Beyond managed long-term care: Paying for home care based on risk of adverse outcomes

Evaluations of home care for chronically ill elderly people have shown disa ppointing results for many years. Improvements in outcomes have been slight and costs high. We offer a system for setting budget targets based upon ef fectiveness of home care in mitigating certain adverse outcomes, the risk o f those outcomes occurring, and the economic value of avoiding those outcom es. We believe that such a budgeting system will encourage improved measure ment of outcomes and more rigorous justification for expenditures. Moreover , such a system is designed to reallocate resources to higher-risk patients and those more likely to benefit, focusing caregiving on specific outcomes and improving those outcomes.