Purpose of the Study: To compare acute care outcomes and costs among nursing home residents with community-dwelling home health recipients. Design and Methods: A matched retrospective cohort study of Alabamians aged more than or equal to 65 years admitted to a nursing home or home health between March 31, 2007 and December 31, 2008 (N = 1,291 pairs). Medicare claims were compared up to one year after admission into either setting. Death, emergency department and inpatient visits, inpatient length of stay, and acute care costs were compared using t tests. Medicaid long-term care costs were compared for a subset of matched beneficiaries. Results: After one year, 77.7% of home health beneficiaries were alive compared with 76.2% of nursing home beneficiaries (p < .001). Home health beneficiaries averaged 0.2 hospital visits and 0.1 emergency department visits more than nursing home beneficiaries, differences that were statistically significant. Overall acute care costs were not statistically different; home health beneficiaries' costs averaged $31,423, nursing home beneficiaries' $32,239 (p = .5032). Among 426 dual-eligible pairs, Medicaid long-term care costs averaged $4,582 greater for nursing home residents (p < .001). Implications: Using data from Medicare claims, beneficiaries with similar functional status, medical diagnosis history, and demographics had similar acute care costs regardless of whether they were admitted to a nursing home or home health care. Additional research controlling for exogenous factors relating to long-term care decisions is needed. With an aging U.S. population, finding the optimal setting for long-term care is an issue many older Americans and their families must confront. Nine million older Americans were estimated to have needed long-term care in 2012, and the number is projected to increase 33% by 2020 to 12 million (U.S. Department of Health and Human Services, 2012). In the United States, Medicaid is the primary means for financing long-term care services, and traditionally, most spending is on institutional care (Doty, 2000; Health Policy Institute, 2007). Policymakers in the future must not only increase overall capacity of long-term care systems but also address the issue of resource allocation to provide long-term care in other settings than nursing homes. For some adults, nursing home care is unavoidable, but many older adults prefer to remain in the community as long as possible (Bayer & Harper, 2000; Nishita, Wilber, Matsumoto, & Schnelle, 2008). Driven by the U.S. Supreme Court's Olmstead decision, recent federal legislation, including the Deficit Reduction Act of 2005 and the Affordable Care Act of 2010, has attempted to reduce states' institutional bias for long-term care and permit more individuals to remain or transition to the community (Arling, Kane, Cooke, & Lewis, 2010; Denny-Brown & Lipson, 2009; Irvin & Ballou, 2010; Kasper & O'Malley, 2006a, 2006b; Miller, Ramsland, Goldstein, & Harrington, 2001). Federal initiatives are increasing states' incentives to increase access and utilization of Medicaid home- and community-based services (HCBS) waiver programs (Wenzlow & Lipson, 2009). One such example is the Money Follows the Person Rebalancing Demonstration Program administered by the Centers for Medicare and Medicaid Services, which provides funds to transition eligible individuals from nursing homes back into the community. From 2008 through 2011, approximately 20,000 people in 42 states transitioned back into community settings (Centers for Medicare and Medicaid Services, 2013). However, the evidence for cost-effectiveness of care provided through HCBS waivers as compared with nursing homes is equivocal (Chen & Berkowitz, 2012; Miller et al., 2001). Within federal guidelines, states have the freedom to allocate their Medicaid spending on long-term care as they see fit; for example, by capping the number of individuals who can receive HCBS waivers (Kitchener, Ng, & Harrington, 2004). In general, HCBS allocations have increased in the last decade; however, there is variability among states, and over time, in the amount for monies allocated to programs designed to prevent or reduce institutional long-term care. The state of Alabama distributes relatively little of the Medicaid long-term care budget to HCBS compared with other states with 31.5% allocated toward HCBS and 61.8% on nursing home care (Kaiser Family Foundation, 2012). As of 2012, the number of aged individuals eligible to receive HCBS is capped at 9,205 (Alabama Medicaid Agency, 2012). As Alabama and policymakers from other states consider programs to increase HCBS in a time of state budget crises, determining the comparative effectiveness of different long-term care policies is imperative. The purpose of this study was to compare outcomes and associated costs for acute care among patients receiving care in nursing homes with those receiving care in the community by home health agencies. A propensity-score-matched cohort design was used to compare nursing home residents and older adults receiving care from home health agencies with similar functional limitations and patterns of health service utilization.
While nursing home care is unavoidable for some elderly people, the utilisation of home and community-based services (HCBS) has been tested amid speculation that it could be a solution to ageing in Australia.