Study Suggests Cuts to Home Care Services Increase Other Long-Term Care Costs

Cutting funding from Illinois’ home care services will likely increase other long-term care costs, and will make it harder to respond to the growing needs of the aging baby boomers, researchers found after studying the possible impact of proposed cuts to the state’s Medicaid budget.

In February 2012, Governor Pat Quinn (D-Ill.) proposed to cut $2.7 billion from the state’s 2013 Medicaid budget by gouging Medicaid programs and providers. But cuts in Medicaid support for home care services will undermine the home care network that’s needed to help Illinois shift away from more institutional care, said the Center for Long-term Care Reform at Health & Medicine Policy Research Group in a May 2012 study

Patients who receive health care services at home after a hospitalization have been linked with lower post-hospital costs and readmissions, according to an Avalere Health LLC study on the impact of home health on Medicare spending and rehospitalizations. 

Multiple other studies across the nation reinforce findings that home health care can be a more cost-effective post-acute care setting compared to institutional settings, points out the Center for Long-term Care Reform, so cost-savings generally aren’t achieved when funding for these programs is cut.

Besides, Illinois’ Medicaid home health reimbursement rates are already the lowest in the nation, as providers are only reimbursed $61.34 of each visit’s $154 cost. 

“Home health providers are already having a hard time staying in business,” says the Center. “Continuing cuts to providers will put agencies out of business—depleting community resources and making access to home care more difficult.”

Instead of cutting funding for home health, Illinois needs to invest in its home care network by raising reimbursement rates and exploring potential cost-savings through the use of tele-health, the Center for Long-term Care Reform recommends. 

“Home care has a proven place in an effective and efficient health system—research shows that when states invest in home health, hospice and home care support services their total LTSS costs decrease; when states cut these home care services, Medicaid costs rise due to increased hospital, emergency room and nursing facility use,” the researchers concluded. 

Read the full study here

Written by Alyssa Gerace

Alyssa Gerace



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