This report released October 6, 2009 by the National Center for Assisted Living (NCAL) found that Medicaid spending on home- and community-based services (HCBS) increased 81.5 percent from FY2001 to FY2007, while nursing home spending grew 9.8 percent over the same period.  The report found that, from 2001 to 2007, Medicaid nursing home spending went from $42.7 billion to $46.9 billion while HCBS spending increased from $9.2 billion to $16.7 billion.  In addition, the number of people receiving Medicaid services in licensed assisted living settings increased 44 percent from 2002 to 2009 and HCBS Medicaid waivers now cover services in residential settings in 37 states while an additional 13 states provide coverage directly though the state Medicaid plan. 

From the report's major findings:

Full Report: http://www.ahcancal.org/ncal/resources/Documents/MedicaidAssistedLivingReport.pdf 

National Center for Assisted Living. (2009). State Medicaid reimbursement policies and practices in assisted living. Robert L. Mollica

The United Way of Greater Los Angeles commissioned a study conducted by the University of Southern California (USC) that chronicled the consumption of public services by four homeless people over a two-year period. The study reported five principal cost areas: substance abuse, physical health, mental health, criminal justice, and housing.  The study found that permanent housing solutions yield a 43% cost savings.  For two years, the total cost to provide public services without permanent housing was over $80,000 greater than the cost to provide permanent housing in addition to support services.  When permanent housing was provided, mental health services were the only area with increased costs; however, the associated benefits of regularly seeking mental health services had positive impacts on the system.

From the report:

In order to analyze the costs of public services, investigators focused first on the two-year period before the individu­als were placed in permanent supportive housing. During that time period, two of the four had gone through detox six times costing $23,382. Two of the four had been hospitalized (removal of kidney stone and bladder infection) at a cost of $20,250. All four had used the hospital emergency room for health and alcohol issues (19 visits), costing an additional $7,885. All four had been arrested at least once ($2,756) and spent time in jail ($8,545). One of the four had also served 90 days in prison ($12,060).

United Way of Greater Los Angeles. (2009). Homeless cost study.

Full report: http://www.unitedwayla.org/getinformed/news/Documents/HomelessCostStudy_09_r2_v3.pdf

This study examines racial/ethnic disparities in the upper qualties of total health care expenditure finding that Blacks and Hispanics receive disparate care at high expenditure levels, suggesting prioritization of improved access  among minorities with critical health issues.

Lê Cook, B. & Manning, W. G. (2009). Measuring racial/ethnic disparities across the distribution of health care expenditures. Health Services Research, 44(5), 1603-1621. DOI: 10.1111/j.1475-6773.2009.01004.x http://www.hsr.org/hsr/abstract.jsp?aid=44765784392 

Authors: Benjamin Lê Cook, Willard G. Manning.

This New England Journal of Medicine article analyzes how care management may be able to reduce costs and improve quality for people with complex health care needs.

Bodenheimer, T. & Berry-Millett, R. (2009). Follow the money – controlling expenditures by improving care for patients needing costly services. New England Journal of Medicine DOI: 10.1056/NEJMp0907185.

*Note: The New England Journal of Medicine (NEJM) policies preclude us from providing an article abstract or linking to the NEJM website; however, this article is available in full via the NEJM website. 

Authors: Thomas Bodenheimer and Rachel Berry-Millet.

This Brookings Institution report analyzes health care spending in the United States, reasons for excessive spending and ways to reduce spending without reducing welfare.

From the Report:

Much of the excess of U.S. spending is attributable to the fact that the unit prices of various services are higher in the United States than elsewhere. Some part of the high prices goes to incomes of highly trained personnel. But in some cases, such as outpatient services, much of the price difference goes to support inefficient production made possible by a lack of competition or effective regulation.4 High prices sometimes serve as a proxy for high quality— more or better equipment or better-trained personnel. We know of no hard evidence showing that the quality of high-price U.S. services is better than that of corresponding services elsewhere or whether and to what degree it accounts for higher U.S. prices. In some cases, however, price differences are so large (for example, magnetic resonance imaging studies in the United States and Japan) that no plausible quality difference can explain the gap.

Brookings Institution. (2009). Is health spending excessive? if so, what can we do about it? the delicate task of reining in spending without harming our welfare. Henry J. Aaron and Paul B. Ginsburg.

Full report: http://www.brookings.edu/~/media/Files/rc/articles/2009/0910_health_spending_aaron/0910_health_spending_aaron.pdf

This Agency for Healthcare Research and Quality (AHRQ) report finds that health care spending on seniors rose by $106 billion from 1996 through 2006, reaching $333.3 billion in 2006, and that spending increased 66 percent on prescription drugs, 58 percent on physician visits, and 20 percent on hospital stays. 

From the report:

Agency for Healthcare Research and Quality. (2009). Trends in health care expenditures for the elderly age 65 and aver: 2006 Versus 1996. Statistical Brief 256. Steven R. Machlin.

Full report: http://www.meps.ahrq.gov/mepsweb/data_files/publications/st256/stat256.pdf