VNASC – Evolution of Home Care

For over a century, home care in the United States has been considered a "natural" kind of care, belonging to the family and associated with the notions of comfort, compassion, and security. Families have accepted enormous burdens of responsibility in caring for their sick and disabled loved ones and increasingly have turned to home care providers for help.

The following timeline briefly reflects on how many of the specific circumstances, equipment, and procedures in home care have changed. Yet the essence of home care services--the personalized care, the warmth, and the overwhelming interest in improving the lives of the ailing and infirm—remains the same. The idea of sending a doctor, nurse, therapist, aide, or other caregiving specialist into the homes of our sick and vulnerable has retained its special appeal as a practical, necessary, and family-oriented alternative to institutional care.

Organized home care began at a time when the most seriously ill were sick at home and when the home was the workplace for most nurses. This was the most dramatic period in the history of American health care. It was a time dominated by infectious diseases and high death rates, as well as by exciting advances in the medical sciences and public health. Although the origins of the modern hospital also can be traced to this era, sickness was a misfortune experienced by most at home.

The arrival of the trained nurse eased the family's burden of caring for the sick at home. It also assisted new mothers by providing them with necessary prenatal care, helping them with home deliveries, and educating them on how to care for their babies. The demand for visiting, public health, and private duty nurses escalated rapidly as their roles gained practical and symbolic appeal. Research indicates that the home care movement varied from community to community, had changing sources of sponsorship, and was dominated by small, mostly "voluntary" philanthropically-financed organizations.

The visiting nurse captured the interest of early 20th century reformers, who were concerned that the immigration, industrialization, and the infectious diseases of the poor were destroying life in their once cohesive cities. Many regarded the visiting nurse as the solution to these urban threats. Her brief visits aimed to care for the sick, teach family members how to care for the patient, and above everything else, protect the public from the spread of disease through lessons in physical and moral hygiene. By 1905, 455 visiting nurses were employed by 171 associations.

During this period, many trained and untrained nurses worked as freelance or private duty nurses in patient's homes. Unlike the visiting nurse, who made brief visits to several patients, these nurses remained with one patient throughout the duration of their illness. They were on duty 24 hours a day, often for weeks at a time, as the employees of the middle class and the affluent. Like the visiting nurse, their patients included the acute ill as well as the chronically physically and mentally ill. They cared for patients during home deliveries and surgical procedures, as well as postpartum.

By this time, 1,413 visiting nurses were working on behalf of 566 associations. Sponsorship of home-based care changed, however, with the growth of publicly supported programs by boards of health and education. Emphasis shifted to public health nursing. Trained nurses were sent into schools and homes of the poor to teach skills for healthy living. The role of the public health nurse was to teach concepts of disease, personal responsibility for health, and the methods of treatment arising from recent advances in medical science and public health.

During this time, Lillian Wald, who was regarded as "the mother of public health nursing" urged the Metropolitan Life Insurance Company to hire visiting nurses to care for its policyholders during illness. For a modest fee per policy, she believed that the company could reduce the number of death benefits paid and extend home-based nursing services to more members of the working class without additional fundraising. Metropolitan agreed to test the proposal.

Metropolitan Life decided to offer visiting nurse services to its policyholders throughout the country. It arranged for existing visiting nurse services to provide care. In cases where this was not possible, the company hired its own nurses.

The American Red Cross established a rural visiting nurse service for the "sick country person" nationwide. Following World War I, the agency launched an intensive effort to help its local chapters initiate visiting nurse services in their communities. The response was so tremendous that the Red Cross could not keep up with the chapters' demands for nurses.

An average of 68 Red Cross visiting nurse programs opened each month. At its peak, the organization had developed 2,100 new services across the country. Metropolitan Life added visiting nurse services available to 90% of its 10.5 million policyholders living in 2,000 cities in the United States and Canada, creating the first nationwide system of insurance payment for home-based care.

The work of visiting nurses was sponsored by 3,183 local public and voluntary agencies.

Home-based nursing care reached a turning point. Urban death rates were declining dramatically and infectious diseases were being replaced by chronic, degenerative diseases as the leading cause of death. Hospital-based care was being sought by medical, surgical, and obstetrical patients of all economic classes and private duty nurses followed them into the institutional setting. Although it still existed as an option, home care became increasingly marginal to the hospital-based system that came to dominate American health care.

