Home Health & Hospice Week

The rise of home care has saved the nation tens of billions of dollars a year, and it will continue to do so if home care continues to grow.

So says a new study by Frank Lichtenberg, a professor of business at the Columbia University Graduate School of Business and a research associate with the National Bureau of Economic Research. As much as $25 billion in hospital payroll costs was saved in 2008, thanks to patients going to home care instead, says Lichtenberg's study, which was commissioned by Home Instead Inc.

"The reduction in hospital payroll associated with a $1,000 increase in home health payroll is not less than $1,542, and may be as high as $2,315," Lichtenberg says in a release about the study. Hospital wages run about 50 percent higher than home care ones, he says.

Between 1998 and 2008, the average length of stay in hospitals decreased by 4.1 percent, from 4.78 days to 4.59 days, the study notes. "The estimates imply that this decrease was entirely due to the increase in the fraction of patients discharged to home health care, from 6.4 percent in 1998 to 9.9 percent in 2008."