Solutions to Cut Health Care Costs at the Local Level

Solutions to Cut Health Care Costs at the Local Level

Because of the health care reform law, each state in the U.S. faces a possible expansion of their Medicaid program. The Affordable Care Act (ACA) changes the Medicaid eligibility threshold, but the federal government will initially cover the added costs. However, after three years that federal help goes away. That means state governments need ways to cut costs now so they do not face budget shortfalls in the future.

One population covered by Medicaid where state governments can look to save when it comes to the budget includes the elderly and infirm.

Business Owners

“Home care is in a position to help state governments much more efficiently and effectively allocate dollars to taking care of the elderly,” said Wes Carson, owner of the Homewatch CareGivers office in Portland, Ore. “By and large, states tend to group seniors and those with developmental disabilities together. Home care is in perfect position to help keep costs low for those populations.”

In addition to the elderly, these populations include those who are eligible for Medicaid and live with conditions that create difficult behaviors which, in turn, could threaten their living situations. A person living with a chronic condition that causes mood swings could be thrown out of public housing due to their problematic behaviors. Highly-trained caregivers can help mitigate these issues. This keeps people in their homes and it keeps a state’s costs down because the government does not have to search for other, more costly solutions.

Medicaid Expansion

Next year, the ACA expands eligibility for Medicaid to people making up to 138 percent of the poverty level. That new level equals about $32,500 a year for a family of four. States usually pay about 50 percent of Medicaid costs, but the ACA mandates that the federal government pick up the entire cost the additional individuals included in the expansion for the first three years. After that, the state share for the expanded population would gradually rise to just 10 percent by 2020 and stay there (USA Today – March 26, 2013).

The federal government is just starting the process of talking with each state about expanding their Medicaid programs. While many governors resist the plan, Health and Human Services Secretary Kathleen Sebelius says the expansion will reduce unpaid medical costs. She says the average American pays an extra $1,000 a year in insurance premiums to cover costs of the uninsured at hospitals (USA Today – March 21, 2013).

A study of costs by StateHealthFacts.org shows that more than 30 percent of overall U.S. Medicaid spending is on long-term care. That number is dramatically higher in some states. In Connecticut, long-term care accounts for more than 48 percent of Medicaid spending. In New Hampshire and Iowa the number is at 43 percent. Ten other states hover right around 40 percent.

If states turn to home care agencies for assistance, it can help lower those costs. Home care providers help people maintain healthy lifestyles and avoid pitfalls that can cause hospitalizations. This includes reducing a person’s fall risk, reminding people to take medication, helping them follow dietary guidelines, and making sure they go to follow-up doctor’s appointments. In this way, home care agencies give state governments solutions at the local level.

“While health care reform and affordable care and hospital readmissions are national issues that pertain to the health care industry and all involved, at the end of the day, the individuals that need help are local, and the businesses that need to help them are local,” Carson said.

Benefits of Education & Training

The issue then becomes teaching state governments about what home care agencies can offer. While not all home care agencies have Medicaid certification – most rely on a private-pay system – Carson’s Homewatch CareGivers office does. The next step is to exhibit that home care agencies can not only help people recover following a hospital stay or the development of a chronic condition through senior home care or home help services; they also help keep people healthy in the first place.

One way to ease the concerns of state governments is by demonstrating that each in-home caregiver is backed by experience and a quality training platform. Homewatch CareGivers is backed by more than 30 years of experience and uses the professionally-developed Homewatch CareGivers University to train caregivers. The University teaches caregivers the specifics of various chronic illnesses, teaching caregivers the particulars of each condition so they are better prepared. Because of this higher-level of knowledge, it allows more customization of client care. For example, a person with diabetes can be aided by a caregiver trained in their distinctive needs

“This is particularly important when you look at the chronic conditions that drive up costs in the medical system. We have very specific training on those primary conditions and many Homewatch CareGivers offices have a nurse on staff who augments caregiver training so it’s specific to our clients. So our care is at a very high level,” Carson said.

Establishing Communication

The best way to create new relationships between state governments and home care agencies is to bring them both to the same table. This goes beyond state governments understanding the services home care agencies can provide. It means home care agencies must also learn about the cost structures involved and how the state measures quality. With this in-depth understanding, it can only contribute to success in effectively helping people in their homes and keeping them healthy.

“Communication is huge and understanding the quality measures is huge. It’s the most important thing in the network of care partners. If we know the key metrics for our client for their particular conditions, and we assist in monitoring those metrics, it gives states data that can use to measure outcomes. If we see changes in the client’s condition that may suggest changes in the client’s health, our care partners will want to know. It’s back to trying to keep people in their homes by maintaining their health through the services we provide,” Carson said.

Through this sort of communication, states can rely on health care providers to take action and limit costly hospitalizations.

Staying at Home is the Best Solution

The simple truth is that when people are able to maintain a healthy environment at home, it is less of a financial drain to the organization responsible for the cost. In terms of Medicaid, that means state governments. With the ACA’s expansion of Medicaid, state governments face the monetary responsibility of many more people. While Sebelius believes the expansion will save states money, there is no guarantee that will be the result. Even if it does save money, state governments will always want more options to keep expenses lower. That entails avoiding hospital stays, since these often result in the most expensive health care fees. This is why home care gives states such a potential-rich answer when it comes to budgets.

“The most important aspect of keeping someone healthy and out of the hospital is what happens in their home, and we are perfectly positioned to help with that. The challenge is helping others in the industry understand the role we can play in helping them meet their goals in terms of keeping costs down and getting better outcomes,” Carson said.

Click here to find the Homewatch CareGivers office in your community.

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