Home Hospital Reduces Costs, Readmission for Acutely Ill Patients

Unnecessary hospitalizations are costly and are often predictors of even more expensive readmissions. So many value-based contracts push for creative solutions that keep patients out of the hospital whenever possible. One solution is home hospital care.

 “We can decentralize a lot of the care delivery mechanisms that we have today,” said David Levine, MD, MPH, MA, physician and researcher at Brigham and Women’s Hospital Division of General Internal Medicine and Primary Care. “By doing that, we can actually get patients the care that they need, in the right place, at the right time, without a lot of the costs or adverse events that we see when we centralized care all in one place.”

Levine recently conducted one of the country’s first randomized controlled trials on home hospital.

“Home hospital is acute care in the home,” he explained. “An acutely ill patient who would normally be in the hospital is able to change that site of care to the home.”

In total, 91 patients participated in the trial. Forty-three received home hospital care and 48 received traditional post-acute care in the hospital.  

Home hospital patients saw a 38 percent lower cost of care, including fewer laboratory orders, imaging studies, and consultations.

In addition, home patients spent less time in their day sedentary or lying down.

Perhaps most importantly, at least from a value-based care perspective, was the drastic decrease in 30-day readmission rates. Home hospital readmission rates were only seven percent compared to 23 percent for the traditional care group.

But getting to those net positive outcomes wasn’t so easy, Levine acknowledged. In order to advocate for home hospital, Levine understood he would have to highlight the costs of care.

“I knew when designing the trial that nobody was going to scale or pay for home hospital if it cost too much. That’s why we framed this around cost,” Levine explained.

As a physician, Levine’s first priority is to his patients and patient care. But considering costs incurred by both the patient and the health system is also important to clinical decision making. 

Cost data, though, is often not transparent. So providers must frequently make care decisions without considering these factors, unintentionally leaving their patients with large medical bills.  

The study team wanted to better understand the true costs of care, so they built a cost model from the ground up.

“We were able to add up every single bag of antibiotic, every single Band-Aid, every single hour of nursing care to get the total cost of care,” Levine said.

Once the costs were clearly understood, the study team had to build the infrastructure required to manage home hospital care. This entailed gathering a workforce to care for patients and maintaining a supply chain.

“You have to have a team that is willing to go out into people’s homes to care for them,” Levine emphasized. “You have to have a set patient population that you are able to wrap services around. You need some infrastructure, whether that’s an emergency department that you’re going to take patients from or a hospital floor.”

The supply chain is also essential in order to bring the proper equipment and medication into the patient’s home.

“You need to be able to get the IV medicine to patients’ homes at the right time,” Levine explained.

Despite Levine’s efforts, the current healthcare system is not set up for success of this model. Payment structures like Medicare fee-for-service do not have billable codes for home hospital.

“That is a major limiting factor,” Levine said. “As a result, it holds back a lot of health systems from starting this kind of care. There is not a straightforward reimbursement model for Medicare fee-for-service or even for commercial fee-for-service insurance companies.”

However, the Veteran’s Administration (VA) or accountable care organizations have payment structures with global budgets that are primed to succeed in home hospital models.

“You get paid to take care of a certain number of patients if you’re a VA health system,” Levine explained. “It doesn’t matter how you do that, which is why we see the VA as being a leader in home hospital care.”

Accountable care organizations similarly work on a global budget so there is an existing financial infrastructure to support home hospital.

Levine’s plans for the future expand beyond these specific organizations, though.

“My vision is that every American can be home hospitalized if appropriate. Home hospital care would be standard of care,” he concluded. “But hospitals would look more like a highly specialized center, an OR, an ER, and ICU, and not have general medical wards anymore. We’d decentralize a lot of care back to communities.”