Contradictory Policymaking Has Led To Costlier Care: The Future of Health Care Is In The Home

The following is an op-ed submitted by: Ken Albert, CEO, Andwell Health Partners; David Causby, CEO, Gentiva; Marcylle Combs, CEO, MAC Legacy; Brent Korte, CEO, Frontpoint Health; John Olajide, CEO, Axxess; Billy Simione, Managing Principal, SimiTree; Jennifer Sheets, the former CEO of Interim HealthCare; Susan Ponder-Stansel, CEO, Alivia Care; David Totaro, Chief Government Affairs Officer, BAYADA; Sara Wilson, President & CEO, Home Assist Health; and Bryan Wolfe, the former CEO of Traditions Health

---

As the nation faces a debt ceiling of $34 trillion and climbing, it’s no surprise that the federal government is under pressure to find ways to cut program costs and crack down on overspending.

What is surprising is that the program they continually target in budget cutbacks has an impressive record of saving the government billions: Medicare-certified home health care.

Though home health care helps nearly 36 million 65+ and permanently disabled Americans recover at home and avoid costlier placements in institutions, the Centers for Medicare & Medicaid Services (CMS) has initiated deep cuts to the Medicare home health industry, totaling $25 billion in cuts over the next decade.

Government-funded health care programs like Medicare, Medicaid and Medicare Advantage (MA) home health are closely connected in how they are financed.

This is because Medicaid and Medicare Advantage have such insufficient funding to begin with, forcing providers to rely on Medicare to cover the shortfall to offset the costs incurred in treating patients under Medicaid and Medicare Advantage – a decade-old system that is severely flawed and requires all three programs to ride on the backs of one another for financial stability.

The solution is two-fold: First, CMS must stop cutting Medicare home health care funding. Cutting funding year after year has only created turmoil in the very industry that is essential in providing stable, in-home care for vulnerable Americans.

Second, CMS and the Medicare Payment Advisory Council (MedPAC) must seek to develop new policy approaches that account for Medicare’s cost-savings and support a sustainable funding model for Medicare, Medicaid and MA. This two-fold solution will ensure that purported federal efforts to save money and cut programs are not done so to the detriment of millions of seniors and adults with permanent disabilities.

As funding cuts continue, the costs of business and operations increase, leaving home health providers forced to either cut wages, services and coverage areas or shut their doors altogether. This ultimately costs Medicare more money by pushing patients into costlier institutional settings while simultaneously risking health outcomes.

Medicare home health patients have better health outcomes and are at less risk for rehospitalization. Since COVID, we have seen a substantial shift in America’s future of health care as more evidence has shown home to be the safer and more comfortable setting. Without fixing the flawed system, vulnerable Americans won’t be able to access this option of care and our government will be forced to spend even more money.

To put it into perspective:

It costs $2,010 per month to care for a patient at home for 30 days under home health care.

A skilled nursing facility costs an astronomical $16,500 for that same care.

That’s a cost savings of approximately 88% for every patient diverted from a skilled nursing facility and cared for at home. Put another way, we can care for eight people at home for the cost of caring for one person in an institution.

Why does the federal government continue to put a target on the back of an industry that has shown to be a win-win for both patients and the federal budget?

Year after year, these seemingly baseless funding cuts destabilize the nation’s ability to move health care into the home, and further our growing debt. The federal government should be fixing this broken system by taking the money Medicare home health care saves and reinvesting it into a practical funding model that supports providers’ ability to expand access to these essential services.

In its Strategic Framework plan, CMS claims to have a “commitment to ensuring all American people have access to the highest quality health care.” The home health industry undeniably operates within that commitment, keeping America’s vulnerable populations cared for in the patient-preferred, cost-effective setting. We are finding it increasingly difficult to see how the federal government has lived up to that same promise.