Health Care Institutions - Home Health Care

The concept of home health care began as post-acute care after hospitalization, an alternative to longer, costlier lengths of stay in regular hospitals. Home health care services have grown tremendously since the 1980s when prospective payment (payments made before, rather than after, care is received) for Medicare patients sharply reduced hospital lengths of stay. During the mid-1980s Medicare began to reimburse hospitals using a rate scale based on diagnosis related groups (DRGs)—hospitals received a fixed amount for providing services to Medicare patients based on their diagnoses. This form of payment gave hospitals powerful financial incentives to utilize fewer resources since they could keep the difference between the prepayment and the amount they actually spent to provide care. Hospitals suffered losses when patients had longer lengths of stay and used more services than were covered by the standardized DRG prospective payment.

Home health care grew faster in the early 1990s than any other segment of health services. Its growth may be attributable to the observation that in many cases, caring for patients at home is preferable to and more cost-effective than care provided in a hospital, nursing home, or some other residential facility. Oftentimes older adults are more comfortable and much happier living in their own homes or with family

TABLE 3.8

Mental health organizations and beds for residential treatment by type of organization, selected years 1986–98
(Data are based on inventories of mental health organizations)
Type of organization	1986	1990	1992	19941	19981
Notes: Data for 1998 are revised and differ from the previous edition of Health, United States. These data exclude mental health care provided in non-psychiatric units of hospitals such as general medical units.
1Beginning in 1994 data for supportive residential clients (moderately staffed housing arrangements such as supervised apartments, group homes, and halfway houses) are included in the totals and all other organizations. This change affects the comparability of trend data prior to 1994 with data for 1994 and later years.
2Includes Department of Veterans Affairs (VA) neuropsychiatric hospitals, VA general hospital psychiatric services, and VA psychiatric outpatient clinics.
3Includes freestanding psychiatric outpatient clinics, partial care organizations, and multiservice mental health organizations.
SOURCE: "Table 107. Mental Health Organizations and Beds for 24-hour Hospital and Residential Treatment according to Type of Organization: United States, Selected Years 1986–98," in Health, United States, 2003, National Center for Health Statistics, 2003, http://www.cdc.gov/nchs/data/hus/tables/2003/03hus107.pdf (accessed July 2, 2004)
	Number of mental health organizations
All organizations	4,747	5,284	5,498	5,392	5,722
State and county mental hospitals	285	273	273	256	229
Private psychiatric hospitals	314	462	475	430	348
Non-federal general hospital psychiatric services	1,351	1,674	1,616	1,612	1,707
Department of Veterans Affairs medical centers2	139	141	162	161	145
Residential treatment centers for emotionally disturbed children	437	501	497	459	461
All other organizations3	2,221	2,233	2,475	2,474	2,832
	Number of beds
All organizations	267,613	272,253	270,867	290,604	266,729
State and county mental hospitals	119,033	98,789	93,058	81,911	63,769
Private psychiatric hospitals	30,201	44,871	43,684	42,399	34,154
Non-federal general hospital psychiatric services	45,808	53,479	52,059	52,984	55,145
Department of Veterans Affairs medical centers2	26,874	21,712	22,466	21,146	13,742
Residential treatment centers for emotionally disturbed children	24,547	29,756	30,089	32,110	33,997
All other organizations3	21,150	23,646	29,511	60,054	65,922
	Beds per 100,000 civilian population
All organizations	111.7	111.6	107.5	112.1	99.1
State and county mental hospitals	49.7	40.5	36.9	31.6	23.7
Private psychiatric hospitals	12.6	18.4	17.3	16.4	12.7
Non-federal general hospital psychiatric services	19.1	21.9	20.7	20.4	20.5
Department of Veterans Affairs medical centers2	11.2	8.9	8.9	8.2	5.1
Residential treatment centers for emotionally disturbed children	10.3	12.2	11.9	12.4	12.6
All other organizations3	8.8	9.7	11.7	23.2	24.6

members. Disabled persons may also be able to function better at home with limited assistance than in a residential setting with full-time monitoring ("Home Health Care," Family Economics and Nutrition Review, vol. 9, no. 2, 1996).

Home health care agencies provide a wide variety of services. Services range from helping with activities of daily living, such as bathing, light housekeeping, and meals, to skilled nursing care, such as the nursing care needed by AIDS or cancer patients. About 20% of the personnel employed by home health agencies are registered nurses, another 7% are licensed practical nurses, and 13% are nursing or home health aides. Other personnel involved in home health care include physical therapists, social workers, and speech-language pathologists.

In 1972 Medicare extended home care coverage to persons under sixty-five years of age only if they were disabled or suffered from end-stage renal disease (ESRD). Prior to the year 2000, Medicare coverage for home health care was limited to patients immediately following discharge from the hospital. By the year 2000 Medicare covered beneficiaries' home health care services with no requirement for prior hospitalization. There were also no limits to the number of professional visits or to the length of coverage. As long as the patient's condition warranted it, the following services were provided:

• Part-time or intermittent skilled nursing and home health aide services
• Speech-language pathology services
• Physical and occupational therapy
• Medical social services
• Medical supplies
• Durable medical equipment (with a 20% co-payment)

Over time, the population receiving home care services has changed. Today much of home health care is associated with rehabilitation from critical illnesses, and

