For anyone who has spent time in a hospital for an illness, injury, or other health issue, discharge usually signals progress—the acute phase has passed and it’s time to continue recovery elsewhere. However, in today’s managed-care environment, discharge decisions often reflect insurance limits and cost concerns, which can lead to patients leaving the hospital earlier than they or their families might prefer.
Many clinicians and families believe that certain patients—such as those recovering from a stroke or a joint replacement—may do better receiving post-acute care and rehabilitation at home rather than in a hospital or skilled nursing facility. There are good reasons for this belief: for example, the risk of acquiring an infection is generally lower at home than in a healthcare setting.
Cost, however, is a major driver of the choice to send patients home. Payers, including Medicare, often view home-based medical and rehabilitation services as less expensive than care in a skilled nursing facility. But is home care truly less costly once all factors are considered?
Recovering at home or in a skilled nursing facility
A recent study by researchers at the University of Pennsylvania and the University of Chicago examined Medicare data from more than 17 million hospitalizations to answer that question. They compared outcomes for post-acute patients discharged to skilled nursing facilities with those sent home with home health services.
The study found that patients discharged home had higher 30-day hospital readmission rates. At the same time, Medicare’s spending for the initial hospitalization, post-acute care, and subsequent readmissions was significantly lower for those who recovered at home. There were no meaningful differences in 30-day mortality or improvements in functional status between the two groups.
In other words, Medicare saved money when patients received post-acute care at home, but patients saw little clinical advantage and faced a somewhat higher risk of readmission.
There are additional factors the study does not fully capture when assessing the real cost and value of home-based recovery.
The level and frequency of care
Patients in skilled nursing facilities typically receive continuous, around-the-clock care from licensed professionals. By contrast, many patients recovering at home receive a small number of one-hour visits per week from physical or occupational therapists and visits from home healthcare providers—often CNAs or LPNs with more limited training than facility staff.
To cover the remaining care needs, patients at home may rely on home care aides who often lack formal clinical credentials. Medicare covers only a limited number of hours of this type of assistance. The rest of the care often falls to unpaid family members without medical training, or the patient must pay out of pocket for additional paid caregivers.
The odds of a hospital readmission
These differences in supervision and care intensity help explain why home-based care costs less for Medicare but leads to higher readmission rates. Skilled nursing facilities continuously monitor patients and can address emerging problems before they become severe. In contrast, issues at home may go unnoticed longer because family caregivers or aides are not present around the clock and may miss early warning signs.
Additionally, family members who are exhausted or stressed by caregiving duties may be more likely to call emergency services for concerns that trained staff might manage without hospitalization. That pattern can increase readmissions or unnecessary emergency visits.
The cost to Medicare vs. the patient
The university study reported that Medicare spent roughly $5,000 less over two months for patients who received post-acute care at home compared with those in skilled nursing facilities. From Medicare’s perspective, home care is less costly. But direct payer costs don’t tell the whole story.
Industry surveys show the average monthly cost of a private room in a skilled nursing facility is substantially higher than the cost of home health services. Skilled nursing care provides continuous, professional supervision, and that higher price reflects the intensity and availability of services. Home health aide costs are lower, but those figures often represent only a few hours of care per week. Missing hours must be covered by unpaid family caregivers or by paying for more private help, which can be expensive and strain families financially and emotionally.
Paying the price for care
There’s no place like home, but for many patients leaving the hospital, home-based post-acute care means less continuous clinical oversight and fewer hours of professional care. Families frequently fill the gaps, either through unpaid care or by hiring additional help. Patients recovering at home face a higher likelihood of hospital readmission, while those in skilled nursing facilities receive more intensive, around-the-clock care from trained professionals.
Although Medicare may spend more when patients recuperate in a skilled nursing facility, that higher expenditure supports a greater level of care and may reduce the risk of returning to the hospital. For some patients and families, that trade-off—higher cost for greater supervision and potentially fewer readmissions—may be worth the investment.