January 1, 2014 marked the start of many proposed Medicare cuts to Home Health Agencies’ reimbursement. The plan is a 14% reduction over the next four years. Not surprisingly, there has been uproar from these organizations, who point to the tremendous value they create for the US Health Care market.
Some experts believe Home Health has actually saved the US $2.8B over the last three years by enabling shorter stays in Hospitals / SNFs and reduced readmissions. The average Home Health visit is $145 versus the average $373 per night in a Skilled Nursing Facility (SNF) or $1,805 in a Hospital. Not only is it much cheaper, patients enjoy the experience. After all, what’s better than being in the comfort of one’s home – 80% of Home Health patients rated their experience as a 9 or 10 (out of 10).
Home Health’s ability to unlock value is fairly clear, however, like most everything else in US Health Care it is over-utilized and inefficient. As we at FORCE Therapeutics have written about, US Health Care has reached a point where costs absolutely MUST be reduced. Because we have come to the brink, no one is safe from cuts (save for Primary Care Physicians, who there are not enough of and will probably see steadily increased pay and opportunity).