What’s the situation with home health care vs. nursing homes? Allotting funds for alternatives to nursing homes is becoming more and more popular, and from all accounts, less costly. Allowing families to hire their own loved ones is an option some states are considering.

If home health care agencies can’t find enough reliable, compassionate caregivers to tend to the growing number of elderly and disabled, why not pay clients to hire their own relatives or friends to provide their in-home care?

More than a dozen states, including Ohio, are exploring that choice as a way to head off a looming shortage of home health aides and to help control skyrocketing Medicaid costs for nursing home care.

Home care typically costs less than a third of what states pay for nursing homes. But at current wage scales of $10 to $12 an hour, the turnover rate among home health agency staff is high — 90 percent of aides leave their jobs within the first two years, according to the Institute of Medicine.

Would friends and family do a better job while also saving states hard-pressed Medicaid dollars?

Initial reports from states that allow elderly clients to hire and fire their own in-home workers, including family and friends, suggest it may be one solution.

Sounds good to me.

But does this save money?
Yes.

In a 2006 report, Arkansas found it reduced nursing home admissions 18 percent over a three-year period through a program called Cash and Counseling. The program gives elderly clients the option to employ their own caregivers, direct their own mix of services and pay aides through a budget they control. Case managers advise clients and monitor care.

While the program raised the state’s costs for in-home care, higher costs were offset by savings in reduced nursing home admissions and other long-term care costs, Arkansas found.

And:

For the past decade, Ohio has been struggling to shift more of its frail elderly and disabled away from nursing homes and into lower cost alternatives such as assisted living and home care. In 1995, 90 percent of Ohio’s long-term care recipients were living in nursing homes. By 2005, that percentage had dropped to 65 percent. The Ohio Department of Aging estimates the shift has saved Ohio taxpayers $1 billion.

That’s A LOT of money!

Consider:

States like Oregon and Washington that have long advocated a variety of care choices for the elderly spend more than 60 percent of their Medicaid dollars on nursing home alternatives, including adult foster homes and group facilities as well as home care.

In the national discussion about health care reform, perhaps programs like these should be brought to the table. A lot of people are fussing about the potential severe shortage of aides, nurses and money to cover nursing home care, for the baby boomers. It seems to me we can save a real lot of money by thinking outside the box.