Home Health Adherence Slashes Medicare Costs, Readmissions

The home health care industry has seen consistent reimbursement cuts over the last several years, forcing providers to adapt. There are several reasons regulators and lawmakers think home health can get by with less, but overcoming stigmas about the industry and thinking like an economist can help boost home health’s reputation.

“It’s hard to have conversations with folks in Washington without them talking about home health fraud,” Ian Juliano, CEO of Excel Health, said during the National Leadership Conference in Washington, D.C. last week. The conference was put on by the Visiting Nurses Associations of America (VNAA), ElevatingHome, and the Alliance for Home Health Quality and Innovation.

When looking at the current strategy for reimbursement, many lawmakers and regulators are asking whether the system is optimal for value-based care, Juliano said. To answer this question and prove home health care’s value proposition in the care continuum Juliano says providers “must view home health as an economist [would].”


One way to look at the value of home health care is to prove that it saves costs in the general health care system. Excel Health—which provides market intelligence solutions for home health providers—looked at patients who adhere to their home health care orders versus those who don’t to determine which group had higher costs of care following a discharge.

“Last year, 1.3 million patients were discharged with home health instructions, but only 800,000 actually got the home health orders,” Juliano said, referring to Excel’s study on patient adherence.

Excel examined the value of home health care by analyzing the difference in quality outcomes and Medicare costs between patients that adhered or didn’t adhere to their home health instructions. In general, those that receive home health care and adhere to their discharge instructions have lower 30-day readmission rates.


Within this cohort, Excel looked at 466,670 Medicare beneficiaries and found that on an unadjusted basis, readmission rates were 10 percentage points lower for patients who adhered to home health instructions compared to those who did not. Mortalities were also lower by 5 percentage points, according to the study.

When it came to Medicare costs over a 12-month period, home health-adherent patients cost about $4,000 less than their non-adherent counterparts. These patients also had lower readmission rates, as expected.

“On average, adherent patients had fewer hospital visits compared to non-adherent patients,” said Berna Demiralp, Ph.D., principal researcher of KNG Health Consulting, which worked with Excel Health and ElevatingHome on the study.

While the results prove the savings potential and improved quality of care, there may still be barriers for some patients to access home health care services and adhere to instructions. The results also should help the home health care industry prove its value proposition to lawmakers going forward.

“We feel unequivocally that home health is a modality to save,” Juliano said. “Instead of viewing home health as a cost to be driven down further and view it in isolation, view it as home health playing a role in helping bend the cost curve. If you do not do this research and invest in this research, you’re not going to have much a voice.”

Other studies have also shown that patients who refuse home health care services following a hospitalization are at a higher risk of being readmitted.

Written by Amy Baxter

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