AHHQI Releases Report on Reducing Post-Acute Care Cost

The Alliance for Home Health Quality and Innovation (AHHQI) released details of their Clinically Appropriate and Cost-Effective Placement (CACEP) project which focused on reducing post-acute spending by improving the process of transitioning patients following hospital discharge.

The final CACEP report builds upon a series of working papers assessing the volume, payments, patient pathways, and readmissions of various types of post-acute care episodes. The purpose of this study is to better understand how episodes of care are currently provided and to model uses of the home health benefit that are potentially more effective within the Medicare program. Another purpose is to inform the health policy community of opportunities in which more effective and innovative use of post-acute care settings could transform the delivery system and enable a more efficient use of resources.

Key findings of the study include:

  • Medicare could achieve savings by understating the patterns with which patients receive care (patient pathways), identifying ways to avoid unplanned readmissions, and placing patients in the most clinically appropriate and cost-effective setting.
  • Shifting the patient care setting to home and community based care would yield savings of $34.7 billion over ten years.
  • Adding an explicit policy to reduce Medicare fee-for-service post-discharge spending by 7.5 percent would yield Medicare saving of $100 billion over ten years.

The report examines the financial impact that more aggressive payment reforms would have on the Medicare program. The report finds that more innovative payment models are necessary to achieve optimal savings, where there is strong financial pressure on post ‐acute care providers collectively to reduce Medicare expenditures, increase efficiency and reduce episode complexity and length. The analysis also presents analytic models indicating Medicare savings.

DaVanzo & Associates, LLC conducted the Clinically Appropriate and Cost-Effective Placement (CACEP) study. The goal of the CACEP analysis was to determine how the Medicare home health benefit can better meet beneficiary needs and improve the quality and efficiency of care provided within the U.S. health care system. The CACEP project examines claims for a five percent sample of Medicare fee-for-service beneficiaries from 2007 to 2009 and analyzes opportunities for improving quality and efficiency of care and reducing Medicare spending. The study, A.Dobson et al., “Clinically Appropriate and Cost-Effective Placement: Improving Health Care Quality and Efficiency,” www.ahhqi.org, October 2012.

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