Home Healthcare More Cost-Effective Than SNFs as Post-Acute Care Setting

Home healthcare is the most cost-effective post-acute care setting for patients discharged from hospitals when comparing average payments across settings such as skilled nursing facilities, inpatient residential facilities, and long-term care hospitals, according to a Dobson | DaVanzo & Associates study commissioned by the Alliance for Home Health Quality and Innovation. 

The Washington, D.C.-based health care consulting firm analyzed the use of home healthcare (compared to other methods of care) throughout three years of Medicare claims data for post-acute care settings within 60 days of hospital discharge. Nearly 40% of Medicare patients discharged from a hospital into a post-acute care setting use home healthcare. 

Despite the fact that home healthcare as a post-acute care “first setting” represents 38.7% of all Medicare episodes, it comprises just 27.8% of payments—shown by the study to be the “least costly” alternative. 


“The variation in Medicare episode payments across different first settings is attributable to first setting and subsequent care used,” said the Alliance about the study. “When comparing average payments across settings, home health is the most cost-effective.”


Although patients receiving home healthcare had a slightly longer care process compared to someone discharged from a hospital into a skilled nursing facility, so-called “sequence stops” throughout the process tended to be ambulatory (services provided by physicians, outpatient therapy, and hospice), rather than facility-based, for a less-expensive cost to the Medicare system, as shown by the chart above.


“In considering the importance of patient pathways, the need for coherent coordination of care becomes evident,” wrote Dobson | DaVanzo in the paper. “The issue of patient pathways in post-acute care must be addressed if delivery system reform and, ultimately, cost control are to be achieved, as patient pathways are at the core of the current post-acute care system.”

Click here to access more information about the research.

Written by Alyssa Gerace