Home-Focused Area Agencies on Aging Proven to Reduce Medicare Spending

Through partnerships with local hospitals, Area Agencies on Aging (AAA) can lower annual Medicare spending by roughly $136 per beneficiary, a new study unveiled Monday in the journal Health Affairs has found.

AAA organizations offer local services that allow adults to age in place, including in-home care and support. Some of these organizations are affiliated with local government entities while other AAAs function independently.

In some ways, the results serve as yet another reminder of the benefits of in-home care in relation to lowering costs and improving the overall health of older adults.


It’s an especially important reminder at this point in time, too, as the U.S. health care system and policymakers try to carve a path forward amid the COVID-19 pandemic.

“AAAs play an active role in connecting people who need home health services with providers, and in fostering communication between acute care and home health providers,” Amanda L. Brewster, an assistant professor at the University of California Berkeley and one of the study’s authors, told Home Health Care News. “These results support the value of the variety of services home health providers offer to older adults in their communities.”

As part of the Health Affairs study, researchers examined measures data from the National Survey of AAAs, in addition to data on health care utilization and spending for seniors in the counties served by AAAs.


Researchers noted that while AAAs were first established almost 50 years ago, there has been an uptick in partnerships between these entities and health care organizations in an effort to support older adults.

Broadly, these partnerships present an opportunity for AAAs to help older adults with complex medical needs and for health care organizations to address social needs, according to the study.

“When AAAs started partnering with health care organizations, we saw subsequent reductions in health care use and spending,” Brewster said.

Aside from the impact on Medicare costs, researchers found that partnerships between AAAs and mental health organizations resulted in a 0.5% decrease in potentially avoidable nursing home use in the counties being served.

Additionally, AAAs that were funded participants in livable community initiatives saw potentially avoidable nursing home use decrease by 1%.

Identifying older adults who may not need nursing home care could mean these services are shifted into the home, according to Brewster.

“As livable community initiatives mature and as they are able to bring in funding for partners such as AAAs, you see a reduction in nursing home residents who have low-care needs,” she said. “We were able to narrow in on individuals who don’t need a lot of extensive assistance, and who could potentially be cared for at home.”

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