Stating Our Case

By the time you read this, the 2006 elections will be over, and the outcome will have a far-reaching impact on our industry.

In addition, CMS will have issued its final regulation on the new payment rules and method for home oxygen therapy, to be effective Jan. 1, 2007, and is about to issue the final rule on competitive bidding, scheduled to begin implementation in October 2007. Finally, news of whether CMS will improve the coverage and payment rules for power wheelchairs will be fresh off the press. Interesting times indeed.

With the sheer volume of Medicare policy changes affecting the major segments of our market, the question is how can we, in the longer term, change the perception of policy-makers to understand that home care is truly part of the solution? Keeping people with chronic or acute conditions out of institutions is not only patient preferred but, more important for policy-makers, it is far more cost-effective.

The answer is two-fold. First, as an industry we must devote resources to engage in a serious image campaign. Second, we need to work on developing objective and statistically valid data that provides substantive evidence that home care provides all the benefits we intuitively know; and then we need to communicate that information effectively.

In looking over the last few years, perhaps one of the greatest ironies we are faced with is the obvious contradiction between Medicare policies and payment cuts to home care and the efforts that a small number of states are pursuing that encourage greater use of home care. These few state programs are founded on the understanding that relying more on home health care than institutional care brings benefits to both the state’s coffers and its citizens.

Data from these states can serve as the start of building a compelling case to demonstrate that not just states, but the federal government through the Medicare program, should change policies to gain similar significant cost and human benefits.

A program in the state of Vermont is probably the best example. Vermont is one of the first states to obtain approval from the federal government to offer home care as an option equal to nursing home care under Medicaid.

In what has been described as an unusual “experiment,” Vermont has created a program called “Choices for Care.” To create more home care workers, the Medicaid program gives poor seniors the choice of whether they would prefer to remain in their homes and receive care or go into a nursing home or other institution. Under the home care option, the state pays family members to care for aging relatives at about $10 an hour.

According to Vermont, it costs the state about $122 a day for a senior to be cared for in a nursing home or other institution; it costs about $80 a day to provide that same senior care at home. That’s a 34 percent savings.

According to a Wall Street Journal article, “If Vermont’s program works, it could influence a wider change in the multibillion-dollar industry that cares for the aged.” Vermont’s commissioner of the state’s Department of Disabilities, Aging and Independent Living was quoted as stating, “We are never going to build another nursing home … It is an outdated model.” How long will it take other states to follow suit?

Nationwide, most of the government money spent each year to care for the elderly goes to nursing homes. In 2005, state Medicaid programs spent $38 billion on institutional care for the elderly, or 82 percent of the long-term care budget. In contrast, only $8 billion, or 18 percent of the total, was spent for home or community-based care.

Progress is incremental. The balance has improved slightly, according to a CMS analysis of costs over the last five years. In 2002, 87 percent went to institutional care, and 13 percent went to home or community care.

This summer, CMS announced a series of grants to states totaling $1.75 billion to encourage them to do what Vermont is doing: find alternatives to institutional care. Perhaps the day is coming closer when more states will implement programs that don’t just make available but actively encourage the home care option as an alternative to institutions.

A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is vice president, government relations, for Invacare Corp., Elyria, Ohio. Bachenheimer previously worked at the law firm of Epstein, Becker & Green in Washington, D.C., and at the American Association for Homecare and the Health Industry Distributors Association. You can reach her by phone at 440/329-6226 or by e-mail at [email protected].