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"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.

By Sarah Klein

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.1

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.

New policies that encourage efficiency may spur interest in this model in the U.S. In recent years, a number of payers and providers have sought advice from clinicians at Johns Hopkins Medicine (Johns Hopkins), the Baltimore, Maryland–based system that has operated a hospital at home program since 1994 (see Hospital at Home Programs: Step by Step for a description of the Johns Hopkins model.) This interest is likely to increase along with the introduction of accountable care organizations, which may allow providers to share in the savings more efficient models of care produce.

Hospital at Home Programs: Step by Step

  • An emergency department or community physician identifies a patient who is sick enough to be hospitalized but stable enough to be treated at home. Narrowly defined eligibility criteria help distinguish patients who need intensive services and/or multiple visits from specialists—and therefore should be treated in hospital settings—from those whose needs may be met at home by visiting physicians, nurses, and other clinical staff. Conditions with defined treatment protocols, such as congestive heart failure (CHF), chronic obstructive pulmonary disease (COPD), community-acquired pneumonia, and cellulitis, are a natural fit.
  • The suitability of the home is assessed to confirm it has air conditioning, heat, and running water.
  • Responsibility for care is assigned to a physician.
  • A greeter meets the patient in the emergency department or elsewhere to discuss the program, arrange transportation, and deliver the biometric and communication devices that will be needed to oversee care.
  • A caregiver meets the patient at home and a physician—either in person or via video—explains the treatment protocol. Orders are written and clinical staff, including respiratory therapists, physical therapists, and other caregivers arrive as needed to administer intravenous medications and fluids, provide nebulizer treatments, and conduct tests, including ultrasounds, X-rays, and electrocardiograms. Meals are arranged if necessary. The patient's vital signs are monitored electronically.
  • The physician visits the patient daily, or in some models, communicates with the patient via telemedicine equipment. To capture any decline in the patient's condition when clinicians are off site, providers monitor patient using telemedicine equipment.
  • Once the patient is stabilized and well enough to return to activities of daily living, he or she is handed off to his or her primary care physician. In one model, providers maintain oversight of the patient for at least 30 days, to ensure he or she is keeping appointments and is not suffering any adverse consequences. During this period, the physician provides updates to the patient's primary care physician. 

The Johns Hopkins Model
Johns Hopkins developed its hospital at home program as a means of treating elderly patients who either refused to go the hospital or were at such risk of hospital-acquired infections and other adverse events that physicians kept them at home out of concern for their safety. Early trials of its model (described in the box above) found the total cost of at-home care was 32 percent less than traditional hospital care ($5,081 vs. $7,480), the mean length of stay for patients was shorter by one-third (3.2 days vs. 4.9 days), and the incidence of delirium (among other complications) was dramatically lower (9% vs. 24%).4 One study of the program also found no difference in rates of subsequent use of medical services or readmissions. And patients and family members' satisfaction was higher in the home setting than among those offered usual hospital care, reflecting the convenience of the model.

Payment a Significant Barrier
Despite these dramatic results and the refinement of portable imaging equipment and drug delivery systems that facilitate home-based care, the dissemination of the model in the U.S. has been slowed by lack of payer acceptance. By contrast, the state government in Victoria, Australia, reimburses for at-home care at the same rate it reimburses for inpatient care. Without that "hospitals would not be engaged enough to bother," says Michael Montalto, M.D., Ph.D., director of the "Hospital in the Home" program at both Royal Melbourne Hospital and Epworth Hospital. (In Australia, the state derives a financial benefit from reducing or eliminating the need to build new hospitals as demand for acute care increases.)

In the U.S., the Centers for Medicare and Medicaid Services (CMS) and most private payers do not pay for hospital care delivered at home and generally restrict payments for telemedicine—an essential element of the model—to very limited circumstances, restricting the possibility of implementation to a handful of providers who control all or some of their funding. These include two Veterans Health Administration hospitals—one in Portland, Oregon, and the other in New Orleans (which implemented the program out of necessity when Hurricane Katrina knocked out the Veterans Administration Medical Center there) and Presbyterian Health Care System in Albuquerque, New Mexico, an integrated delivery system whose health plan supports the program. (The Presbyterian program is described in more detail in the accompanying case study).

That may change as more insurers, such as Aetna, consider implementing the model. "I don't know exactly how we are going to do it," says Randall Krakauer, M.D., national medical director of Aetna's Medicare program who over the years has had several conversations with Bruce Leff, M.D., the geriatrician and health services researcher who developed it . "One possibility would be to implement it in collaboration with provider groups," he says, but that would require a certain scale. "We need a relatively large membership base [of patients] to support one of these operations."

An Entrepreneurial Approach
Recognizing the potential to meet this need for infrastructure, one venture capital–backed health care firm is working to build a hospital at home program as a standalone service that can be marketed to hospitals, insurers, and physicians. The company, Tennessee-based Clinically Home LLC, plans to provide at-home hospital services through dedicated physician groups.

