Home Care Can Save Big Bucks for Medicare, Says Home Health Alliance

The cost of Medicare payments more than doubles after one hospital readmission, and home health care may be a way to combat those costs, The Alliance for Home Health Quality and Innovation (the Alliance), an organization comprised of home health care providers and organizations reports in its Clinically Appropriate and Cost-Effective Placement (CACEP) research project. 

Post-accute care patients cost Medicare $15,00 each, and after one hospital readmission that cost more than doubles to roughly $33,000, according to the Alliance.

As patients with a higher number of chronic conditions often require more hospital readmissions the Alliance cites home health care as a service that could help maintain both high and low severity conditions.This health maintenance could help reduce a number of initial and subsequent hospital readmissions, potentially saving money for Medicare. 


“The data suggest that better management of chronic disease across all three settings through home health intervention could enable more patients to remain out of the hospital following an initial admission,” said Teresa Lee, executive director for the Alliance. “Home health care combines the right mix of care management, prevention training and close observation to significantly reduce hospital admissions.”

Hospital readmissions, regardless of the severity, cost significantly more than initial hospital visits. By providing better coordination and more consistent care though home care, low-severity conditions can be addressed outside of facilities and unnecessary hospitalizations can be avoided, according to the Alliance. 

Research for the CACEP includes research on episode frequency, payments and patient pathways of claims of a sample of Medicare beneficiaries from 2007 to 2009. The project will conclude in September with the release of a final paper analyzing Medicare savings opportunities through changes in delivery systems. 


Written by Erin Hegarty