HCR -- Self-Directed Care

By John Ballard

John C. Goodman founded the NCPA (National Center for Policy Analysis) in 1983 and has served as President and CEO since the center's inception. The Wall Street Journal called Dr. Goodman "the father of Health Savings Accounts," and National Journal declared him "winner of the devolution derby" because his ideas on ways to transfer power from government to the people have had a significant impact on Capitol Hill. He is the author of nine books, including Patient Power: Solving America's Health Care Crisis, the condensed version of which sold 300,000 copies and is credited with playing a pivotal role in the defeat of the Clinton administration's plan to overhaul the U.S. health care system.

This appears at Health Affairs Blog.

Critics of consumer-directed health care often argue that patients are not knowledgeable enough and the market is not transparent enough for consumerism to work in health care. But a study by The Commonwealth Fund says there is an international trend toward self-directed care (SDC) and it is focused on a most unlikely group of patients: the frail, the old, the disabled and even the mentally ill.

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  In the United States, Medicaid �Cash and Counseling� programs � underway for over a decade � allow home-bound, disabled patients to manage their own budgets and choose services that meet their needs.


• In Germany and Austria, a cash payment is made to people eligible for long-term care � with few strings attached and little oversight on how the money is used.


• In England and the Netherlands, the disabled and the elderly manage budgets in a manner similar to Cash and Counseling in the United States.


• Also in this country, Florida and Texas have SDC programs for patients with serious mental illness and the Veterans Administration has an SDC program operating in 20 states for long-term care and mental illness.
  

Further, it appears that we have barely scratched the surface in taking advantage of patient power opportunities.

Chronic Care. As I wrote at my blog and at the Health Affairs blog, the greatest potential in this area is in the treatment of chronic illness. Studies show that chronic patients can often manage their own care with results as good or better than under traditional care; and if patients are going to manage their own care, it makes sense to allow them to manage the money that pays for that care.

The British National Health Service (NHS) is already contributing to SDC budgets for muscu�lar dystrophy, severe epilepsy, and chronic obstructive pulmonary disease. The NHS believes it is saving money in reduced hospital and nursing home costs. The NHS is also about to launch pilot programs that will include mental health, long-term chronic conditions, maternity care, substance abuse, children with complex health conditions, and end-of-life care.

Other countries are moving in a similar direction. The fastest-growing use of personal budgets in the Netherlands is for families with children who have attention-deficit hyperactivity disor�der, autism, and other types of serious emotional distur�bances.

The advantage of empowering patients and families in this way are straightforward: lower costs, higher quality care and higher patient satisfaction.

Lower Costs. In Germany, long-term care patients are given 50% less than what would have been spent if they agree to manage their own budgets. In the Netherlands, spending is 30% less. In England, long-term care services purchased by individuals cost from 20% to 40% less than equivalent services purchased by local governments. In the Arkansas Cash and Counseling program, participants were given more than what Medicaid would have spent, but an 18% reduction in nursing home use reduced Medicaid�s overall costs.

Higher Quality. In Arkansas, Cash and Counseling patients got 100% of their authorized hours of personal care, compared to only 70% for those in traditional Medicaid. In New Jersey, �mentally ill adults with physical dis�abilities�were less likely to fall, have respiratory infections, develop bed sores, or spend a night in hospital or a nursing home if they were directing their own personal care services.�

Overall, SDC participants get more preventive care; and as a result, �make significantly less use of crisis stabilization and crisis support.� One reason is that SDC gives participants access to a broader range of services. �In Texas,� [where] Medicaid will not cover routine counseling� SDC is providing individuals access to counseling using funds from their individual budgets.�

Higher Satisfaction. In the Netherlands, close to 80 percent of disabled and elderly participants who were eligible for long-term care services and opted for a personal budget had a positive assessment of the services they received, compared with less than 40% in traditional care. In England, 79% of those who employ a personal assistant were very satisfied with the care and support they received, compared to only 26% in traditional care. In the United States, satisfaction rates in the Cash and Counseling programs have hovered in the high 90 percentiles.

I've mentioned the CLASS Act before, now included in the new law. Conceptually, that program is specifically aimed at the concept of Self-Directed Care. I'm not sure, but it may be that in order to qualify for benefits the patient would have to be ordered by a physician into a long-term care facility. That is the case at the moment for Medicare payments to nursing homes. I'm simply not informed enough to say. But between now and 2014 when the first beneficiaries will be able to qualify, that designation may be loosened to include SDC from home or some other location. There is time for such a policy change to be enacted.