Blog | Partnerships and Value

Healthcare organization partnerships with Area Agencies on Aging help reduce the total cost of care

Blog | Partnerships and Value

Healthcare organization partnerships with Area Agencies on Aging help reduce the total cost of care

  • A reduction in spending of $135.50 per Medicare beneficiary per year and a reduction of 0.5 percentage points in low-care nursing home use are benefits of partnerships between Area Agencies on Aging and healthcare organizations in their communities, according to a Health Affairs article.
  • The partnerships with hospitals generally focus on high-cost, high-need patients — those responsible for a larger portion of preventable Medicare spending.
  • The Health Affairs article cites estimates that around 27% of readmissions and 5% of Medicare spending is potentially avoidable with these partnerships.

A recent Health Affairs article details the benefits of partnerships between Area Agencies on Aging (AAA) and healthcare organizations in their communities. The findings show:

  • Counties experienced a reduction in spending of $135.50 per Medicare beneficiary per year, when an AAA has an established partnership with a hospital.
  • Counties experienced reductions of 0.5 percentage points in low-care nursing home use when AAAs partnered with mental health organizations.

The partnerships with hospitals generally focus on high-cost, high-need patients — those responsible for a larger portion of preventable Medicare spending. The article cites estimates that around 27% of readmissions and 5% of Medicare spending is potentially avoidable.

The metric impacted — Medicare Spend Per Beneficiary (MSPB) — measures Medicare Part A and B payments for services provided three days prior to, and 30 days following a patient’s inpatient stay. 

Focus on 5 core services

AAA offers support for social determinants of health (SDOH) that, if ignored, could lead to readmissions and greater use of the healthcare system. They connect with local service providers and focus on five core services:

  1. Caregivers
  2.  Nutrition
  3. Health and wellness
  4. Supportive services
  5. Elder rights

The other metric, reduction in low-care nursing home use, is significant in that it indicates those seniors who are still able to maintain a level of activities of daily living are able to stay in their current residence and avoid costly nursing home stays when they don’t require extensive services.

Takeaway

Tending to seniors’ SDOH can significantly lower the cost of care for patients. AAA are well-established resources for enhancing the health and well-being of a community’s elderly population and a natural partner for hospitals as they strive for a holistic approach to caring for older adult patients.

A closer look at typical services offered — home delivered meals, for example — further illustrates the significance of impact on healthcare costs. A study led by PwC quantified the impact of one meals on wheels (MOW) program in the Dallas community, showing that for 4,700 clients, the MOW program saved on average $2,218 per client for a total of $10.4 million annually. Results included fewer heart attacks and reductions in hospitalizations due to congestive heart failure and strokes. In addition, the program was associated with a 25% reduction in loneliness among seniors — a measure often associated with risk of future dementia.

The relevance and importance of establishing networks of care for seniors living in our communities is especially significant during this time when most are sheltering in place. Many group programs that address social needs have been put on hold, and some senior care programs may be facing challenges in maintaining volunteers. The Washington Post featured a story on how college kids are filling this gap. And in my community, a small suburb of Chicago, there was a call for volunteers to join a COVID-19 senior taskforce, which resulted in a list of over 100 volunteers. I see this as a sign both the young and old are seeking the benefits of a little social connectedness during this time. 

About the Author

Katie Gilfillan

is director of healthcare finance policy, physician and clinical practice for HFMA.

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