Demographic Cost and Impetus on Health Care Industry

Cost And Impetus On Health Care Industry

Demographic Cost and Impetus on Health Care Industry

There are a few factors that are driving change in the home health care industry of late. Typically, it is the aging of the US population that plays the major role in bringing the changes in health care system. According to MedPAC or The Medicare Payment Advisory Commission:

  • The estimated Medicare enrollment will increase by more than 50% over the next 15 years.
  • They say that the current figure of nearly 54 million beneficiaries today will change to more than 80 million by the end of 2030.

While these figures reveal the importance Medicare will have on home health care industry on the one hand, on the other hand it also denotes a few other significant things. These facts are further substantiated by the results reflected by the Census of the United States Population. This Census projects that:

  • The share of US residents over the age of 65 years will nearly double to 20% by 2030 as compared to the 13% mark reported in the 2010 Census and
  • As for the oldest Americans of the age 85 years and above will also double by the end of the year 2036 and triple by 2049.

There are a few significant reasons for this, as accounted by a few experts. They say that the people having Medicare will be far healthier as compared to their previous generations because:

  • The life expectancies will be longer and
  • Smoking rates will have declined.

It is also suggested that the baby boomers will have much higher rate of diabetes and obesity equated with their previous generations.

Illness and chronic conditions

However, this does not mean that the older generation will then not have any medical condition. In fact according to a 2002 study it is predicted that:

  • 88% of the populace of 65 years and above will suffer from at least one chronic condition and
  • A quarter of this population will have four or more conditions!

It is expected that these seniors will have to face and bear with the tremendous effect such ailments will have on their spending. It is in fact found through another study that chronic illness typically accounts for nearly three quarters of entire expenses of the nation in health care.

All in all, it means that the number of older beneficiaries suffering from several chronic conditions will continue to rise. This will warrant for providing home health care in the most suitable, efficient and effective environment. It will therefore be crucial for the Home care agencies near me and others to maintain the right balance between the demand for such cares and its supply.

The triple aim concept

The most significant reform in the health care delivery system happens to be the Triple Aim which is the result of the demographic trends with the spending disquiets as a backdrop.

The Medicare program typically, started to emphasize in achieving their so called ‘Triple Aim’ since 2009. This is a significant framework that is initially conceived by the Institute for Healthcare Improvement. However, over time this grew up in popularity and usefulness and now almost all health care agencies have accepted it universally in their health care policy and its delivery.

The Triple Aim concept focuses on the effort to innovate the Medicare programs. This has propelled substantial changes. The Triple Aim concept also declares the most vital three goals that the US health care system should pursue simultaneously in order to improve it. These goals are:

  • Improving the level of patient experiences for such care including its quality and satisfaction
  • Improving the number of healthy populations and
  • Decreasing the per capita cost of health care.

The Triple Aim concept has been used by the policy makers as well as the key leaders in the health care delivery. It is primarily used to focus on their goals. This will in turn help them to reform the overall health care delivery system eventually.

The effort of this policy is towards the achievement with various initiatives that are undertaken by the Center for Medicare and Medicaid Innovation or CMMI. The time specific goals also help the health care agencies to move Medicare recompenses from more volume to more value.

The HHS goals

In addition that The US Department of Health and Human Services has also announced their goals as well in early 2015. These HHS goals are basically manifold which are:

  • To tie 30% of traditional FFS or Fee For Service of Medicare payments to value and quality through Alternative Payment Models or APMs and
  • To include Accountable Care Organizations or ACOs and bundled payments by the end of 2016 and 50% by the end of 2018
  • To tie 85% of all the traditional payments to value or quality 2016 and 90% by 2018.

These can be achieved through different programs such as HVBP or Hospital Value-Based Purchasing Program and HRRP or Hospital Readmissions Reduction Program.

Impact of the Affordable Care Act

HHS goals are significant for the health care agencies and HHS itself has taken a few steps to achieve these goals. In fact, ACA or Affordable Care Act has also had a significant impact on the quality programs that are primarily aimed for the hospitals.

A new legislation and supervisory actions have extended the quality and value programs that are meant for the post–acute care. This involves:

  • SNF or Skilled Nursing Facility
  • Value based purchasing program and
  • The home health care value based purchasing demonstration.

Apart from the hospital value based purchasing and bundle payments, there are also a few more conventional programs that will help these agencies to leverage home based care. A few of these include:

  • The Veterans Administration’s Home Based Primary Care program that involves interdisciplinary medical care, skilled services, ADLs and case management and
  • The Program of All Inclusive Care for the Elderly or PACE which is a Medicare and Medicaid program for offering medical and support services of nursing home level.

However, the post-acute care providers are progressively finding them more affected by the ‘downstream’ of these programs that are directed to other entities.

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Andrew Russell
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