The Future of Home Care: A New Millennium... A New Home Care

CARING Magazine
July 1999
By Dr. Robert A. Fazzi 

Home care faces many changes - from funding to changing patient populations. Agencies need to assess what they are doing and build into their missions services that take into account these changes. How can they do that?

Home care is moving into more than a new millennium. It is moving into a new set of realities - a set of realities that will reshape and redefine the very philosophical and programmatic pillars that have historically served as the foundation for home care agencies and the home care community.

Three points are now more clear than ever. First, there are very specific driving forces, three in particular, that will lead to changes in the definition and focus of home care. These forces are predictable and inevitable. Together, they will redefine services and the focus of health care in the United States and throughout the world. Second, in response to these driving forces, home care agencies will have new options. To take advantage of these options, agencies will need to redefine and broaden their vision, mission, and programs. Third, agencies need to initiate specific actions now that will strengthen them in the short run and position them for a much more dynamic future.

The Driving Forces

The first and most obvious driving force is the aging of America. The number of people and the actual percentage of the population over the age of 65 is growing dramatically. And guess what? We are not talking about the aging tidal wave – the baby boomers, who are steadily moving toward the magic age of 65. The baby boomers are coming and they will be an overwhelming force when they reach the Medicare-eligible age. But even the first wave (those born in 1945) will not reach 65 until the year 2010. The aging of America is happening even before the baby boomers’ crisis hits.

Figure 1 shows that the number of people over the age of 65 has grown steadily since the 1900s, and their numbers will clearly accelerate in 2010. The number of older Americans increased by 2.8 million (9.1%) since 1990, compared to an increase of 7.0% for the under-65 population. People 65 and older are projected to represent 13% of the population in the year 2000 and a staggering 20% by 2030.

Number of Persons 65+ Years: 1900 to 2030 (numbers in millions)

1900 3.1
1920 4.9
1940 9.0
1960 16.7
1980 25.7
1997 34.1
2000 34.7
2010 39.4
2020 53.2
2030 69.4

 Figure 1 Note: Increments in years are uneven. Based on data from the U.S. Bureau of the Census

The second driving force is in some ways one of the causes of the first. People are healthier and are living longer. One reason is that they are more aware of health-related issues and take better care of themselves. There is not a commercial magazine that doesn’t have an article on eating better, taking better care of oneself or outlining better ways to exercise and work out in order to maintain health and flexibility. One of this country's most popular magazines, Prevention Magazine, grew substantially because of its focus on all aspects of health.

Another factor that has led to longevity is the improvements in medical care and medical technology. Medical care and medical technology is growing at an accelerated rate. Science is now able to map humans' entire DNA structure. Operations that kept people in the hospital for two weeks are now done as outpatient surgery. New developments in microbiology, hormone therapy, transplants, non-invasive chemical therapy, etc. are helping people to live healthier and longer. 

In fact, in 1997 the 65-74 age group (18.5 million) was eight times larger than the same age group in 1900. While impressive, it is nothing in comparison to the 75-84 age group (11.7 million), which was 16 times larger, and the 85+ group (3.9 million), which was 31 times larger than the same age group in 1900 (see Figure 1).

With more and more people getting older and living longer, the third driving force is more easily understood. We face a major financial and resource dilemma in trying to take care of people over 65. Both Social Security and Medicare programs will experience severe financial difficulties in the near future. According to a report in the January 28, 1999 issue of the New York Times, "the ratio of workers paying taxes to retirees drawing benefits has long been shrinking. In 1950, there were 16 workers for each Social Security beneficiary. Today, there are slightly more than three. By the second or third decade of the next century, when most baby boomers will have retired, actuaries project there will be only two people at work for each person receiving benefits. When that happens, unless changes are made, the trust fund will go into the red."

Some economists and politicians think the problem will develop for Social Security around 2034; others think it will be earlier. The Medicare trust, a major source of funding for services provided by home care, is facing a similar crisis. According to a March 31, 1999 article in the Boston Globe, the trust is expected to run out of funds sometime around 2015. While there may be some disagreement as to exactly when it is going to happen, there is no doubt in anyone’s mind that if we don’t do something soon, we will not have the resources to take care of our aging population. We need to put more money into Social Security and Medicare and/or reduce our cost. There is no choice.

When you put this all together, what do you have? A population that is aging and living longer. It has the strong potential to strain the health care and economic resources in this country. The ultimate goal has to be the development of a care system that is more cost-effective and more responsive to these new realities. And when you look at the issue of cost-effective health care services, it is easy to see the preferred option… community based home care services.

Comparison of Hospital, SNF, and Home Health Medicare Charges, 1995-1997

  1995 1996 1997
Hospital charges per day $1,909 $2,071 $2,121
Skilled nursing facility charges per day 401 443 454
Home health charges per visit 84 86 88

Figure 2

Sources: The 1995 and 1996 hospital and SNF Medicare charge data are from the Annual Statistical Supplement, 1997, to the Social Security Bulletin, Social Security Administration (December 1997). Home care information from HCFA, Office of Information Services. Note: Additional years are projected using consumer price index forecasts from the Bureau of Labor Statistics' web site and "The Economic and Budget Outlook: Fiscal Years 1999-2008" Congressional Budget Office web site (January 1998).

On the NAHC Home Page (, the association provides a summary of survey studies that were conducted in the past several years. These studies compared inpatient care to home care costs for a specific group of patients. The cost savings data for six of these studies are summarized in Table 2. The information has been aggregated at a monthly level for purposes of comparison.

