Home Health Care Industry Projects Increased Growth

By BarnaJ. Feder | THE JOURNAL RECORD, January 1, 1992 | Go to article overview
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Home Health Care Industry Projects Increased Growth


By Barnaby J. Feder N.Y. Times News Service A decade of rapid growth in home health care has forged a $15 billion industry with more than 12,500 companies and not-for-profit services. Many experts expect even faster growth in years to come as home treatment proves effective for a growing range of acutely ill or disabled patients whom doctors would once have insisted on hospitalizing at great cost.

The services range from traditional visiting-nurse associations to a host of entrepreneurial start-ups like Calldoctor Inc., a San Diego-based mobile emergency-room service.

"We think it is going to be the fastest-growing business segment from the mid-1990s until well into the next century," said Gerald Celente, director of the Socio-Economic Research Institute of America in Rhinebeck, N.Y. "Most products and services for the home-health-care market haven't been invented yet."

Most home care continues to involve chronic problems that are not life-threatening and are expected to affect more and more Americans as the population ages. But physicians at the frontiers of home health care are also expanding their work to include some stunningly acute and complex cases.

In Chicago, a 6-month-old infant with spinal cord injuries so severe that she cannot suck, cry, eat, breathe or move on her own was discharged from a hospital intensive-care unit and sent home. There, machinery run by nurses and her family has aided her growth. Her doctor hopes new technology will one day restore some of her lost abilities.

Some of the home patients are being pushed out of hospitals that need their beds for other people with more severe or immediate problems. In other cases, patients whom hospitals would gladly keep are going home to save money, recuperate faster and avoid exposure to hospital-based diseases. Still others are relying on home care to avoid going to hospitals for even initial treatment.

The home-care trend should be stimulated by recently proposed changes in Medicare compensation that would more than double government payments for doctors to visit Medicare patients at home. But even without such incentives, health industry analysts say, the double-digit growth of the last few years is likely to accelerate as those born after World War II grow older.

The experts prefer to discuss trends rather than numbers because dependable financial data are hard to come by. Only a handful of companies publicly report earnings and revenue.

The $15 billion estimate for total spending on home medical-care services and equipment last year is a projection based on statistics from government-financed programs, like Medicare and Medicaid, that serve patients who are elderly, disabled or extremely poor. About one person in 10 who saw a doctor last year needed some form of home care, according to the American Medical Association.

The industry's growing pains have recently attracted more attention than its prospects. In November, the Health and Human Services Department moved to clamp down on abuses of the Medicare system by medical equipment suppliers who sell their products for home use.

More than 70 individuals and equipment companies have been convicted of fraud and other crimes involving inflated equipment costs, which total about $1.2 billion or roughly 2 percent of Medicare's annual budget.

The government is also challenging a practice among some home-care companies of paying doctors to monitor therapy for the companies' patients.

Caremark Inc., a Chicago-based subsidiary of Baxter International Inc., is the subject of a criminal investigation involving the practice. The government says the practice may have operated as system to funnel kickbacks to Caremark.

Caremark has stopped such payments but defends them as legal within the vague guidelines Washington and the states have given the largely unregulated industry.

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