The growing centrality of the hospital meant that fewer patients were sick at home or required skilled home care by a trained nurse. Many nursing leaders campaigned for the creation of comprehensive, coordinated community-based nursing services, however the absence of an influential or cohesive constituency prevented them establishing this type of system. In 1952 Metropolitan Life terminated its visiting nursing program as the number of visits to policy holders declined and the cost of the service rapidly grew. Similarly, the Red Cross national nursing service had closed by this time.

The rebirth of home-based care gradually began as the issue of where patients should be cared for was reopened. Responding to rising hospital costs, an increase in chronic illness, and a rapidly growing elderly population, the home regained its status as a less costly and more appropriate place for care.

Home care developed in the form of three types of services: hospital-based home care, community-based home health services, and homemaker services - usually under the auspices of family agencies. The funding sources for these agencies were varied depending on private contributions, allocations from the United Way, local health and welfare departments, and patient fees for services. Long before the enactment of Medicare, the growth in the number of chronically ill and disabled applicants for all forms of care in the home was exerting extreme pressure on these service programs.

Medicare legislation was enacted to provide home care benefits, primarily skilled nursing and therapy of a curative or restorative nature, for the elderly. Certification to participate in the program was limited to nonprofit home care agencies and health departments. Approximately 1,275 organizations initially were certified. Services expanded and therapists, home health aides, homemakers, social workers, and nutritionists joined the home care team as Medicare provided coverage for this coordination. Medicaid, a state medical assistance program for the poor, also was established with nonmandatory coverage for some home care services, including nursing and home health aide care and medical supplies and equipment. The Older Americans Act (OAA), a program designed to help maintain and support older persons in their homes and communities to avoid unnecessary and costly institutionalization, also was initiated during this time with some home care funding. Home care entered its current period of rapid growth.

The number of Medicare-certified agencies reached 1,753. Home health expenditures amounted to less than one percent of the total Medicare budget.

Home care began to be seen by health policy planners as a cost-containment measure and as an alternative to institutional care. In 1973 Medicare home care services were extended to certain disabled younger Americans. A series of congressional investigations and hearings revealed poor conditions and abusive activities in many nursing homes; inappropriate institutionalization of many consumers; and an overwhelming feeling on the part of consumers (30%-50% according to estimates) that they didn't want to be in these institutions. Numerous demonstration projects were launched, with consumers expressing an tremendous satisfaction with home care.

In 1980 the number of agencies certified to participate in the Medicare program nearly doubled since 1967, climbing to 2,924.

One year later, proprietary agencies were admitted into the Medicare Program.

In 1982, the National Association for Home Care (NAHC) was founded to serve as the American home care community's voice before Congress, regulatory agencies, courts, and the news media. The Association's mission which still exists today, was to promote quality care for home care and hospice patients; preserve the rights of caregivers; effectively represent all home care and hospice providers; and place home care at the center of health care delivery. Shortly after opening its doors, NAHC commissioned the first in-depth market and opinion survey on home care. After discovering that only 18% of the American public knew about home care, the Association launched a national campaign to heighten public awareness. A 1985 poll indicated that public awareness of home care had climbed to 38%.

As hospital stays shortened, the percentage of Medicare patients discharged to home health care increased from 9.1% in 1981 to 17.9% in 1985. In addition, federal, state, and local governments spent a total of $4.5 billion on home-based services, while an estimated additional 2-4 times this amount was spent by families for privately purchased home-based care in 1985.

The number of Medicare-certified home care agencies leveled off at around 5,900 as a result of increasing Medicare paperwork and unreliable payment policies. Medicare adopted documentation and claims processing practices that created general uncertainty among agencies about what services would be covered. The result was a "chilling" effect in which some Medicare covered claims were diverted to Medicaid and some patients went without care. The home care industry, along with the rest of health care, was experiencing a personnel shortage.

According to the National Medical Expenditures Survey (NMES), home care spending totaled $52 billion in 1987. An estimated 5.9 million individuals, or 2.5% of the US population, received formal home care services. Of these recipients, nearly half were older than the age of 65, and the amount of home care they used tended to increase with age.

