nursing home readmission rates and the proportion of older adults receiving supplemental nutrition support or another innovative home- and community-based service.


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