States have been rebalancing their Medicaid long-term care systems away from institutional care and towards home- and community-based services for years. These efforts have been undertaken to provide a more appropriate health care setting for frail individuals and reduce Medicaid expenditures. A new study published in the June issue of Health Affairs reports on a statistical model developed to show just how much rebalancing has occurred. The model used 15 years of state data on Medicaid long-term care spending.
The model predicted that rebalancing was clearly saving states money but the rate at which the rebalancing was occurring determined the level of savings. A gradual rebalancing approach was the best way to achieve the most savings, the authors found, while a more sudden and larger shift away from institutional spending could actually end up costing states more. The model also showed that if states wished to speed up their rebalancing efforts, the least costly way to do so would be through additional reliance on Medicaid home- and community-based service waivers.