TABLE 3.9

Home health care patients, by age, sex, and diagnosis, selected years 1992–2000
(Data are based on a survey of current home health care patients)
Age, sex, and diagnosis	1992	1994	1996	1998	2000
Notes: Current home health care patients are those who were on the rolls of the agency as of midnight on the day immediately before the date of the survey. Rates are based on the civilian population as of July 1. Diagnostic categories are based on the International Classification of Diseases, 9th Revision, Clinical Modification.
SOURCE: "Table 87. Home Health Care Patients, according to Age, Sex, and Diagnosis: United States, Selected Years, 1992–2000," in Health, United States, 2003, National Center for Health Statistics, 2003, http://www.cdc.gov/nchs/data/hus/tables/2003/03hus087.pdf (accessed July 2, 2004)
	Number of current patients
Total home health care patients	1,232,200	1,889,327	2,427,483	1,881,768	1,355,290
	Current patients per 10,000 population
Total	47.8	71.8	90.6	69.6	48.7
Age at time of survey:
Under 65 years, crude	12.6	21.0	27.8	25.0	16.4
65 years and over, crude	295.4	424.9	526.3	375.7	277.0
65 years and over, age adjusted	315.8	449.6	546.6	381.0	276.5
65–74 years	151.7	209.1	240.1	202.0	130.2
75–84 years	398.3	542.2	753.6	470.3	347.6
85 years and over	775.9	1,206.1	1,253.4	885.4	694.1
Sex:
Male, total	32.6	47.8	60.9	47.9	35.1
Under 65 years, crude	10.9	17.8	22.1	22.9	15.6
65 years and over, crude	219.2	303.1	386.4	255.2	199.6
65 years and over, age adjusted	255.8	350.0	438.3	277.6	216.4
65–74 years	121.8	169.9	187.0	159.7	100.7
75–84 years	322.0	427.5	598.7	321.4	270.0
85 years and over	635.2	893.1	1,044.3	653.0	553.9
Female, total	62.4	94.7	118.9	90.4	61.8
Under 65 years, crude	14.3	24.2	33.6	27.0	17.2
65 years and over, crude	347.4	508.9	623.9	460.4	332.6
65 years and over, age adjusted	351.5	506.6	615.0	445.8	315.5
65–74 years	175.3	240.6	283.2	236.3	154.6
75–84 years	445.3	614.5	854.0	568.8	400.4
85 years and over	830.7	1,327.6	1,337.0	981.7	754.9
	Percent distribution
Age at time of survey:
Under 65 years	23.1	25.7	27.0	31.3	29.5
65 years and over	76.9	74.3	73.0	68.7	70.5
65–74 years	22.6	20.6	18.4	19.7	17.3
75–84 years	33.9	31.2	35.3	29.9	31.3
85 years and over	20.4	22.4	19.4	19.1	21.9
Sex:
Male	33.2	32.5	32.9	33.6	35.2
Female	66.8	67.5	67.1	66.4	64.8
Primary admission diagnosis:
Malignant neoplasms	5.7	5.7	4.8	3.8	4.9
Diabetes	7.7	8.1	8.5	6.1	7.8
Diseases of the nervous system and sense organs	6.3	8.0	5.8	7.6	6.1
Diseases of the circulatory system	25.9	27.2	25.6	23.6	23.6
Diseases of heart	12.6	14.3	10.9	12.3	10.9
Cerebrovascular diseases	5.8	6.1	7.8	5.1	7.3
Diseases of the respiratory system	6.6	6.1	7.7	7.9	6.8
Decubitus ulcers	1.9	1.1	1.0	1.2	1.9
Diseases of the musculoskeletal system and connective tissue	9.4	8.3	8.8	8.3	9.8
Osteoarthritis	2.5	2.8	3.2	2.7	3.5
Fractures, all sites	3.8	3.7	3.3	4.0	4.1
Fracture of neck of femur (hip)	1.4	1.7	1.3	1.1	1.5
Other	32.7	31.8	34.6	37.5	34.9

fewer users are long-term patients with chronic conditions. This changing pattern of utilization reflects a shift from longer-term care for chronic conditions to short-term, post-acute care. Compared with post-acute care users, the long-term patients are older, more functionally disabled, more likely to be incontinent, and more expensive to serve.

In 2000 nearly 1.4 million persons received home health services. Women outnumbered men two to one and more than two-thirds of all home health care recipients were age sixty-five or older. The number of home health care patients per ten thousand population increased with advancing age, and CDC data revealed that nearly 10% of women age eighty-five and over used home health care services. (See Table 3.9.)

Medicare Limits Home Care Services

From 1990 to 2001 annual Medicare spending for home health care rose from $3.7 billion to $4.2 billion. Relaxed eligibility criteria for home health care, including elimination of the requirement of an acute hospitalization before receiving home care, enabled an increased number of beneficiaries to use services. Home health care utilization among those over the age of sixty-five peaked in 1996 and began to decline during 1997.

The Balanced Budget Act of 1997 (PL 105-33) aimed to cut approximately $16.2 billion from the federal government's home care expenditures over a period of five years. The act sought to return home health care to its original concept of short-term care plus skilled nursing and therapy services. According to Medicare's administrator, Nancy-Ann DeParle, some of the 4.8 million Medicare beneficiaries who received home health care would lose certain personal care services, such as assistance with bathing, dressing, and eating.

The Balanced Budget Act sharply curtailed the growth in home-care spending, greatly affecting health care providers. Annual Medicare home health care spending fell 32% between 1998 and 1999 in response to tightened eligibility requirements for skilled nursing services, limited per-visit payments, and increasingly stringent claims review. The changes forced many agencies to close and transfer their patients to other home-health companies. Nationwide, the Centers for Medicare and Medicaid Services (CMS, formerly known as the Health Care Financing Administration or HCFA) estimated that twelve hundred agencies went out of business during 1998.

Nonetheless, the aging population and financial imperative to prevent or minimize institutionalization—hospitalization or placement in a long-term care facility—combined to generate increasing expenditures for home health care services. Even though home health care decreased from 5.5% to just 2.9% of Medicare expenditure from 1999 to 2001, Medicare expenditures for home health care more than tripled from $1.2 billion to $4.3 billion during the same period. (See Table 3.10.)