Friday, February 27, 2009

Obama Budget Proposal Cuts Money from Home Health Care

Health care stocks dragged down the stock market yesterday after the White House proposed cutting payments to private insurance plans. The Obama administration's $3.55 trillion budget plan for 2010 includes cuts to Medicare and Medicaid. Private insurance plans serving Medicare seniors would take the biggest hit, but hospitals, drug manufacturers and home health agencies also face cuts.

The Dow Jones industrial average fell 88.81, or 1.22 percent, to 7,182.08.

The Standard & Poor's 500 index fell 12.07, or 1.58 percent, to 752.83.

The Nasdaq composite index fell 33.96, or 2.38 percent, to 1,425.43.

What do you think will happen to home health agencies if this new budget proposal is passed into law by Congress? How can we communicate the importance of home health care in saving money by keeping patients out of hospitals?

Give us your comments below.


  1. Anonymous6:40 PM

    contact your senators and rep. Going from 5-6% to .5% increase is an awful idea on a very low margin business. 4% is digestible, but the cuts are draconian and would create a run of bankruptcies trying to compete w/ wage inflation.

  2. Anonymous4:02 PM

    I agree, the government could use a good dose of reality on the benefits of home care related to the cost of the same patient ending up in the hospital. Even more amazing is the quality of hospital based agencies vs. the free-standing agencies quality as reported from Medicare (OASIS data). It appears from the data that the hospital based agencies are providing a 5% to 7% better quality of care compared to the free-standing agencies. In our market, the paid medical directors for free-standing Home Health agencies are being used to draw referrals away from the higher quality hospital agencies, a few exceptions noted. Medicare could improve patient outcomes, and reduce the cost of care, if it would force the referrals to be made on the basis of patient choice and quality instead of allowing the referral patterns to be influenced with paid medical directors. It is clear the paid medical directors are not adding value to the quality of care, as indicated by the aforementioned quality data.

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