In response to the Medicare denials crisis, in 1987 a coalition of US Congress members, led by Representatives Harley Staggers and Claude Pepper, consumer groups, and NAHC filed a lawsuit against the Health Care Financing Administration. The successful conclusion of this case in 1989 resulted in a rewrite of the Medicare home care payment policies. These policy clarifications allowed the program, for the first time, to provide beneficiaries with the level and type of services that Congress originally intended.

Caring for the sick at home once again has assumed a more significant place in our health care delivery system. With expanded services and advanced technology available through home care organizations, more and more people, who at one time would have been confined to a hospital or other institution, now are able to remain at home. Services range from professional nursing and home care aide care to physical, occupational, respiratory, and speech therapies. Social work and nutritional care, as well as laboratory, dental, optical, pharmacy podiatry, x-ray, and state-of-the-art medical equipment and supply services, also are provided.

Services are paid for directly by the patient and his or her family members or through a variety of public and private sources. Public third-party payors include Medicare, Medicaid, OAA, the Veterans Administration, and Social Services block grant programs. Some community organizations also provide funding to help pay for home care services. Private third-party payors include commercial health insurance companies, managed care organizations, CHAMPUS, and workers' compensation.

In 1992, NAHC commissioned a poll by Lou Harris and Associates, which found that 89% of the American public knew about home care and supported its expansion within federal programs.

During this time spending by Medicare, the largest single payor of home care services, accounted for more than one-third of total home care expenditures. the Federal Bureau of labor Statistics declared home care as the fastest growing segment of health care and the second fastest growing industry in the United States. It projected that half a million new jobs will be created by the home care industry between 1992 and 2005 - an increase of 128%.

While lawmakers engaged in the national debate over health reform in 1994, NAHC helped establish home care as a central component of both acute and long-term care in every major plan introduced before Congress. The following year NAHC commissioned a project with the Colorado Center for Health Policy and Services Research to assist agencies in implementing outcome-based quality improvement. In 1996 the home care industry joined NAHC in developing a prospective payment system (PPS) proposal that would overhaul the way home care companies are reimbursed under Medicare by providing desirable, market-like incentives for the efficient and effective provision of care.

In 1997 home care continues to be a diverse and rapidly growing service industry. Today, an estimated 20,215 home care organizations provide health and supportive care services to more than 7 million Americans with acute, long-term, or terminal health conditions. This number consists of 10,027 Medicare-certified home health agencies, 2,154 Medicare-certified hospices, and 8,034 home health agencies, home care aide organizations, and hospices that do not participate in Medicare. Annual expenditures for home care are expected to exceed $38 billion this year. Nearly 82% of all accredited medical schools now offer home health care training in their curricula.

As the population ages the national expenditures for health care are growing in leaps and bounds. The $2.1 trillion expended represents 16 % of the gross domestic product and is expected to grow another 19.6% by 2016.

The Prospective Payment System was implemented in home health care in October of 2000. The system bases the payment rates on patient characteristics including clinical severity, functional status and the need for therapy services. The home health PPS pays on a 60-day episode. The rates are adjusted for the geographic area through the area wage index and payments for both low utilization and high utilization outliers.

Medicaid is the second largest payer of services in home health care. In Connecticut the payment from Medicaid has lagged behind the cost of care for several years.

While managed care has begun to grow in some areas of the country, Connecticut is still experiencing less penetration from managed care programs, especially in the Medicare market.

Statistics provided from the National Association for Home and Hospice reports that in 2000, 7.2 million individuals received home care services. Of these, 69% were over age 65 and 64% were women. The number of individuals receiving home health care has decreased as the reimbursement from the Medicare program has decreased.

The future of home health care is certain as the population ages. But the shrinking health care dollar will influence the type and quantity of care provided. Emphasis on quality and efficiency will continue and the competition for qualified staff will challenge providers.

Source: National Association for Home Care: Basic Statistics about Home Care. Updated 2007

Source: National Association for Home Care: NAHC gratefully acknowledges The Haworth Press, Inc., for authorizing the inclusion of excerpts from Karen Buhler-Wilkerson's "Home Care The American Way: An Historical Analysis", Home Health Care Services Quarterly, 12 (1991): 5-18