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For the first time in decades, U.S. health care spending may have actually decreased in 2020, new data suggests.
Several factors likely contributed to the potential decrease, according to nonprofit research and consulting firm Altarum, which released a preliminary analysis of last year’s national health spending on Tuesday. Such factors include year-over-year declines in hospital and nursing home care, along with an increase in home health care.
“[Spending] on prescription drugs and home health care actually increased for the year, the latter likely related to individuals selecting home care rather than nursing homes to avoid exposure,” the Altarum analysis reads.
“This is the first time we’ve actually seen negative growth, or a decrease in spending, using this preliminary data,” Corey Rhyan, a senior analyst with Altarum, told Home Health Care News. “It’s a significant finding, though, it’s very dependent on how some of the underlying data is going to play out.”
Similarly, spending on physician and clinical services was down 4.3% on a year-over-year basis.
Largely due to the COVID-19 virus and widespread efforts to keep vulnerable populations out of congregate settings, spending on nursing home care decreased by 2.5% in 2020 compared to 2019, according to Altarum. Meanwhile, spending on home health care jumped by an estimated 2%.
While that statistic reflects the important role that home health providers have played since last spring, it’s not entirely surprising. The “shift to home” has been happening in a gradual manner of the past several years, Amedisys Inc. (Nasdaq: AMED) CEO and President Paul Kusserow told HHCN.
“While the pandemic certainly accelerated the transition away from facilities to home care, the transition has been underway for some time,” Kusserow said. “Care in the home is the most economical for all payers. It’s where patients want to receive their care — and it has proven, quality outcomes.”
With roughly 21,000 employees and 415 care centers across the U.S., Baton Rouge, Louisiana-based Amedisys is one of the largest home health and hospice companies in the country.
Moving forward, spending on home health care is also likely to increase due to the possible evolution of the home health benefit itself.
Today, home health care is often seen as a post-acute care service, even though just one-third of patients actually go to home health care following an institutional stay. In the future, policymakers may seek to make the benefit more all-encompassing and flexible.
The Partnership for Quality Home Healthcare (PQHH) has been working diligently to make that happen, executive director Joanne Cunningham told HHCN.
“We’re actually exploring this from a policy standpoint — maximizing the home health benefit so all Medicare beneficiaries have access to the services they need,” she said.
The government’s investment in home health care may also rise as a further cost-saving necessity.
“I think COVID has shown us the vulnerabilities of some of the institutional care settings and taught us valuable lessons about how we, as a country, do a better job managing care,” she said.