Home Health Care vs. Hospital Care

April 1, 2021
April 1, 2021

The model for delivering healthcare in the United States has changed over the last years—and it has changed in some pretty big ways. While there have been substantive changes in the ways in which healthcare is paid for, it is also true that the “where” of how healthcare is delivered may represent one of the biggest changes as more care continues to move to a variety of outpatient settings.

Hospital At Home

Provision of acute care services is almost exclusively the domain of acute care hospitals in the U.S., but hospital at home programs are flourishing in counties like Canada, Australia, and Great Britain. These countries have payment policies that support the provision of care by a home health care nurse, in less-costly environments. For example, in Victoria, Australia, as much as 6% of all hospital bed days are actually provided at home. This type of substitution can produce dramatic savings and help avoid the inpatient bed shortages that have been fairly prevalent recently. Moreover, evolving technology is making high tech care at home more practical as a means of avoiding common patient care issues in hospitals.

In the U.S., most home healthcare is sub-acute. However, the hospital at home model has been tested and developed in this country by one of the best-known medical institutions in the country—the Johns Hopkins Schools of Medicine and Public Health. The model is also being implemented at other sites as a means of treating primarily older adults by a home health care nurse, while avoiding patient care issues in hospitals, and achieving gains in cost-effectiveness, patient safety, quality, and not surprisingly, patient satisfaction.

While single payer systems in other countries have embraced this model of care, U.S. payers have not been so interested. American hospitals that have implemented hospital at home programs rely primarily on grant money for reimbursement for care as the efficacy of this model is studied. Home health care in the U.S. remains a supplement to inpatient care, even as we all recognize the advantages of lower home health care cost.

Healthcare at Home – Costs and Benefits

Payer reluctance is somewhat surprising, as Hopkins early trials found that the cost of providing care at home was about 32% less than the same care provided in an inpatient setting. This care model also reduced the length of stay by about one-third and also reduced the incidence of delirium from 24% to just 9%. There appears to be substantial financial and clinical benefits. More recent data from a study published by the Journal of General Internal Medicine shows even more substantial savings with the average daily cost of an inpatient hospital stay at roughly $6,200.00 and the average cost of a home health visit at just $135.00 (Levine et al, 2018).

While certain aspects of this care model such as cost, length-of-stay, incidence of delirium, etc. may be fairly easy to quantify, other aspects might be a bit more difficult to quantify. The care model was originally adopted in order to treat elderly patients who needed acute care but were reluctant to be hospitalized or who were at significant risk of hospital acquired infections which may mean that elderly patients are somewhat more likely to get the care that they need. Even less tangible is the patients comfort level at home versus in an inpatient setting.

Home Health Care – An Attractive Solution in a Value-Based System

The shift from volume to value in healthcare may help both payer and providers be more proactive in seeking more cost-effective alternatives to inpatient care. Research on the topic is largely in preliminary stages, but a 2019 study published by the American Journal of Accountable Care (Howard et al, 2019), estimated that if acute care for just five conditions (congestive heart failure, chronic obstructive pulmonary disease, urinary tract infection, and cellulitis) could be provided in a home setting, it would result in as much as a $3.7 billion in savings. This same study also found substantial clinical advantages for home health care.


Levine, David M, Ouchi, Kei, Blanchfield, Bonnie , Diamond, Keren, Licurse, Adam, Pu, Charles T. Schipper, Jeffrey L. (2018, February 06)  Hospital-Level Care at Home for Acutely Ill Adults: a Pilot Randomized Controlled Trial - Journal of General Internal Medicine, https://doi.org/10.1007/s11606-018-4307-z

Howard, James, Kent, Tyler, Stuck, Amy, Crowley, Christopher, Zeng, Feng (2019, March 04) Improved Cost and Utilization Among Medicare Beneficiaries Dispositioned From the ED to Receive Home Health Care Compared With Inpatient Hospitalization – The American Journal of Accountable Care, https://www.ajmc.com/journals/ajac/2019/2019-vol7-n1/improved-cost-and-utilization-among-medicare-beneficiaries-dispositioned-from-the-ed-to-receive-home-health-care-compared-with-inpatient-hospitalization

Explore HealthStream’s Workplace Development Solutions for Home Health Care.