Can we afford comprehensive, supportive care for the very old?

Area of Science:

• Gerontology
• Health Economics
• Public Health Policy

Background:

• Medicare reimbursement for the elderly is substantial.
• There is ongoing debate about the efficient allocation of healthcare resources.
• The need for home and community services among older adults is increasing.

Purpose of the Study:

• To determine if Medicare hospital reimbursement is overused.
• To assess the potential for reallocating excess funds to home and community services for seniors.
• To evaluate the impact of reduced hospital utilization on mortality rates in the elderly.

Main Methods:

• Simulation modeling using Medicare Current Beneficiary Survey (MCBS) data.
• Analysis of hospitalization expenditures and mortality rates across hospital service areas (HSAs) stratified by Medicare discharge rates.
• Comparison of outcomes for Medicare beneficiaries aged 80 and older based on HSA utilization quartiles.

Main Results:

• Reducing hospital utilization to the lowest quartile's mean level could save $560 per Medicare beneficiary (aged 80+), with no increase in mortality.
• These savings could fund approximately 40 annual visiting nurse visits per beneficiary.
• Reducing utilization from the highest to the lower three quartiles could save $152 per beneficiary, funding about 11 additional visits.

Conclusions:

• The elderly population (80+) may safely utilize less hospital care.
• Reallocating potential savings from reduced hospitalizations could significantly enhance home and community services.
• Targeted reallocation can address the needs of older adults requiring greater support.