Home Care Budget Model Tries to Direct Resources to Where Needed Most

Defining home care risk groups: A strategy for improved effectiveness and efficiency
    • March 30, 2004

From 1997 to 2000, researchers at the University of Michigan under the direction of William G. Weissert, PhD, developed and tested a model for paying for home care based on the risk of four adverse outcomes: death, hospitalization, nursing home use and functional decline.

The project was part of the Robert Wood Johnson Foundation (RWJF) Home Care Research Initiative national program.

Researchers used a data set composed of 26,754 clients of the Arizona Long-Term Care System (1992 through 1997) and conducted four literature reviews to develop the model. The researchers began a pilot study of the model with the Maricopa (Ariz.) County Managed Care System in which 12 case managers used the model and 12 used their usual budget practices.

Key Results

  • The home care budget model directs resources where they are needed most. Budget targets are based upon effectiveness of home care in mitigating certain adverse outcomes—death, hospitalization, nursing home admission and functional decline; the risk of those outcomes occurring; and the economic value of avoiding those outcomes. (Health Affairs, vol. 20, no. 3, 2001)

Key Findings

  • The estimates of predicted risk for nursing home placement, hospitalization, death and functional decline vary widely.

  • Three risk factors—worse performance on physical function measures based on ADL, greater illness severity and prior hospital use—predicted all four adverse outcomes.

  • The relationship between the risks of adverse outcome and the costs of home care under existing practice was negligible, even in a well run, capitated home care program.

The researchers published seven journal articles (including in Health Affairs, Medical Care and Medical Decision Making) and made 16 presentations about the project.