Chart 3. Employment in home health care services, seasonally adjusted,
1988-94, In thousands
550 | + 550
500 + | 500
August 1988:
Ruling on part-time
450 [- Intermittent care -] 450
End of 1989: 4
400 | Benefit clarifications “0
become valid
350 + + 350
300 + + 300
al aw |”
200 L—| | 200
ol 1 i 1 1 i 1 1 1 1 i 1 [Paws ewwn Cweewwe f 1 1 irwen © I 5
1988, 1989 1990 1901 1982 1983 1994

1993, about 3.5 million received these benefits,
an increase of more than 218 percent.!? If those
who are not certified under the medicare pro-
gram are included, the number of home health
agencies increased correspondingly with grow-
ing enrollment and demand.

In addition, the number of medicare certified
home health agencies has increased by nearly 22
percent over the past 5 years; most of the increase
occurred in 1993.'4 To become certified, home
health care agencies are required to meet stan-
dards and criteria of care set by medicare under
the auspices of the Health Care Financing Ad-
ministration. As of 1993, nearly 7,000 medicare
certified home health agencies and a little more
than 6,000 noncertified agencies provided ser-
vice.'5 Agencies have remained outside of medi-
care for various reasons, they may not provide
skilled nursing care or choose to limit business
to private-pay patients.

Cost effectiveness

The increase in the number of individuals cov-
ered by medicare for home health care has led to

a marked expansion of the industry. Home care
has become a major source of relatively afford-
able care as the health care system—the govern-
ment, hospitals, and other providers—tries to
control costs with a more efficient use of health
care and long-term care,

Cost savings result from lower overhead ex-
penses and flexible staffing practices. A home
health care company does not need an extensive
facility with 24-hour pharmacies, operating
rooms, and medical equipment for various emer-
gencies. Although a portion of home care is pro-
vided by family members, neighbors, or close
friends, a changing American family structure
and increasingly complex care being delivered
at home has led to an increased delivery of home
care by professionals. Cost savings result from
replacing high-cost institutional care with pro-
fessional care and personal care often provided
by family or friends. For example, in an institu-
tional setting, a registered nurse or doctor may
visit all patients three times a day, while home
care rounds are based on the needs of the patient
and his or her family. The determining factors in
the frequency of visits are not only the patient’s

Monthly Labor Review March 1995 7



Home Health Care

Physicians also were asked to comment on
whether they plan to use home health services in
the future. Nearly 70 percent were likely to use
such services, and 25 percent would not. The
specialties of the second group are not easily
adapted to home care. The findings showed that
a physician’s knowledge and awareness of the
industry may be related to his or her specialty.
Internists were the most likely to cite more ser-
vices offered by home care agencies than were
physicians in other specialties. Among physicians
who had used home health services, internists
and surgeons predominated. The survey and
analysis concluded that “an overwhelming” 90
percent of the physician sample were favorable
toward home health care services and programs,
while 3 percent were unfavorable.*4

Physician involvement has contributed to the
growth of employment in the industry. As physi-
cians become more involved with home care,
they will push for more use of technological
improvements and other forms of innovation and
education. “Undergraduate and graduate medi-
cal education programs are developing home care
curricula, and academic medicine is beginning
to develop a research agenda, particularly in the
area of clinical outcome measurements.”35
Nearly 82 percent of all accredited medical
schools offered home health care in their 1992
curricula.

Growth in the home health care industry is
contingent not only on the knowledge of the pub-
lic or patients, but also on the knowledge and
approval among physicians. Without being rec-
ognized as appropriate, safe, and cost-effective,
the industry would not exist. The strong growth
of employment in the home health care field of
nearly 17 percent annually can be attributed in
part to an increase in awareness among the pub-
lic and physicians.

What’s ahead?

The expansion of medicare benefits brought
about by policy changes in the late 1980’s had a
large and immediate impact on employment in
the home health care industry. This trend will
most likely continue in the absence of other
policy changes. Improved cost-effectiveness,
advancing technology, and enhanced public
awareness also is expected to continue to strengthen

Footnotes

the industry. Additional growth in home health care
could accompany any changes included in health
care reform, which may still be accomplished, al-
though scaled back from the overhaul proposed in
1994. In addition, long-term future impact on
home health care employment will stem from
changing demographic patterns.

