Abstract

Health and long-term care in the United States are fragmented for older people, reflecting that Medicare is the primary payer for acute care for older people and Medicaid is the primary payer for long-term care. As a result of this fragmentation, the medical care system neglects the long-term care needs of older people with disabilities and the longterm care system neglects their medical care needs.

Using 2005 Medicare and Medicaid claims data, this study examines potentially avoidable hospitalizations among people who are dually eligible for Medicare and Medicaid and participating in Medicaid home and community-based services (HCBS) waivers. By federal law, waiver participants must need a nursing home level of care.

Using the same criteria for people in the community and residents in nursing homes, people in the community had 408 potentially avoidable hospitalizations per 1,000 person years, higher than for Medicaid nursing home residents but less than for people receiving Medicare-covered skilled nursing facility care. Over 40% of hospitalizations were potentially avoidable. Using a more restricted definition of potentially avoidable hospitalizations that takes into account that some medical conditions, once developed, cannot be safely treated at home, waiver beneficiaries had 250 potentially avoidable hospitalizations per 1,000 person years. Using the conservative definition of potentially avoidable hospitalizations, the hospitalization cost was $463 million in 2005. The cost to Medicare for each potentially avoidable hospitalization was $6,415; the cost to Medicaid was only $325. Multivariate analyses suggests that states with well developed HCBS systems have lower rates of potentially avoidable hospitalizations among Medicaid waiver beneficiaries.

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