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There Is No Place Like Home… For Achieving Healthcare Savings

Updated: Jan 10, 2020

As America’s population ages and faces mounting chronic, yet treatable diseases, comprehensive and coordinated home-based healthcare will demonstrate itself an effective and valuable adjunct for conventional outpatient and hospital-based care – and, in some cases, a replacement. Primary care delivered by physicians, nurse practitioners, and other care extenders, as well as behavioral healthcare in a home-based environment, can yield overall cost savings for payers and for the government. In addition, care at home often results in more satisfied, happier, and healthier patients. Let’s take a closer look.

Lower Cost, More Active Patients

The hypothesis seemed counterintuitive. How could delivery of care at home – transporting doctors and nurses all around town – be less expensive than delivering care under one (hospital) roof? Well, as it turns out, intuition can be wrong.

The first randomized, controlled trial comparing home-based care with hospital-based care was published in 2018 in the Journal of General Internal Medicine. The small pilot study demonstrated that home-based care can not only be cost-effective, but it’s a dramatically more affordable alternative compared to inpatient care.

In this study, the control group received care in a traditional inpatient hospital, while the rest of the study participants received a daily visit from an internal medicine physician along with two daily visits from a home-health registered nurse.

Results showed that costs and utilization were significantly less for the patients who received care at home compared to those who received care in a traditional hospital environment.1 In addition, the home-based patients were also more active, spending a median of 209 “active” minutes per day vs. 78 minutes of activity among the hospital patients.

More Value-Based Care Should Mean More Home-Based Care

The move toward value-based care, where physicians and other care providers benefit financially for delivering better health outcomes, could accelerate the adoption of home-based care as a more commonly utilized care delivery approach. The fundamentals of value-based care call for practitioners to take steps aimed at maintaining good health, preventing hospitalization, and minimizing the need for readmission among those patients who require a stay in the hospital. For example, value-based care would support proactive outreach to high-risk patients to ensure medication compliance, to facilitate regular doctor office visits, and to check on patients’ status after they’ve left the hospital.

We contend that value-based care should also embrace the use of home-based care as a central component toward reducing costs and improving health outcomes – particularly for patients with chronic disease whose health status can decline rapidly. The lion’s share of those patients’ costs are spent on hospital-based care, the most expensive care delivery environment and one that leaves patients vulnerable to synchronous health problems including infection.

Incentivizing Home-Based Care Through ACOs

As we’ve already discussed, home-based care can be a valuable tool in the effort toward reducing healthcare costs. And Miami Accountable Care Organizations, or ACOs, are an ideal platform for applying this tool. That’s because they offer participating physicians a financial incentive for achieving healthcare savings.

We believe so strongly in the value of home-based care that we incentivize our physicians to refer patients for home-based care even when the cost of that care is directly borne by our company (as opposed to Medicare). In fact, we apply the same rewards model for all the patients under our care whether they’re attributed to a physician ACO (fee-for-service model) or our company’s full-risk agreements with Medicare Advantage plans.

Home-based healthcare can be more affordable, more convenient, and just as effective as inpatient care. But there’s still work to be done. Miami ACOs and other value-based care models will need to continue to innovate ways to include home-based care in their models for care delivery. In the long run, patients and providers win.


1 Pecci, Alexandra. “HealthLeaders .” Home Hospital Pilot Lowers Acute Care Episode Costs 52%, 27 Feb. 2018,


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