There’s no Place like Home. That is also true for Healthcare.

When deaths due to COVID-19 spiked in nursing homes and long-term care settings, the desperate need for better options to keep seniors safe and cared for became clear.

The clearest, simplest choice: Keep older people in their homes. Doing so not only cuts costs but also, when done properly, means better care, according to health plan executives and others who have studied options for home- and community-based services.

The problem with delivering care to older adults at home is that the healthcare system is oriented toward having almost all patients get care in doctors’ offices and even in more costly places, such as hospitals and nursing homes, says Edward McEachern, M.D., executive vice president and chief medical officer for PacificSource Health Plans, a nonprofit health insurer serving members in Idaho, Montana, Oregon and Washington.

Traditionally, Medicare and Medicaid programs have also contributed with benefits that cover care in nursing homes and other facilities after hospitalization if people have trouble with living independently and managing the “activities of daily living,” such as bathing, cooking or cleaning, according to Sarah L. Szanton, Ph.D., dean of the Johns Hopkins University School of Nursing. Szanton helped develop the nursing school’s Community Aging in Place—Advancing Better Living for Elders (CAPABLE) program (see “Johns Hopkins program saves money” on next page ). The program is now available at 30 sites across the country, and three states — Colorado, Connecticut and Massachusetts — are incorporating it into their Medicaid programs, according to Szanton.

Later this year, PacificSource plans to introduce one of the initiatives that health insurers use to keep their members who are eligible for both Medicare and Medicaid at home: the Program of All-Inclusive Care for the Elderly (PACE). The program provides medical and social services to those who are frail and older but who are still capable of living in a place other than a nursing home or a long-term care facility.

Most PACE participants are “dual eligibles,” which means they can enroll in both Medicare and Medicaid. They are typically old enough (aged 65 and older) to enroll in Medicare and have a low income to qualify for Medicaid, although the income thresholds for Medicaid vary widely by state. “PACE has a really good body of literature around its effectiveness and utility,” McEachern says.

To qualify for PACE services, people can be insured by Medicare, Medicaid or both. But PACE is available only in states where the Medicaid program has agreed to offer it. Requirements include being at least 55 and having a state-certified need for nursing home care while also being able to live safely in the community with the help of PACE services.

For those enrolled in PACE programs, Medicare and Medicaid pay for medical services that the PACE healthcare professionals deem necessary, such as doctor visits and hospital care and even short stays in a nursing home. PACE also covers services designed to tackle social determinants of health, such as recreational services. Most participants pay nothing, although those that aren’t covered by Medicaid pay a monthly premium for long-term care insurance and a Part D drug plan.

PACE has grown, but it is not a huge program. Since 2012, enrollment in has more than doubled to 55,000 participants in 144 PACE programs in 30 states, according to the National PACE Association, a trade group in Washington, D.C. That’s a small fraction of the more than 12 million dual eligibles.

The skewed distribution of healthcare spending is one of the arguments for doing everything possible to keep people at home. One of the best sources of data about the distribution of costs among patients is the federal Agency for Healthcare Research and Quality (AHRQ). Early last year, AHRQ reported that in 2018, 1% of patients accounted for about 21% of the nation’s total spending on healthcare.

Other sources say people with chronic conditions and functional limitations that make the activities of daily living difficult are four times more likely than the general population to be among the 5% costliest users of health services. Yet during most medical visits, people’s ability to function in the community and live at home is rarely addressed. That blind spot, say experts, is one of the reasons people end up in a hospital or a nursing home instead of staying in their homes.

PacificSource’s cost distribution numbers tell the same basic story. About 10% of its 575,000 members account for about two-thirds of the insurer’s annual spending on medical care, McEachern says.

A comprehensive set of post-acute or home-based care options would allow PacificSource to cut the spending for those 58,000 high-cost members by about 33%, McEachern estimates. “That’s what we’re in the process of developing,” he says.

A primary goal of developing home-based care options is to keep members out of the hospital. To do that, PacificSource classifies members into five categories: healthy, stable, at risk, struggling and in crisis. “The struggling and in-crisis folks are easy enough to identify ahead of time because the pathophysiology of their diseases continues to progress,” he explains. Also, physicians and other providers know that when their patients have certain diseases, their functional health status could very likely decline.

The problem for PacificSource — and much of American healthcare — is that identifying future high-cost patients is easier than getting them the care they need. “A lot of what these patients need is things that providers and health plans don’t typically do, such as food, housing, transportation or other social determinants of health,” McEachern notes. “These patients need a different system of support, and that’s where the PACE program can help us.”

For the past year or more, McEachern and colleagues at PacificSource have been gathering information about what works by studying the example of Fallon Health, a nonprofit health plan in Worcester, Massachusetts, that started a PACE program in 1995 and is one of the oldest programs in country.

Today, Fallon has about 250,000 members, 62% of whom are in government programs such as Medicare and Medicaid, including 1,195 PACE participants in Massachusetts and 130 members at Fallon Health’s Weinberg-PACE programin Buffalo, New York, says Robert Schreiber, M.D., vice president and medical director for Fallon’s PACE program.

In Fallon’s PACE programs, doctors serve as primary care physicians and deliver care at home along with other providers on a clinical and support team for each participant either in the member’s home or in an adult day center, depending on which site is best for the patient, says David Brumley, M.D., Fallon’s interim chief medical officer and vice president of medical affairs. The goal is to ensure that each participant gets the proper medication and timely care for their conditions. “Ultimately, if you do that correctly, it saves money,” Brumley continues. “If we can help them get the care they need in the place that they need it most effectively, then the financial piece will follow.”

National PACE Association data show that 95% of its PACE participants live in places other than nursing homes or other long-term care settings and that Medicaid programs pay 13% less on average than the cost of caring for a comparable population getting more traditional care. PACE participants also have a 24% lower hospitalization rate than beneficiaries who are dual eligible and get nursing home care under Medicaid and fewer than one emergency room visit, on average, per member per year, according to the association.

In addition to its PACE program, Fallon runs a program called NaviCare for older adults enrolled in MassHealth, the state’s Medicaid program, some of whom are dual eligible with Medicare coverage. NaviCare is a special needs plan for 9,200 older adults who want to remain at home but are ineligible for PACE. A primary care team works with each member to coordinate care with family members and other health care providers.

In NaviCare, MassHealth and Medicare (if applicable), covers all health care costs so that most participants have no monthly premiums, copayments, coinsurance or deductibles. For NaviCare members in long-term care, however, MassHealth defines how much some patients must pay based on their income.

If needed, NaviCare members can get in-home care, including help with bathing, dressing and making meals. They also get transportation to an adult day care settings for recreation, shopping and social visits with friends and family.

Joseph Burns is an independent journalist in Cape Cod, Massachusetts.