Self-directed care undeniably has a place in the future of home-based care.
How big that place is, however, is still up in the air.
There are many benefits to offering self-directed or consumer-directed care, especially for patients who would rather be cared for by a caregiver of choice. States see it as a win-win because it lowers the cost of care and gives families their preferred option.
At the same time, it can be susceptible to fraud and can put providers, payers and patients in vulnerable positions.
The pros
Traditionally, personal care providers will recruit, hire and place caregivers in an individual’s home for care.
Self-directed care providers will allow seniors and people with disabilities to choose their own non-medical caregiver. Often, those caregivers are family members or friends.
Then, those chosen caregivers are generally paid out by state Medicaid programs.
The dramatic rise in consumer-directed care is not just evident in the home-based care space, but in the health care world at large.
Following the COVID-19 pandemic, patients had to take care into their own hands due to pressures on the U.S. health care system. Plenty of companies took notice of that and rode the wave as coordinators and directors of that care format.
Consumer Direct Holdings (CDH) is one of the largest self-directed personal home care companies in the country. The company has seen substantial growth because of its bet on the value of self-directed care.
“There are a ton of different parts of value, depending on where you are in this network and in this community,” CDH CEO Ben Bledsoe recently told HHCN. “The biggest value of self-direction is in the control that you give to someone receiving services. That’s in a client who wants to be more involved and more engaged in those day-to-day services or supplements that they’ve assigned as the representative. When you have someone that’s more engaged in those services, they get to make all those choices and live the life that they want to live.”
CDH acts as a back-end platform that facilitates and manages the compensation for those self-directed caregivers. Because of that, CDH and other similar providers usually have lower overhead costs.
That, Bledsoe said, allows the company to scale at a quicker rate.
“When someone in the home is serving as that managing employer, it’s much more scalable,” Bledsoe said. “We can also pass on some of those cost savings to caregivers. The low-wage worker, that very important job of being the person who actually does the hands-on work, we can usually afford to pay caregivers a little bit more and reward them for the important work that they do.”
The cons
On the flip side, there are many who still see self-directed care as an area ripe for fraud.
“It’s tough because personal care – by definition – happens in people’s private residences,” Bill Hammond, senior fellow for public policy at Empire Center, told HHCN. “There’s usually not a third party there to supervise or even to verify that it’s happening.”
Hammond offered up an example.
“Let’s say you hire your niece and your niece doesn’t show up,” Hammond said. “Are you going to rat her out? Are you going to call the state and say, ‘Don’t pay my niece this week because she didn’t show up?’ In fact, your niece and you may have an agreement that she’s not going to show up ever. She’s going to get paid somewhere between $15 and $20 an hour [through Medicaid] while she works another job.”
Federal prosecutors have been busy cracking down on some of these Medicaid schemes in the past, Hammond said. These aren’t so much as hypotheticals as they are semi-regular occurrences brought on by the rise of self-directed care.
These gaps in the honor system can also muddy the waters when it comes to quality of care.
“As this happens, the state is none the wiser because the patient is not complaining about it,” Hammond said. “Consumer-directed care has been one of the fastest growing forms of personal care, and if you increase wages [for caregivers], you make that kind of fraud all the more profitable. So that’s the danger.”
Bledsoe argues that with today’s technology, such as electronic visit verification, fraud in self-directed care is not a widespread issue.
“Bigger fraud, I would argue, is more on those systemic levels,” Bledsoe said. “We’ve seen agencies that are just bad players. That’s no different whether it’s in traditional personal care or self-directed home care. There’s no real evidence in either place, and we are very aware of this perception.”
The need is there
Despite the pros and cons of self-directed care, there’s no denying the need for it.
Self-directed care can sometimes lack the resources provided through a traditional setup, however, according to a recent study from the University of Kansas.
At the same time, the study’s authors found that the success of self-directed care is dependent on several market factors.
“The self-directed care model is premised on the value of self-determination in allowing home and community-based service consumers to manage their own care with flexibility and according to their individualized care needs and preferences,” the authors wrote. “However, our findings demonstrate that in actual practice, self-determination and choice is severely limited by workforce shortages, funding structures and state regulations.”
In order for self-directed care to take up a bigger slice of the pie, state regulations will have to be in lock-step while providers — like CDH — police themselves against fraud.
“We have an aging population in the U.S., emerging needs and a gap in income that exists in the country as well,” Bledsoe said. “Growth comes down to the workforce. Self-direction opens up a new doorway for that workforce. Do I think self-direction will grow? I am 100% certain that self-direction will continue to grow. It’s been growing at a faster rate than traditional personal care.”
Companies featured in this article:
