Quality Matters: "Hospital at Home" Programs Improve Outcomes, Lower Costs But Face Resistance from Providers and Payers

Summary: Hospital at home programs that enable patients to receive acute care at home have proven effective in reducing complications while cutting the cost of care by 30 percent or more, leading to entrepreneurial efforts to promote their use. But widespread adoption of the model in the U.S. has been hampered by physicians’ concerns about patient safety, as well as legal risk, and by the reluctance of payers, including Medicare, to reimburse providers for delivering services in home settings.

Hospital at home programs that enable patients to receive hospital-level care in the comfort of their homes have flourished in countries with single-payer health systems, but their use in the U.S. has been limited—despite compelling evidence that well-monitored, at-home treatment can be safer, cheaper, and more effective than traditional hospital care, especially for patients who are vulnerable to hospital-acquired infections and other complications of inpatient care.

Such programs are well established in England, Canada, Israel, and other countries where payment policies encourage—or at least do not discourage—the provision of health care services in less costly venues. In Victoria, Australia, for example, every metropolitan and regional hospital has a hospital at home program, and roughly 6 percent of all hospital bed-days are provided that way. For specific conditions, the use of at-home care is significantly greater: nearly 60 percent of all patients with deep venous thrombosis (DVT) were treated at home in 2008, as were 25 percent of all hospital patients admitted for acute cellulitis.2

Instituting this type of substitution in the U.S. could produce dramatic savings for the Medicare program and private payers, chiefly by eliminating the fixed costs associated with operating a brick-and-mortar hospital. Indeed, pilots of the model have already achieved savings of 30 percent and more per admission, while delivering equivalent outcomes and fewer complications than traditional hospital care.3 In addition to such savings, at-home care may also help avoid shortages of beds in U.S. hospitals...