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Costs much lower if elderly patients receive home care

Report provides hard data to bolster case for community rather than institutional settings

Public Health Reporter;
Source: National Evaluation of the Cost-Effectiveness of Home Care

Toronto Globe and Mail: Monday November 29, 1999

Toronto -- Governments can cut treatment costs for elderly patients by as much as half by providing care in the community instead of in institutions, according to a groundbreaking new study.

Home care saves the health-care system money regardless of the severity of patients' condition, as long as they are stable, researchers found. It is only when patients are unstable, and move frequently from home to hospital, that it is more efficient to keep them in an extended-care facility, according to research being released today.

"The central finding of this study was that, given two clients with the same level of needs, the best value to government comes from supporting the client at home," said Dr. Marcus Hollander, the principal investigator.

While this has long been the contention of the home-care movement, this is the first study to offer scientific evidence and hard data.

The numbers are striking, demonstrating that each patient cared for in the community rather than in a facility saves the system an average of $8,000 a year. The research demonstrates that these savings are realized even when costs related to home care are factored in, such as more emergency-room and physician visits, higher prescription-drug use, homemaking services and adult daycare.

"Nobody has ever seen numbers like this before. The results are pretty robust and, I think, meaningful," Mr. Hollander said.

He said the clear message for governments is not only that home care is a good investment but that there is a need to focus on services and programs that keep clients stable and at home.

The research shows that costs skyrocket each time there is a transition, such as from home to emergency, or from home to a nursing home or extended-care facility. For example, almost half the costs of home-care patients were related to occasional visits to acute-care hospitals.

The study also confirms that most moves from community care to institutional care are precipitated by an event, such as a fall. (Falls are the leading cause of hospital and nursing-home admission and one of the leading causes of death among the elderly.) When a person's condition deteriorates gradually, it is far more cost-effective to keep them at home even at the palliative stage, according to the study.

The research was conducted in British Columbia because the province is one of the few jurisdictions in the world that uses a standardized classification system for all elderly patients who enter the system, whether they are assigned to home care or institutional care.

"That allows us to do something we can rarely do in the health-care system: to compare apples with apples," said Mr. Hollander, a Victoria-based consultant. His study is the first of 15 planned by the federal government under the rubric of the National Evaluation of the Cost-Effectiveness of Home Care.

In the United States, research has shown that home care was not a cost-effective alternative to institutional care. Because the United States has an insurance-based model, patients tend to be accepted or rejected based on their plans, Mr. Hollander said. In Canada, with a universal health-care system, administrators can steer patients to the most appropriate type of care and maintain a broad range of options, all at a lower cost, he said.

"The Canadian system allows you to make policy choices that maximize cost-effectiveness. You can't do that in an insurance-based system," Mr. Hollander said.

Costs were compared across five levels of care, based on patients' ability to carry out daily activities such as bathing, dressing and eating.

At the lowest level of need -- a person requiring non-professional assistance -- it cost an average of $5,413 annually to care for a patient at home, compared with $12,504 in a facility.

The home-care figure for a light-needs patient included $649 for drugs, $1,356 for homemakers and $2,173 for hospital visits. When a patient was living in a facility, drug costs and hospital costs were lower, $525 and $982 respectively, and homemaking costs were nil, but overall costs still higher.

At the highest level of care -- a functional disability that requires nursing care almost around-the-clock -- the average cost was $33,579 at home and $41,023 in an institution.

High-needs patients at home used more drugs than those in institutions ($859 versus $163 a year), their homemaking costs, at $9,909 annually, were significant and their emergency room visits were dramatically more costly ($19,024 versus $834) due largely to numerous transitions. Yet basic provision of services in an institution, at $39,300 annually, still cost more than all home-care expenditures combined.

Nationally, governments spend $2.1-billion annually on home care, about 4 per cent of public-health spending. By comparison, they spend $7-billion a year on long-term care facilities and $26-billion on acute-care hospitals.

According to Statistics Canada, 523,000 adults, or 2.4 per cent of the population, received home care in 1994-95, the most recent year for which statistics are available. The majority of users, 64 per cent, were seniors.

About 335,000 people aged 65 or older are home-care users. Another 185,600 are living in institutions or nursing homes.

A long-term analysis of utilization rates by people over the age of 65 included in the new B.C. study shows some interesting trends.

About 113 of every 1,000 seniors receive home-care services, up sharply from 87 per 1,000 in 1983. Admission to long-term care facilities, on the other hand, has dropped sharply from 72 per 1,000 to 50. Meanwhile, admissions to extended-care facilities has held steady at about 17 per 1,000.


Average annual costs in British Columbia

                                                  Home care as a

                                                   percentage of

Level of care  Home-care costs  Facility costs  institutional care

Personal care       $5,413         $12,505            43%

Level 1            $10,242         $20,186            51%

Level 2            $16,081         $23,597            68%

Level 3            $21,786         $29,001            75%

Extended care      $33,579         $41,023            82%
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