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Home Care: A Critical Health Care Reform Solution

As Congress debates how to squeeze savings from the health system to pay for health care reform, it is again looking to cut what is already the smallest and arguably most cost-effective sector — home medical equipment and services. It’s no secret that the Obama administration and Members of Congress have been eyeing Medicare’s HME sector. This is the sector that provides medical oxygen, respiratory therapy, hospital beds, wheelchairs, walkers and other equipment and services that allow people to get the care they need at home instead of in a hospital or nursing home. [IMGCAP(1)]When policymakers struggle with how much to cut home care, they overlook another, quieter debate held around dinner tables throughout the country: What is the best way to care for a family member who has an illness or a disability that requires medical equipment or care? To make the best choice, families consider the medical needs and condition of their loved one, their desire to remain independent, and the financial cost. It is crucial that home-based care remain a viable choice for families. Current proposals under consideration in Washington will undoubtedly limit Americans’ choice to access home medical equipment and services. But what many policymakers don’t realize is that further cuts to this sector are also likely to increase Medicare costs over time because they will force more people into nursing homes and hospitals and spur more frequent visits to emergency rooms. If legislators are serious about lowering Medicare costs, they should understand that home care is actually a cost-effective alternative to more expensive forms of care, and should therefore be a critical component — not a casualty — of American health care reform.Access to quality home medical equipment reduces health care costs. A recent study in the New England Journal of Medicine demonstrated that up to one-fifth of all Medicare patients are readmitted to hospitals within one month of being discharged. These unplanned visits cost Medicare an estimated $17 billion in 2004. One reason for the high readmission rates is that there is no continued interaction and guidance once patients are dismissed. Home medical equipment providers help to fill this gap by smoothing the transition from hospital to home with the equipment and services patients need. Most home medical equipment costs just dollars a day. The cost of providing the equipment and service for home oxygen, for example, is less than $7 per day under Medicare. Compare that to the average daily cost of about $200 for a nursing facility and more than $5,000 per day for a hospital stay under Medicare.Yet the home medical equipment sector has been subjected to a long series of deep and disproportionate reductions in Medicare reimbursements in recent years that are having a negative impact on the quality of care Medicare beneficiaries and their physicians have come to expect. Already in 2009, Medicare payments for the most commonly prescribed home medical equipment categories have been cut by 9.5 percent. That includes complex rehabilitative power wheelchairs and accessories. This cut in reimbursement is having a negative impact on the quality of equipment and the level of services that providers are able to furnish to consumers who have severe disabilities and who are in greatest need of mobility products and services.Medical oxygen reimbursement has also been cut by 27 percent so far this year. Home oxygen is a critical, life-sustaining medical treatment prescribed to nearly 1.5 million Medicare patients each year who suffer from respiratory illnesses such as chronic obstructive pulmonary disease.Home medical equipment and service is already the most cost-effective slowest-growing portion of Medicare spending, increasing only 0.75 percent per year, according to the latest National Health Expenditures data from Medicare. That compares to more than 6 percent annual growth for Medicare spending overall. Moreover, home medical equipment represents only 1.6 percent of the Medicare budget.Another measure aimed at cutting HME costs further has been labeled “competitive— acquisition. A regulation enacted in the final hours of the Bush administration would selectively contract with a small number of home care providers based on a race to bid the lowest payment. Even among those who agree to new bid-determined payment rates, Medicare only allows a select few to provide the items, which will have the long-term result of reducing the number of companies competing to offer home care products. These and other efforts to cut away at the home care sector not only reduce patient choice and access to quality equipment and services, but they are also counterproductive, in that they will increase Medicare costs over the long term. Quality home medical equipment and services facilitate hospital discharges, reduce hospital readmissions and emergency room visits, and help to keep seniors and people with disabilities out of more expensive institutional settings. As Congress debates health care reforms, it is important that it keeps these facts in mind and recognizes home care as a partner in improving the quality of American health care and reducing costs.The full choice of home care options should be considered a viable solution to —not a necessary sacrifice for — health care reform.Tyler Wilson is president and CEO of the American Association for Homecare.

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