The need for personal assistance and health
services, specifically home health care, increases
with age. Among persons under age 65, only 2
percent needed assistance with everyday activi-
ties. At older ages, the proportion requiring as-
sistance ranged from 9 percent of those aged 65
to 69 up to 45 percent for those aged 85 or older.”

Because health care benefits are provided to
nearly all of the elderly population, the size of the
medicare system is greatly affected by changes
in demographics. “The increasing size of the old
population, and their health situation, which
clearly declines with increasing age, suggests that
a larger number will seek long-term care as part
of the continuum from independent living, to
assisted living at home, to institutional care.”>®

Individuals aged 65 and older represent more
than 31 million Americans, or | of 8. This ratio
is 10 times larger than their representation in
1900 and is expected to more than double by
2030.39 Over the next 10 years, the Bureau of
the Census estimates that the proportion of eld-
erly will remain virtually constant. Between 2010
and 2030, the baby boomers—those born be-
tween 1946 and 1964—will enter the ranks of
the elderly. This development will expand the
elderly population from 39.7 million in 2010 to
69.8 million in 2030, when more than 20 per-
cent of the population will be 65 and older.*° The
population that is 85 and over is “expected to be
the fastest-growing age group,” doubling in size
from 1991 to 2020, and increasing five-fold by
the year 2050.4!

The latest BLS projections anticipate a substan-
tial increase in home health employment into the
21st century. Employment in the industry has
been projected to increase by more than 500,000
jobs, or 128 percent, between 1992 and 2005.4?
This compares with an increase of only 30 per-
cent in the hospital industry and 43 percent for
total health services. The home health care in-
dustry has been and will continue to be a major
contributor to health services employment
growth. Q

| Employment data are from the Current Employment
Statistics survey and appear in Employment, Hours, and
Earnings, United States, 1909-1994, Bulletin 2445, (Bu-
reau of Labor Statistics, 1994). The home health care ser-
vices (sic 808) industry was initiated as a separate series in
January 1988.

10 Monthly Labor Review March 1995

2 For more information on the health services industry,
see “Health services: the real jobs machine” by David R. H.
Hiles, Monthly Labor Review, November 1992, pp. 3~

3 Comparison is based on all Private sector industries,
defined at the three-digit level of detail in the Standard In-
dustrial Classification system.



Home Health Care

tive health care choices, technological advances,
and increased public awareness have all contrib-
uted to the move toward home health care.

The impact of medicare

Recent expansion of portions of the medicare
program that provide home health care benefits
explains part of the employment growth in the
home health care industry. Changes in the medi-
care program resulted from an August 1988 rul-
ing in Duggan v. Bowen that broadened the scope
of the program.!! The nuling was in response to
a lawsuit filed against the Health Care Financ-
ing Administration by 17 medicare patients de-
nied home-care benefits, several organizations
that provide home health care, the National As-
sociation for Home Care, and 14 members of
Congress.

The decision stated that the Health Care Fi-
nancing Administration had imposed significant
testrictions in the 1980’s on coverage of home

Table 2. Home health care employment by selected occupations,
1990 and 1993
[In percent}
Occupation 1990 1993
Social workers, medical and psychiatric 0.81 1.13
Health practitioners, technicians and tec! 29.50 32.23
Physicians and surgeons 07 =
‘Other health diagnosing = 25
Respiratory therapists 13 16
‘Occupational therapists . 55 65
Physical therapists .. 1.54 1.69
Speech pathologists and audiologists . 46 60
Recreational therapists . 03 =
All other therapists .. 04 06
Registered nurses 17.74 20.20
Licensed practical nurses . 7.67 7.16
14 02
08 2
08 22
07 15
- 02
Medical and erica laboratory technicians . . 05 03
Medical records technicians 27 a4
Psychiatric technicians . 02 _
Radiological technicians = 05
Other health professionals,
paraprofessionals/technicians |... eee 56 51
Health service and related 45.01 96.22
Medical assistants... 08
Nursing aides, orderiies, 5.50 a9
Home health aides 37.32 31.02
Psychiatric aides .. 04 03
Physical and corrective therapy assistants an 20 27
‘Occupational therapy assistants and aides . . 03 04
Pharmacy assistants. : 02 06
Other health services 1.84 53
Personal and home care aldes.............eeceeeceeee 8.39 12.60
Nore: Dashes indicate data did not meet reliability or confidentiality standards.
Source: Occupational Employment Statistics Survey, Bureau of Labor Statistics.

