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Nurses and other clinicians providing healthcare in patients' homes and community settings have what it takes to control the number 1 cause for the rapid growth in national healthcare expenditures, namely, the increasing prevalence of chronic illness. That is, they have the skills and ability to prevent the need for costly hospital emergency room care, to avoid unnecessary hospitalizations, and to reduce lengths of stay in both hospitals and nursing homes for those with chronic conditions.


Chronic conditions accounted for more than 75% of the total spending on public and private healthcare in 2005 (Centers for Disease Control and Prevention, 2008). This percentage will continue to grow as the prevalence of chronic conditions continues to increase. Currently, more than 90 million Americans live with chronic illnesses. This number is expected to increase to 171 million by the year 2030 (Greenawalt, 2008).


Numerous studies have shown that nurse-directed care management models save healthcare dollars and produce positive outcomes for patients. For example, a randomized clinical trial study done in 1999 found that discharge planning and home care intervention after hospital discharge by advanced practice nurses (APNs) for chronically ill seniors reduced future hospitalizations and the cost of care. At 24 weeks after discharge, total Medicare reimbursements for health services were about $1.2 million in the control group compared to about $0.6 million in the intervention group (Naylor, Brooten, Campbell, & Jacobsen, 1999).


This should be good news to policymakers in Washington as they once again begin the daunting task of attempting to provide access to healthcare for the uninsured while simultaneously decreasing national healthcare costs. Saving money on chronic care will go a long way toward accomplishing these goals. Overhauling Medicare and Medicaid to address chronic illness through home-based chronic care management would be a good place to start as both programs continue to focus dollars on institutional care instead of shifting resources to the management of chronic illnesses at home.


Despite compelling data from the federal government that home healthcare is cost effective in comparison with care provided in other settings,* spending for the Medicaid and Medicare programs is heavily weighted toward institutional care. In 2006, 75% of Medicaid long-term care spending for elders and adults with physical disabilities went toward institutional services (Wennberg et al., 2008). Yet, Medicaid dollars can support nearly 3 older people or those with physical disabilities in home and community-based settings for the same cost required for a single person in a nursing home (Kassner et al., 2008). Moreover, spending for Medicare home health services has fallen from 7% of total Medicare expenditures in 1997 to 5.5% of total Medicare expenditures in 2007 (CMS, 2008). This dramatic drop is the result of federal payment reductions in 8 of the past 11 years.


At least 1 federal healthcare program may be considered an effective cost-saving model for the treatment of complex, chronic, and disabling conditions. The U.S. Department of Veterans Affairs' (VA) Home-Based Primary Care (HBPC) program is a comprehensive primary care program that involves an interdisciplinary team of providers-nurse, social worker, physician, therapist, dietitian, pharmacist and psychologist-who collaborate and coordinate services provided to intensely chronically ill veterans in their homes. The HBPC program has decreased inpatient admissions by 26.8%, hospital days by 63%, nursing home days by 87%, and VA total cost of care by 24% (Edes, 2008). The Congressional Budget Office reported in 2007 that during 1998-2005, VA costs per patient increased 1.7% while Medicare costs per patient increased 29.4%.


Cost-effective models such as the VA's HBPC clearly hold the promise of controlling costs and enabling increased healthcare access for the uninsured. By using the VA's HBPC and similar models as guides for healthcare reform, there is reason for hope that the nation can successfully confront this challenge.


The Visiting Nurse Associations of America (VNAA) continues to take the message to Capitol Hill that home health nurses and clinicians can help solve the chronic disease challenge and contribute to the budget dilemma facing Medicare and Medicaid.




Buntin, M., Deb, P., Escarce, J., Hoverman, C., Paddock, S., & Sood, N. (2005). Comparison of Medicare Spending and Outcomes for Beneficiaries with Lower Extremity Joint Replacements. RAND Health working paper series. Retrieved November 10, 2008 from


Center for Disease Control and Prevention. (2008, March). Chronic disease overview. Retrieved November 3, 2008, from


Centers for Medicare & Medicare Services, Office of the Actuary. (2008). National Health Expenditure (NHE) Amounts by Type of Expenditure and Source of Funds: Calendar Years 1965-2017. Retrieved October 28, 2008 from[Context Link]


Edes, T. (2008). There's no place like home: progress in VA home based primary care. Presented by U.S. Department of Veteran Affairs, Office of Geriatrics and Extended Care on January 3, 2008. [Context Link]


Greenawalt, S. (2008, July/August). The integration of case management and disease management. The Remington Report, 16(4). [Context Link]


Kassner, E., Reinhard, S., Fox-Grage, W., Houser, A. & Accius, J. (2008, July). Funding for long-term care programs; in brief: a balancing act: state long-term care reforms. AARP Public Policy Institute. [Context Link]


Naylor, M., Brooten, D., Campbell, R., & Jacobsen, B.S. (1999). Comprehensive discharge planning and home follow-up of hospitalized elders. Journal of the American Medical Association, 281(7), 677-682. [Context Link]


Wennberg, J., Fisher, E., Goodman, D. & Skinner, J. (2008, April). Tracking the Care of Patients with Severe Chronic Illness: The Dartmouth Atlas of Health Care 2008. The Dartmouth Institute for Health Policy and Clinical Practice, Center for Health Policy Research, Dartmouth Medical School, The Trustees of Dartmouth College, Lebanon, New Hampshire, Retrieved August 5, 2008 from 184 pp. [Context Link]


*Additionally, a June 2005 RAND study titled "Comparison of Medicare Spending and Outcomes for Beneficiaries with Lower Extremity Joint Replacements" detailed costs and outcomes for hip and knee replacement patients in different postacute care settings. The report found that the total postacute care payments for inpatient rehabilitation facility (IRF) and skilled nursing facility (SNF) were $8,023 and $3,578, respectively, higher than Medicare payments for patients discharged home. [Context Link]