For anyone who has spent time in a hospital for an illness, injury, or other health issue, you know that being discharged is typically a welcome event—your condition has improved enough to no longer require acute care. However, in this day and age of managed healthcare, the decision to discharge a patient also takes into account insurance limits and costs, sometimes leading to patients being discharged sooner than they’d like—”quicker and sicker,” as they sometimes say in the healthcare industry.

There is a common belief that many patients—for example, people who have had a stroke or a joint replacement—are better off getting additional post-acute care and rehabilitation services at home, rather than in a hospital or skilled nursing facility. And there are some solid reasons for this thinking: The risk of acquiring an infection in a healthcare setting is higher than in one’s own home, for instance.

But a big factor for the decision to send a post-acute patient home to continue their recuperation is cost. Many insurance companies, including Medicare, believe it will be less expensive to provide medical and rehabilitation services in a private residence than in a healthcare setting like a skilled nursing facility. But is this really true?

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Recovering at home or in a skilled nursing facility

A recent study explored this question. Researchers from the University of Pennsylvania and the University of Chicago looked at Medicare data of more than 17 million hospitalizations. They compared the outcomes of post-acute patients who were discharged to skilled nursing facilities or discharged to a home with the assistance of home healthcare workers.

The researchers found that those post-acute patients who went home had a higher 30-day rate of hospital readmission, however they had a significantly lower Medicare cost for their original hospitalization, all post-acute care, and their subsequent hospital re-admissions. The study revealed no significant differences in 30-day mortality rates or improved functional status between those who went home and those who went to a care facility.

So, in summary, the researchers found that there is some cost savings to Medicare when patients are discharged from the hospital to a private home for their post-acute care, but there was little benefit to the patient, and there was even some additional risk since hospital re-admissions were higher.

But I think there are a few key factors that this study fails to account for when it comes to the perceived cost-savings of recuperating and rehabilitating at home.

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The level and frequency of care

Patients who receive post-acute care in a skilled nursing setting are typically receiving 24-hour care. By comparison, post-acute patients who are recovering at home may receive just a handful of one-hour visits a week from a physical or occupational therapist and a home healthcare provider—a caregiver who may be less credentialed than the providers in a skilled nursing facility (perhaps a certified nursing assistant [CNA] or a licensed practical nurse [LPN]).

To fill in the gaps in care, those patients who are at home may get some help from a home care aide (who may have no formal healthcare credentials), however Medicare will only pay for a limited number of hours of this type of assistance each week. The remainder of necessary help will likely have to be provided by an unpaid family member (most of whom will have no formal healthcare training), or the patient will have to foot the bill for additional professional assistance.

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The odds of a hospital re-admission

When comparing these two care scenarios—recovering at home versus in a skilled nursing facility—it becomes clear why sending a patient home is less expensive to Medicare, but it also makes sense that those patients are more likely to require a hospital readmission.

Patients in a skilled nursing setting are continuously being monitored by care professionals, who are trained to address many issues before they escalate into more serious health events that require hospitalization.

By contrast, for those being cared for at home by family members and aides, who are only seeing a trained home healthcare provider a few times a week, an issue can go undetected for longer. As a result, the condition may become more serious before it is noticed and addressed, thus requiring a trip to the hospital.

On the flip side, loved ones without medical training—who are likely tired and stressed as a result of their caregiving duties—are more apt to call 911 for an issue, some of which may not truly require emergency care.

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The cost to Medicare vs. the patient

Finally, let’s consider costs. The study out of the University of Pennsylvania and the University of Chicago found that Medicare spent roughly $5,000 less over a two-month period on patients who received their post-acute care at home as compared to those who recovered in a skilled nursing setting. So yes, the home care option is less expensive in the eyes of Medicare. But this isn’t an apples-to-apples comparison.

According to research from Genworth’s Cost of Care Survey, the current average monthly cost of a private room in a skilled nursing facility is around $8,600—that’s a hefty price tag. But as mentioned above, patients in a skilled nursing facility are getting access to a higher level of care and are receiving that care 24/7.

For home healthcare services, the monthly cost is much lower: just over $4,300 for a home health aide (again, someone who can provide care services but may have no formal medical credentials). But here is the key distinction: That price is for only 6 hours of care per week. Someone else may have to cover the additional hours of required care—either an unpaid loved one or a caregiver paid for out of the patient’s pocket. And that expense can add up quickly.

Paying the price for care

As they say, there’s no place like home, but when it comes to receiving post-acute care, this may not be the case. Those who recover at home typically receive an overall lower level of care services and for fewer hours per week, leaving family members to either fill in the gaps themselves…or pay someone else to. Additionally, home care patients are more likely to have a readmission to the hospital.

So yes, it may cost Medicare a little more for people to recuperate in a skilled nursing facility, but those patients are receiving a higher level of round-the-clock care from trained professionals, and as a result, are less likely to require a return trip to the hospital. And that may just be worth the extra cost.

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