When you put it all together, what is clear is that community based services and home care services are destined to become the focal point for the provision and treatment of a broadening range of health care services. And when you factor in that many of the new developments in medical treatment are non-invasive procedures that could ultimately be provided in the home (it wasn’t that long ago that all infusion services were provided only in hospitals), it is inevitable that home care is on the cusp of a new and expanding future.

But, That’s Not All

The story doesn’t end here. There is another factor that has implications to the future of home care. It is a factor that has limited the growth of agencies. It is a factor that may have been stimulated by the drive for Medicare reimbursements and it is one that has certainly affected the leaders in agencies throughout the country. It is the mindset that many agencies and Boards have had. It is one that defines home care as services restricted to homebound patients. That’s where the money was. That’s where agencies focused their attention. And while the services are certainly warranted, this myopic view is clearly limiting.

As the population ages, they will certainly need medical care and traditional home care services. According to the Administration on Aging, in 1995, 28.3% of older persons assessed their heath as fair or poor (compared to 9.4% for all persons). There was little difference between the sexes on this measure, but older Blacks were much more likely to rate their health as fair or poor (43%) than were older Whites (28%).

Limitations on activities because of chronic conditions increase with age. In 1995, over one-third (37.2%) of older persons reported they were limited by chronic conditions. Among all elderly, (10.5%) were unable to carry on a major activity. In contrast, only (13.9%) of the total population were limited in their activities, and only (4.3%) had a major restriction. In 1994-95 more than half of the older population (52.5%) reported having at least one disability. One-third had a severe disability(ies). The percentages with disabilities increase sharply with age. Over 4.4 million (14%) had difficulty in carrying out activities of daily living (ADLs) and 6.5 million (21%) reported difficulties with instrumental activities of daily living (ADLs).  ADLs include bathing, dressing, eating, and getting around the house. ADLs include preparing meals, shopping, managing money, using the telephone, doing housework, and taking medication.

Percent With Disabilities, By Age: 1994-95

Age Group % with Disability % with Severe Disability
65+ 52.5% 33.4%
15-64 18.7% 8.7%
0-14 9.1% 1.1%

Figure 3

Source: Current Population Reports, "Americans with Disabilities, 1994-95," P70-61, August, 1997


Most older persons have at least one chronic condition and many have multiple conditions. The most frequently occurring conditions per 100 elderly in 1994 were: arthritis (50), hypertension (36), heart disease (32), hearing impairments (29), cataracts (17), orthopedic impairments (16), sinusitis (15), and diabetes (10). While many of the ailments listed do not make someone homebound, they often require some level of support and services. And that’s where additional options for home care services lie.

Towards a New Definition for Home Care

The future of home care will not be one that focuses on "providing medical services for people who are legally defined as home-bound." Given the aging of the country AND the varying needs of those people who are aging, that definition is far too limiting. True, medical services for homebound people will be part of most agencies' core business. They will not however, be their only business. For many, these traditional services may not even be the majority of what they do.

The future of home care will be one that focuses on more than just services for home- bound people. The future of home care will focus on the needs of a variety of populations who live in the community. This includes homebound patients. It also includes others. 

The future of home care will be one of providing a full range of services that help people of all ages live in the community with maximum levels of independence and self-sufficiency. The driving forces will be the functional status of individuals and the types of services they might need. Figure 4 provides a graphic view of this relationship.


Figure 4

In reviewing Figure 4, what becomes clear is that services are geared to the functional status of the individual. When we are healthy, we need limited services. Exercise or diet classes for example. As our functional status begins to decline, the level of services we need begins to increase. Home bound is just one level of support. It is an important level. It is a type of support that home care agencies are very good at providing. It will always be needed. But it is just one level of support.

By redefining the mission of home care to be that of helping people live in the community with the highest level of independence and functioning, it opens up a new range of services. If fact, every service listed above with the possible exception of nursing homes would be within the purview of home care. Services might range from exercise and diet classes to meals-on-wheels to medical home treatment to shopping services to adult and intergenerational day care to telephone companion programs to small assisted living services to…  The opportunities are unlimited. 

A New Millennium…  A New Future

As agencies struggle with IPS, PPS, managed care and a plethora of other challenges, it is sometimes hard to see beyond today. The fact is, we have to deal with today in order to be around tomorrow. But, we must also recognize that tomorrow offers new challenges as well as new opportunities. There are two actions agencies should consider initiating now.

First, begin the process of redefining the mission and focus of your agency. Most agencies normally do this through a strategic planning process, one that involves Board and staff. In redefining you mission, don’t abandon your traditional services. These will be your core services. For most agencies, the strategy will be to build on core services while beginning to explore new directions and new opportunities. 

By starting the process now without abandoning your primary focus, you begin giving staff a sense that this is a dynamic agency, one that is forward thinking and recognizes that there will be significant changes coming in home care. By doing it now, you begin the process of gaining the buy-in and commitment of staff to consider doing things that they had never done in the past.

The second action is to begin exploring options. What gaps are now emerging? Are there services that your existing population would like that you are not providing? Is there a market for Adult Day Care or Intergenerational Day Care for frail elderly? Would a phone or volunteer companion service that builds off emergency response services be of interest to a specific market? By exploring options now, you will be in the position to aggressively respond to the newly emerging needs and new markets that will surely be developing.

We are entering a new millennium. Just as the numbers on the calendar will look different and a little strange (we all grew up with dates starting with 19, i.e. 1945, 1995), so too will home care look different and a little strange. But, just as we will quickly become accustom to dates starting with 20, so too will we become comfortable with the new role and destiny of home care. 

The question that remains is not whether the changes will occur. They will occur. The question is, "Will we be observers of the new changes or active leaders in helping to direct the growth and destiny of home care and home care services?"