Demographics: The Aging of Society
The chart above demonstrates the acceleration of our country’s aging population. According to the U.S. Census Bureau, the number of people age 65 and older will more than double between 2010 and 2050. By the year 2050, approximately 50,000,000 individuals age 75 or older will be living in the United States—a group that represents some of the highest medical needs.
Disability is a major concern of our aging population. As the chart above depicts, those with severe disabilities as well as those who need assistance with basic activities of daily living (feeding, walking, bathing, transfers) increases dramatically with advanced age. For example, over 30% of all individuals age 80 and older require assistance. This rapidly-increasing population is the highest user of costly hospital and nursing home services.
The Medicare and Medicaid Fiscal Crisis
U.S. health care spending reached an astonishing $3 trillion in 2014. This represents 17.5% of GDP – and demonstrates a growing fiscal crisis for our country.
Medicare is facing insolvency by 2030. Medicaid was the largest component of state budgets in 2015, consuming 27.4% of total state spending, compared to the mere 19.3% spent on elementary and secondary education. In 2013, Medicaid spent $146 billion on long-term services and support, representing 34% of expenditures. Medicaid also pays for over half of the nation’s total spending on nursing homes.
Reducing readmissions through innovative models such as transitional care interventions could dramatically reduce costs and respond to the spiraling costs to Medicare.
Health Care Reform
Health Care Reform has highlighted some of the most costly health care-related expenses today and challenged organizations to take steps to reduce them. These include hospital readmissions and effective management of patients with expensive chronic conditions. Even if health care legislation changes, these high expense areas remain a burden to our system, prompting providers to search for new and better approaches to effectively reduce costs.
The chart below shows that the costliest 1% of patients consumes 23% total health care costs at a median cost of $97,859 per patient. The top 5% of costliest patients consume 50% of total costs. Finding a way to effectively target these top tier spending groups has the greatest potential for cost savings.
Federal Rebalancing Legislation:
HBPC Supports Current Health Care Legislation
Federal rebalancing legislation provides incentives for states to increase home and community-based services with the goal of reducing nursing home placements. Programs that support this legislation provide financial and practical support for patients to remain in their home or transition from nursing homes back into the community. They also have created added demand for home and community-based services (HCBS) like HBPC practices.
The chart above shows how federal rebalancing legislation has increased spending for home and community-based services. In 2013, these services accounted for over 50 percent of Medicaid LTSS, resulting in an increase in funding for home-based services and spending decrease for institutional services. The numbers clearly demonstrate the demand for HBPC services if the programs are in place to support it.
Replacing Hospital and Nursing Home Services
A number of peer-reviewed journal articles have proven the value of home care medicine, showing that HBPC reduces the need for expensive nursing home and hospital services.
An October 2014 article in the Journal of the American Geriatrics Society analyzed the Veteran Health Administration’s HBPC Program, which began more than two decades ago and currently provides in-home health care to over 30,000 veterans with chronic conditions.
In 2002, the program decreased total costs by 24% due to HBPC, amounting to over $9,000 savings per veteran. (See table below). The article also analyzed the program’s 2007 data and found a remarkable 59% reduction in hospital days, an 89% reduction in nursing home days and a 21% reduction in 30-day readmissions.
See Full Text: Home Care Medicine’s Perfect Storm