Health Care on the Home Front
Jackson, Nancy, Workforce
HR professionals increasingly are adding home health-care to their benefits plans. Employees can get back to work faster after a disabling event, and HR lowers its overall health-care costs.
Whether an employee seeks medical care because of a nasty rollerblading spill or needs an emergency quadruple bypass operation, any time an employee is admitted to a hospital is cause for employer concern. According to the Washington, D.C.-based American Hospital Association, one inpatient day of eight hours or less in the hospital costs an average of $1,968, and one 24hour stay costs approximately $9,228. Add to that additional medical care, lost time, monitoring for return-to-work, replacement workers and the overall impact on health-insurance premiums, and employers are motivated to help employees recover from illness or injury as quickly as possible.
As human resources professionals struggle to control skyrocketing healthcare costs, many are finding a key strategy is decreasing hospitalization with the use of home health-care services. Home health-care companies employ health-care professionals and other trained personnel who work with patients and their families at home to help patients achieve their maximum level of health. Although home health-care encompasses a broad range of services from skilled nursing care to home medical-equipment repair, its main advantage is bringing necessary hospital services home to the patient-rather than allowing the patient to linger in the hospital.
Home health-care is the fastest growing segment of the health-care industry, and for good reason. Patients are finding that home health-care helps them heal in their home environments, teaches them to manage their injuries or illnesses and educates family members on how to be caregivers.
According to the Congressional Budget Office, national expenditures for all home health-care services were estimated at $36 billion in 1996 and are expected to grow an average of 13 percent per year through the year 2005. The Washington, D.C.-based National Association for Home Care, the largest home health-care industry group, reports that the number of home-health agencies in the United States grew from 1,100 in 1963 to more than 17,500 in 1995. The U.S. Labor Department expects home health-care to grow at the fastest rate of any industry through 2002.
The benefits of home health-care aside, the rise in its utilization is largely due to the increased use of managed care. In 1996, 77 percent of employees who have health insurance through their work were covered by a managed-care plan, according to William M. Mercer, a health-care benefits consulting firm based in New York City. Managed care falls into the categories of health maintenance organizations (HMOs), preferred provider organizations (PPOs) and pointof-service (POS) plans.
Approximately 27 percent of employees in 1996 were covered by HMOs, which restrict services to health-care providers chosen by the HMO; 31 percent were covered by PPOs, which provide discounted health-care services if the employee chooses healthcare providers from the PPO network; and 19 percent were covered by POS plans, which allow employees to choose out-of-network providers at a higher out-of-pocket cost.
Managed-care organizations restrain health-care costs by scrutinizing treatment through utilization review and case management, assuring employers that pay for health insurance that employees receive only those services that are medically necessary. In short, the rise in managed care has led to the rise in home health-care providers, who either provide services as subcontractors to managedcare companies or directly to employers who buy the services home health-care companies provide and offer them to their employees, retirees and other dependents. As the purchaser of healthcare services, either directly or indirectly, HR managers should be savvy about the benefits of home health-care and incorporate such care into their health-care strategies through their insurance contracts where warranted. …