Which is a better value, a home nurse or a nursing home?

The Choose Home Act of 2021, under active consideration by the US House and Senate, aims to give Medicare recipients post-acute care choice that has not existed before. In summary, this legislation enables consumers to return home to receive services that, till now, would only be available through skilled nursing home care.  With a doctor’s approval, a patient could be discharged home with home-based extended care services including home health care, remote patient monitoring, telehealth, and home modifications equal to the level of care a nursing home would provide.  In addition, the patient could also receive home delivered meals, transportation services, medical social services, home health aide services, respite care, caregiver support services, and training and education.

This Act has set off a heated debate in the senior care industry.  Major nursing home lobbying groups adamantly oppose this change.  The pandemic has left this industry in disarray including inadequate staff, low morale, low occupancy rates, and negative press on infections and deaths.  Many see this legislation as an additional threat to their existence such as this statement in the Skilled Nursing News:

“AHCA/NCAL strongly supports rational population health framework approaches to offer beneficiaries preferred care options,” a statement sent to SNN said. “However, we adamantly oppose cutting skilled nursing benefit day and coinsurance coverage protections, that have been in place for decades, to finance an untested expansion of the home health benefit.”

Cost Analysis

The Genworth Cost of Care Survey reports a daily average rate of $290 per day, or $8,821 per month for a nursing home stay and $141 per day, which translates to $4,300 per month for an assisted living facility stay.  What senior living on a fixed income has $105,000.00 in long-term care insurance coverage or personal assets to pay for a one-year stay in a nursing home?

Home-based care cannot be calculated as neatly as all-inclusive residential care.  According to SeniorLiving.org, “typical homemaker services cost about $147 per day, home health aides cost $150 per day, and for 10 hours of work, a typical registered nurse would make $352. In most cases, these types of services are not needed all day or even every day.” At first glance, it appears that a home nurse would be more expensive than a nursing home day ($352 versus $290) but a home nurse would not provide a full eight hours of care.  Family caregivers are most likely the most consistent Carer in this home-based care model.


Proactive Long-Term Care Services

This legislation strives to tackle the cost of care not just for one admission and discharge but across the lifespan of the Medicare recipient.  This new program engages the Aging and Disability Resource Center to establish a relationship to proactively address the social determinants of health of the individual as well as providing home-based extended care. The legislation states:

“Care coordination and integration, including providing discharge planning and care transitions support to the individual and family and other unpaid caregivers, including referral for person-centered counseling or options counseling from their State’s Aging and Disability Resource Center/No Wrong Door System, upon completion of a 30-day episode or one or more subsequent 30-day episode or episodes, if applicable, under section 1812(a)(6)(C). To the greatest extent possible, care transitions support services provided as part of home-based extended care services should use evidence-based models and practices, particularly those that employ face-to-face visits.”

A residential care stay will not engage the Aging and Disability Resource Center or rarely any other community-based program to ensure that a return home is safe and sustainable.  In fact, the residential care industry likes repeat business from those who cannot succeed at home.

More Services, Lower Cost

If the calculations are accurate, this new option can slow the drain on the national treasury.

The Partnership for Quality Home Healthcare commissioned a 2020 study by Dobson/Davanzo Health Economics Consulting Firm on the potential savings of this new approach. Dobson/Davanzo used claims data from both SNF (skilled nursing facility) and home healthcare claims to evaluate the savings of the home-based extended-care services. The conclusion reads: “These annual savings would accrue to $1.6-2.8B over ten years. This represents a 0.5-0.9% overall reduction in relative to SNF expenditures over the period.”

Commissioned Study

Home Nurse or Nursing Home

Each person, each situation, each condition needs to be evaluated to answer this question.  The new Choose Home Care Act adds to the options for post-acute care.  Surveys consistently show that most senior adults desire care at home.  The Hill’s survey demonstrates that both democrats and republicans support this option.  In fact, they report that 94% of Medicare beneficiaries surveyed favored the Choose Home Care Act.

If It’s Not Broken, then Don’t Fix it

How many times have you heard “If it’s not broke, don’t fix it.” Which is how I am reading the statements opposing this legislation. However, I see the Choose Home Care Act as the opportunity to fix what is broken.  The quality of residential care varies.  Medicare does pay for the first twenty days with a physician order but after that, and if complications arise, the burden quickly falls to the Medicare recipient and their family.