The Clinically Home model was designed in collaboration with Johns Hopkins (Leff serves as chair of the company's clinical advisory board and the health system has an institutional consulting agreement with the company.) Both the Clinically Home and Johns Hopkins models supply the equipment and staff necessary to manage intravenous lines, perform diagnostic tests, and provide other services in the home and rely heavily on physicians and nurses to manage care. But in the Clinically Home model, physicians do not make house calls. Instead, they engage with patients, as well as nurses and nurse practitioners making home visits, using two-way biometrically enhanced video that enables physicians to see, but not touch, their patients.

This approach introduces some complications. It requires using providers who are comfortable treating patients without face-to-face contact, as well as consistent and continuous communication among team members who operate in a virtual manner. Montalto also points out the lack of a physician presence in the home may inhibit patient confidence. The patients "stay at home through the acute episode because they are confident to do so. I think with no face-to-face [contact with physicians] at all, there are going to be some circumstances in which patients will bail," he says.

Another significant difference between the two models is that in the Clinically Home version, the admission eligibility criteria and protocols that physicians and other caregivers use to ensure care is standardized and safe include approximately 100 diagnostic-related groups (DRGs). Among them are asthma exacerbation, early sepsis, seizure disorders, and gastrointestinal conditions or diseases. Its founders believe that with the expanded list of DRGs, the model has the potential to vastly increase the number of patients treated at home and deliver care at half of traditional hospital costs. The larger savings ensue from eliminating physician house calls. "You really start to leverage economies of scale when you have a doctor who is covering a hospital at home program across wide swathes of geography," Leff says.

Clinically Home has been testing its approach at Advocate Health Care, an integrated delivery system in Oakbrook Terrace, Ill., that participated in a clinical trial of the program at its own expense. That trial focused on a single hospital that was at capacity and whose emergency department frequently had to turn away ambulances. The patients in the program and in the control group suffered from DVT, asthma, pneumonia, CHF, and COPD, among other conditions.

Leff says that trial, completed in October 2010, significantly reduced readmissions, increased patient satisfaction rates, and cut costs beyond the savings he achieves in a model that relies on physician house calls. Scott Powder, Advocate's senior vice president of strategy and growth and a board member of Clinically Home, said he could not be specific about results until the publication of trial results, but says, "we learned the model works."

Physician Resistance and Other Challenges
While Clinically Home prepares to offer a standalone service, some health systems are launching their own hospital at home programs using internal resources. Carilion Clinic, a Roanoke, Virginia–based integrated delivery system, is attempting to test one in Tazewell, a small community in eastern Virginia. But two months into the program, they haven't been able to recruit a single patient because physicians—both in the community and in the hospital's emergency department—are reluctant to refer patients, even though they support the concept in principle, says Lisa Sprinkel, senior director of home care and hospice services, who oversees the program. "They want to make sure their patients are cared for. I [also] think there's some hesitancy from a legal perspective (e.g. malpractice risk)," she says.

Time constraints are another barrier. Physicians who refer patients to the program must screen them carefully and make arrangements to introduce them to the concept of at-home hospital care. For many, it's simply easier to admit patients. "One of the biggest lessons learned is [that] the engagement of the emergency department physicians is critical because they are the ones who actually have to make the biggest adjustment in their decision making," Powder says.

Montalto still finds this to be a problem, even after 17 years of practice with at-home care. "We still get a lot of people who won't refer patients to us [because they] feel that we are an inferior choice to coming into the hospital." Presenting the program as a seamless hospital unit helps. "It gives them confidence to at least try us," he says. Having 24-hour coverage, presenting details of the program at meetings, and writing papers that demonstrate the effectiveness of the program are also essential, he says.

The chief financial officers (CFOs) of hospitals may also present a challenge, especially those who remain unconvinced that the beds freed by treating patients at home will be filled with patients needing more complex and intensive services. "When you don't have backfill opportunities, it is a little bit harder sell to the CFO of the hospital [that] you are going to walk away from a $10,000 or $12,000 admission," Powder says.

And finally, there are concerns about patient safety and gaming, the latter of which occurred in Australia when some hospitals began referring patients who only needed subacute care to the at-home program. Auditing programs, establishing accreditation programs, and reinforcing inclusion criteria may address these concerns. And with rigorous quality assurance and improvement programs, more providers may consider the model. ""I think it could be an adjuvant to what we are already doing in health care to produce higher value," says John Combes, M.D., senior vice president of the American Hospital Association. Gaining the full support of payers may take more time. Michael Montijo, M.D., president and COO of Clinically Home, says payers will want additional evidence of improvement in quality, reductions in readmission rates and costs, and improved safety. He's confident that will come with additional testing. "Once they feel comfortable with that and put it into their underwriting, the game changes," he says.


1 B. Leff, L. Burton, S. L. Mader et al., "Hospital at Home: Feasibility and Outcomes of a Program to Provide Hospital-Level Care at Home for Acutely Ill Older Patients," Annals of Internal Medicine, Dec. 2005 143(11):798–808.
2 M. Montalto, "The 500-Bed Hospital That Isn't There: The Victorian Department of Health Review of the Hospital in the Home Program," The Medical Journal of Australia, Nov. 2010 193(10):598–601.
3 Leff, Burton, Mader et al., 2005.
4 Ibid.

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