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An International Trend Toward Self-Directed Care



April 9th, 2010
by John Goodman

Critics of consumer-directed health care often argue that patients are not knowledgeable enough and the market is not transparent enough for consumerism to work in health care. But a study by The Commonwealth Fund says there is an international trend toward self-directed care (SDC) and it is focused on a most unlikely group of patients: the frail, the old, the disabled and even the mentally ill.

  • In the United States, Medicaid “Cash and Counseling” programs — underway for over a decade — allow home-bound, disabled patients to manage their own budgets and choose services that meet their needs.
  • In Germany and Austria, a cash payment is made to people eligible for long-term care — with few strings attached and little oversight on how the money is used.
  • In England and the Netherlands, the disabled and the elderly manage budgets in a manner similar to Cash and Counseling in the United States.
  • Also in this country, Florida and Texas have SDC programs for patients with serious mental illness and the Veterans Administration has an SDC program operating in 20 states for long-term care and mental illness.

Further, it appears that we have barely scratched the surface in taking advantage of patient power opportunities.

Chronic Care. As I wrote at my blog and at the Health Affairs blog, the greatest potential in this area is in the treatment of chronic illness. Studies show that chronic patients can often manage their own care with results as good or better than under traditional care; and if patients are going to manage their own care, it makes sense to allow them to manage the money that pays for that care.

The British National Health Service (NHS) is already contributing to SDC budgets for muscu­lar dystrophy, severe epilepsy, and chronic obstructive pulmonary disease. The NHS believes it is saving money in reduced hospital and nursing home costs. The NHS is also about to launch pilot programs that will include mental health, long-term chronic conditions, maternity care, substance abuse, children with complex health conditions, and end-of-life care.

Other countries are moving in a similar direction. The fastest-growing use of personal budgets in the Netherlands is for families with children who have attention-deficit hyperactivity disor­der, autism, and other types of serious emotional distur­bances.

The advantage of empowering patients and families in this way are straightforward: lower costs, higher quality care and higher patient satisfaction.

Lower Costs. In Germany, long-term care patients are given 50% less than what would have been spent if they agree to manage their own budgets. In the Netherlands, spending is 30% less. In England, long-term care services purchased by individuals cost from 20% to 40% less than equivalent services purchased by local governments. In the Arkansas Cash and Counseling program, participants were given more than what Medicaid would have spent, but an 18% reduction in nursing home use reduced Medicaid’s overall costs.

Higher Quality. In Arkansas, Cash and Counseling patients got 100% of their authorized hours of personal care, compared to only 70% for those in traditional Medicaid. In New Jersey, “mentally ill adults with physical dis­abilities…were less likely to fall, have respiratory infections, develop bed sores, or spend a night in hospital or a nursing home if they were directing their own personal care services.”

Overall, SDC participants get more preventive care; and as a result, “make significantly less use of crisis stabilization and crisis support.” One reason is that SDC gives participants access to a broader range of services. “In Texas,… [where] Medicaid will not cover routine counseling… SDC is providing individuals access to counseling using funds from their individual budgets.”

Higher Satisfaction. In the Netherlands, close to 80 percent of disabled and elderly participants who were eligible for long-term care services and opted for a personal budget had a positive assessment of the services they received, compared with less than 40% in traditional care. In England, 79% of those who employ a personal assistant were very satisfied with the care and support they received, compared to only 26% in traditional care. In the United States, satisfaction rates in the Cash and Counseling programs have hovered in the high 90 percentiles.

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8 Responses to “An International Trend Toward Self-Directed Care”

  1. John Goodman Says:

    Response to Weiwen Ng: I assume that pancreatic cancer is a death sentence, so the only question is whether to spend a lot of money to prolong life for another few months. The answer to your question is: Yes, most definitely. This is another ideal case for self directed care. Give me the $100,000 and let me decide how to experience the remaining few days of life.

