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Pennsylvania Home Health Agencies Reduce Medicare Costs, Prevent Rehospitalizations

According to a new report released by Dobson DaVanzo & Associates, a national research and health policy firm based in Washington, D.C., the use of home health care following a hospital stay can reduce Medicare costs and decrease the number of rehospitalizations. The study, which analyzed all 2013 claims for Pennsylvania's Medicare beneficiaries, calculated the average Medicare spending and rehospitalizations over a 90-day episode of care for 10 MS-DRGs where home health was the first setting of care following a hospital stay. Data indicates that when home health care is ordered by a physician following a hospital discharge, there are significantly lower Medicare costs, as well as fewer rehospitalizations.

For example, more than 40% of patients discharged from the hospital following a hip or knee replacement received home health. These beneficiaries had 60% lower Medicare costs ($5,483 vs. $13,821) at the end of a 90-day episode of care than those treated in other post-acute care settings, such as inpatient rehabilitation or skilled nursing facilities. These patients also had about 40% fewer related readmissions (6% vs. 10%) than those who went to other post-acute care settings.

"As Pennsylvania transitions to managed long-term services and supports (MLTSS) with Community HealthChoices, it is more important to recognize the value of home health, not only to the Medicare and Medicaid programs but also to the patient, who always wants to be at home," said Vicki Hoak, PHA CEO. "As we make the fundamental shift in health care away from basing payment on volume of services to the value of services, this report demonstrates how receiving services in the home is cheaper and excels in keeping people out of the hospital."

PHA encourages members to pull data from this report in their efforts to prove the value of home health to potential partners, ACOs and MCOs.

Click here to download the report.

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