Managing Private Duty Home Care Cost While Improving Quality Through the Effective Use of Supportive Services

The next great wave of change is about to come crashing over the private duty home care health industry.  Managed care for Medicare recipients is moving forward rapidly.  Currently only 9-10% of older adults are enrolled in managed care organizations.  Experts predict that within five years that number may climb as high as 50% or even greater.

People over 65 currently account for 21% of all visits to doctors; for 39% of all hospital days; for 85-90% of all residents in nursing homes; for 75% of all home care visits and for 41% of all health spending in the country, private and public.1   Shifting risk for insuring this population from the government to the private section, primarily through Medicare risk HMOs, will pose major challenges for managed care.  Older adults are living longer but chronic conditions persist, their incidence rising with age.  Activity limitation rates tend to double from age 65 to 85.  Managed care will see fundamental changes in structure when delivering care to a population whose goal may often be improved function rather than cure.

Private duty home care’s growth has been fueled by managed care.  The intent being to replace more expensive in-patient hospital care with cheaper care at home.  As more private duty home care companies contract with managed care, we’ve watched a national game of “Name That Tune” played out in home care.  Instead of “I can name that tune in 8 notes, Bob!”  we’ve heard a chorus of “I can cure that patient in 4 visits, Bob!”.  Yet only 30% of  private duty home care agencies profit under a managed care agreement.2  This acute care paradigm will be challenged as the focus of care planning for the Medicare population moves from episodic, disease related care toward improvement in function and quality of life.

Older persons prefer to age in their own homes, but ability to do so varies.  The Health Care Financing Administration reports that the people most likely to be inappropriately institutionalized are not the physically impaired, but those who depend on others for meals, shopping, managing money, going out and otherwise for routine tasks.  Limitations in ADLs (Activities of Daily Living) and IADLs (Instrumental Activities of Daily Living) have not traditionally been part of an overall plan of care.  Yet over 40% of people over 75 have ADL or IADL limitations.3  To best serve an aging population, we must place a strong emphasis on long-term services that are not necessarily of a medical nature, but require a network of formal and informal care.

Prevention and wellness will play a major role in containing costs and preventing expensive acute care.   The role of private duty home care will become that of case manager; guiding older adults through acute, chronic and lifestyle providers in the complete continuum of care.  In an industry of dwindling resources, home care, often the most knowledgeable yet least costly provider, can become managed care’s most valuable asset.  The key can be effective use of  personal care and support services.

Use of Private Duty Supportive Services

Supportive and personal care services have traditionally taken a back seat to the more challenging, higher margin, skilled services offered by most private duty home care companies. However, as we shift our paradigm from acute to chronic care, we find that in reality, increasing the frequency of personal care and support services often is far more important to the long term success of our clients.  As the lines between illness and wellness blur, as they often do in this population, skilled home care can become an expensive alternative.

We also need to keep in mind that the trend toward rising consumerism dictates an ever-expanding role of the client (patient) him/herself as the director of care.  Personal care products, consumer education, senior housing choices provide older adults with lifestyle options that simply were not available before.  In important respects, home care companies must recognize that consumer directed care is a philosophy and orientation to service delivery; rather than a particular identifiable type of care.  It consciously minimizes a paternalistic “medical” orientation toward supportive services and emphasizes individual autonomy and support of individual preference.  Effective use of supportive services while minimizing the role of high tech skilled services whenever possible meets the goals of consumer directed care and focuses on maximum client function.

To achieve the goal of decreasing private duty home care cost while continuing to improve the quality of care traditional thinking must be set aside.  Consider a senior who needs assistance with some of the activities of daily living, such as bathing, dressing and grooming.  He may also need reminders to insure he is taking his medication as prescribed by his physician.  To force this individual into a medical model and target him as in need of “care” will increase rather than decrease the cost of care and strip him of his independence and quality of life.  If older adults are viewed as individuals who need varying degrees of assistance to maintain optimal state of wellness, the least costly way to delivery that assistance safely should be used.  Cost can be reduced while still best meeting the needs of the client.

Plan of Service in a Functional Model

Developing a thoughtful “plan of service” rather than a traditional “plan of care” is the first step in cost reduction and improved quality of life.  The family, client, provider and payer need to be involved in the development of the plan of service.  If the client has medical needs, the physician is included in that part of the plan.  The physician becomes a member of the team, not the head of the team.  This is an obvious change from the traditional medical model of care where all activity and service is driven by the physician’s plan of treatment.  Historically, if the physician did not direct the care, the payer would not cover the cost.  In delivering quality care to older adults in a cost effective manner, wellness and prevention will be the overall goal for each beneficiary.  Cost reduction will be the result.