    Among some alternatives to traditional care that I might consider are hospice (palliative) care and Cancer Treatment Centers of America care, described at my blog here: http://www.john-goodman-blog.com/quality-competition/.

  2. Weiwen Ng Says:

    It’s important to remember that most long-term care services involve personal assistance for activities of daily living. These are simple services, and consumers can easily know their needs and direct their own care. As you move toward the medical end of the spectrum, you need more guidance from clinicians, and the pure self-directed model may be less appropriate. Besides that, cash benefits for LTC can help empower family members to care for their disabled relatives, often at a lower cost than agency providers. Cash benefits for acute care services, especially complex services like oncology or rare diseases, won’t do the same thing. Would you want your insurer to give you a $100,000 voucher and tell you to go shopping when you had pancreatic cancer?

  3. mmassey1 Says:

    Transparency in health care would help to make patients more accountable for their health care needs and how those needs are met. I know personally that I never actually thought about how much health care cost until I began taking a master’s program class on health care policy. Due to the fact that my insurance has always required a co-pay and I never paid attention to the bill I received in the mail I became very ignorant to the cost. After studying about price transparency in health care I now am much more attuned to the real cost of health care.

    We as Americans are so very price insensitive due to third-party payers and do not recognize the impact that unnecessary spending costs everyone. I am now much more inclined to ask my doctor: Is this procedure necessary? The thought of using our own spending accounts to pay for health care is quite a tempting thought. I believe that the time has come for Americans to take responsibility for their health care and to be held accountable for our choices.

  4. John Goodman Says:

    Response to Brad: We could do something much more efficient than change the entire primary care system. Just let patients have the ability to step outside the very rigid third-party reimbursement system, so that providers can supply them with e-mail and telephone consultations and patient education services, etc. — services that are currently not covered at all or covered inadequately.

    Response to Michelle: I would probably put limits on how some funds may be spent. Obviously, we don’t want to use public funds to pay for every hair-brained scheme that comes along. We want the funds to pay in a more economical way for services that the government would have paid for anyway.

  5. Michelle Suarez Says:

    The idea of giving consumers control of health care budget could have powerful consequences in terms of accountability of health care professionals and quality of care. My concern is about the general public’s evidence based practice literacy. In working for families who have children with autism, parents are always desperately seeking a “cure”. They frequently spend great portions of their personal wealth on this quest. Unfortunately, there are many treatment techniques that make grandiose claims that can not be backed with research outcomes. This leaves many families disappointed and stretched financially. There would need to be a clearinghouse for treatment to ensure it meets a basic efficacy standard.

  6. Brian R Williams Says:

    As self-directed care gains a foothold in an otherwise planned health care economy, won’t information and knowledge begin to flow to consumers to help them make decisions? At present, there doesn’t seem to be an incentive for doctors to post prices or other information to help consumers make informed decisions.

    For people who don’t care to become informed, why can’t independent businesses help patients navigate the medical system, much like a travel agency helps travelers who don’t want to bother making their own travel plans?

  7. Devon Herrick Says:

    With the advent of the Internet, patients now have access to abundant information about conditions and diseases. Asthma and diabetes are both good examples of chronic illnesses where patient should became more involved in their own care. An article in the British Medical Journal claims that, at least initially, nearly 80% of care is self-care. It makes sense to get patients more involved.

  8. Brad Kirkman-Liff Says:

    It is important to remember that in the Netherlands and the British National Heath Service all patients have a designated primary care provider or primary care clinic. There has been a substantial effort to extend social workers into primary care in both nations, and to organize solo practice primary care providers into larger networks. There has also been an effort to have hospital-based specialists relocate outpatient services by having the specialists conduct clinics in the offices of the primary care physicians. Patients no longer have to travel to the hospital out-patient department to see some of their specialists.

    The success of the self-directed care budgets in the Netherlands and the UK has to be understood in the context of systems that are more primary care focused than the current American system and are making continued efforts to expand the services available in close proximity to the patient.

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