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Kenneth Thorpe Headshot

Cutting Home-Based Care Defies Fiscal and Political Logic

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On November 2nd, voters will head to the polls in what has arguably been the most contentious midterm election campaign in more than a decade. Despite reluctance on the part of some Democrats to campaign on health-related issues, one area presents a fresh window of fiscal and political opportunity to help address the challenges facing our nation's health care system: managing and preventing chronic disease by providing quality-based services to millions of seniors and disabled persons in the privacy of their own homes.

Consider the following: the U.S. Department of Health and Human Services estimates that a typical four-day hospital visit costs more than $20,000. By comparison, a typical three-visit week from a home health-care provider costs significantly less. As the United States recovers from the worst economic recession in decades, we cannot underestimate the extensive savings achieved through in-home health services. Currently, 49 percent of Americans with chronic illnesses are responsible for 75 percent of U.S. health care costs. In-home health care is playing a critical role in bringing these costs down.

The results are both indisputable and real: Diabetics receiving their insulin on a coordinated schedule; Hypertension patients regularly having their blood pressure checked; Heart disease patients getting the medication they need to stay out of costly hospital or nursing home settings. Effective management of chronic disease can reduce hospitalizations and readmissions, clinic and emergency room visits resulting in lower health care spending.

In July, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would result in nearly $20 billion in funding cuts for home health services at a time when America's seniors and disabled need them most. This is on top of $40 billion in home health care cuts as part of the Affordable Care Act (ACA). The cuts are based on a presumption that new coding rules resulted in "up-coding" and higher Medicare payments. However, home health spending since 2000 is lower than CBO spending projections prior to the adoption of the new prospective payment system. Additionally, the proposed rule implements ACA provisions requiring a face-to-face encounter between patients and physicians. While most agree with this basic premise, CMS' proposal (as written) could restrict access to care in many rural areas and place an unnecessary burden on physicians.

To help shift the U.S. from an unsustainable path of hospital-based care to providing essential services in the home, it's critical that CMS reconsider this proposed action.

First, coordinated, home-based care is an important tool for addressing out-of-control health care costs. Between 1996 and 2006, more than three quarters of a million Americans who would have otherwise died remained living thanks to breakthroughs in cancer treatment, many of which are now administered in the home. Each one percent reduction in cancer mortality produces about $500 billion in increased GDP for the economy over a decade (it is estimated that a cure for cancer would be worth $3 trillion to our nation's economy). A ten percent reduction in diabetes-related hospital costs could save just about $100 billion for Medicare within a decade.

Second, in an era of fierce partisanship, home-based health care is an issue that has the potential to unite Democrats and Republicans. According to a recent poll by Democratic pollster Stan Greenberg, three-fourths of likely voters oppose the CMS proposal that would cut nearly $20 billion over the next decade. Additionally, voters do not want to turn to Medicare to reduce the deficit. When provided with arguments for and against the cuts -- the former focusing on deficit reduction -- opposition does not wane.

Third, it's important that we recognize and reward what's already working within Medicare. From 1993 to 2007, in large part due to Medicare-funded services, employment in home health care grew an average of 5.4 percent annually. Since the beginning of the recession, America's health care sector has consistently added jobs while others have shed them.

"Informal" caregivers are also providing invaluable home-based care. In 2007, the estimated economic value of unpaid contributions was approximately $375 billion nationally, up from an estimated $350 billion the previous year.

As policymakers prepare to shift to a post-election mindset, nowhere is there a better opportunity to drive down costs, create jobs and ensure the well being of millions of Americans. While it's clear that health reform will be under scrutiny in the next Congress, the one notion that Democrats and Republicans can all rally behind is that quality, innovative and cost-effective health care begins in the home.