A carefully planned and executed Plan of Service can improve the safety and well-being of the client.  When those actions which ultimately cause the older adult to enter the hospital are prevented, then health care expenditures are reduced.  For example, the prevention of one stroke by reminding the client to take his/her hypertension medication can save the payer over $5,000 in hospital costs alone.4  The prevention of one fall by holding the older adult’s hand as they get in and out of the bath tub can save the payer approximately $7,800 in hospital costs.4  Prevention of premature nursing home admission, maintenance of good nutrition, lifestyle counseling and oversight all play a vital role in maintaining independence and promoting quality of life.

In developing a plan of service, the team follows the standard care management outline: assess, plan, implement and evaluate.   As a brief overview:

Assess: The assessment phase is a careful determination of the client’s functional and cognitive ability.  Its cornerstone is assessing the supportive assistance available to the older adult through family, friends or the community.  Other considerations include health status, financial resources, safety  and the client’s own preferences.

Plan: The Plan of Service for every client is individualized and should include the following:

• Coordination with Skilled Services -  If there are skilled services necessary, determine the contact point and best methods of communication.
  
• Personal care -  What assistance will be required with feeding, bathing, dressing, hair care, mouth care, continence care and skin care?
  
• Meal preparation - Who will prepare meals and when?  What accommodations are necessary for special diets?  What are the client’s likes and dislikes?  Are there special religious or ethnic preferences?
  
• Medication reminders - Is the client capable of remembering to take his own medication?  If not, what other systems are available?  When are reminders needed?  Who will maintain the medication box?  Who communicates with the physician?
  
• Assist with ambulation - How many people are needed to assist?  Are any assistive devices used?  What exercise program is needed?  Does the client need to be escorted to meals, doctor’s appointments or outings?
  
• Housekeeping - Can the client maintain his environment?  Does he need help with the laundry?  How much housekeeping is the client able to do?  Who will check the refrigerator and  cabinets for expired food?
  
• Equipment - Is the client using any special equipment such as a safety belt with walking, oxygen or a bedside commode?
  

When developing a Plan of Service the goal should always be to assist the client whenever necessary, not to do everything for them.  Allow clients to participate to the fullest extent possible and avoid creating dependency.  A good Plan of Service promotes wellness and focuses on prevention of functional decline.

Implement:  Implementation of the Plan of Service can achieve both high quality and cost reduction goals.  Matching the level of caregiver with the service to be provided is critical.  Use of the Universal Worker in delivering supportive services is highly cost-effective.  Education of these caregivers in following the Plan of Service and documenting the service provided is important.  Equally important is frequent supervision of the services being provided through announced and unannounced supervisory visits.  Supervisory visits should include review and update of the Plan of Service routinely.  When changes are indicated, staff should be informed by the introduction of a revised Plan of Service.

Evaluate: In a managed care environment the goal of the plan of service is to manage utilization at the highest level of quality while maintaining maximum cost-effectiveness.  In order to be successful we will have to be able to measure and quantify our results through outcomes measurements and data.  The OASIS - Outcomes and Assessment Information Set - data gathering process has excellent applicability in a chronic care environment.  “Improved function” is an allowable outcome rather than cure, for example.  Use of the OASIS system in fact encourages the integration of the divergent philosophies of acute and chronic care management.  To be able to quantify results, home care companies should strongly consider integrating OASIS into their MIS system and use this data to evaluate the plan of service.

Conclusion

Delivering consolidated services and private duty home care to older adults through an integrated network is the wave of the future.  Private duty home care providers should be prepared to actively and quickly negotiate for a role in this new delivery system.  As Will Rogers said, “Even if you’re on the right track, you’ll get run over if you just sit there.”

1.   “National Health Expenditures, 1986-2000.” Health Care Financing Review ,Summer   1987.
2. hhl 1996 reader’s survey.   ...hhl Vol. XXII, No. 6, 2/10/97.
3. National Center for Health Statistics, Special Committee on Aging, U. S. Senate.
4. HCFA Bureau of Data Management and Strategy.  Fiscal Year 1995; 6/96 Update.

About the Authors

Karen South Gunter - is the Illinois Regional Director for LifeStyle Options, Inc. based in Schaumburg, IL.  Ms. Gunter’s background includes 15 years in hospital and homecare administration.  She has published extensively and has spoken both nationally and internationally on the subject of home care.

Molly K. Miceli -  is CEO and founder of LifeStyle Options, Inc., a national company that specializes in services for older adults.  Ms. Miceli’s 20+ years of health care experience includes nursing management, hospital administration and experience as an HMO/PPO executive with a Fortune 100 company.