6 Monthly Labor Review March 1995

health care, drastically changing previous re-
quirements. The new policy denied reimburse-
ment for home care that was provided for more
than 4 days a week, no matter how little time
was devoted to the daily care. It had improperly
interpreted the Medicare Act’s term, “part time
or intermittent” as part time and intermittent.
Patients needing an hour of care daily for 5 days
were denied coverage, while those needing 27
hours of care over a 4-day period could receive
benefits. In addition, a patient who needed care
on 5 different days was not only denied the fifth
day of care but also lost medicare coverage for the
other 4 days.

The decision noted that the drafters of the
Medicare Act had intended that the government
pay for “part time or intermittent” care at home.
by a nurse or home health aide as long as such
care was not full-time that might be better pro-
vided in an institution. The home-care program
was designed to provide services at home for
people who do not need to be hospitalized or
confined to a nursing home. The intent of the
program was to shift care to the less expensive
home setting, where possible. However, because
of the interpretation at the time, many patients
were forced to receive care in an institutional
setting, receive care at home paid entirely by the
patient, or forego treatment.

The decision also certified the case as a class-
action suit, requiring the government to reopen
all medicare claims from patients whose benefits
were denied because of the Health Care Financ-
ing Administration’s policy shift. The class ac-
tion was estimated to include hundreds of thou-
sands of individuals. As a result of the decision,
medicare now allows payment of part-time
(fewer than 8 hours a day) or daily (7 day-a-
week) home health services for as long as the
patient requires such care.!? Therefore, the ben-
efit greatly expands the demand for home health
care services.

Policy clarifications resulting from the court
case expanded the scope of reimbursement for
home care under medicare. A connection be-
tween this policy clarification, which became
fully effective near the end of 1989, and the sub-
sequently rapid growth of employment in the
industry seems clear. (See chart 3), After grow-
ing 13 percent the previous year, employment in
home health services grew 21 percent in 1990,
the first full year in which the new guidelines
were in effect. Following 1990, the gains in the
industry averaged 16 percent annually.

The change in medicare benefits allowed more
individuals to be covered by home health care
services. Before the lawsuit, approximately 1.5
million enrollees received home health services
from medicare-certified agencies. By the end of



Home Health Care

condition, but also the ability of the patient and
family to learn how to provide care themselves,
with the goal of self-sufficiency.

In addition to the frequency of visits, home-
care services also are established individually
according to the type of care needed. One need.
not pay for a doctor’s visit or 24-hour care by a
registered nurse when a home health aide is quali-
fied to perform the service.

Salaries of the professions may vary widely.
For example, the Bureau of Labor Statistics has
estimated median full-time weekly earnings to
be $1,019 for physicians, $687 for registered
nurses, and $281 for nursing aides, orderlies, and
attendants (a classification in which home health
aides are included).'® Also, because of the high
proportion of aides, the average hourly earnings
for workers in the home health care industry is
more than $3 less than that of the hospital indus-
try, $10.67 compared with $14, as reported by
the Current Employment Statistics survey.

Several sources have cited cost savings pa-
tients receive with home care over hospital or
other institutional care. Most acute care received
from a hospital cannot be replaced with care in
the home, although such care increasingly is be-
ing reevaluated as suitable for home care. Some
examples of acute care delivered in the home are
discussed below.

Pediatric alps. In July 1993, The Washington
Post reported that a 2-1/2 year-old boy infected
with the HIV virus was receiving home health care
in place of hospital care. The child required a
24-hour nurse to administer oxygen, intravenous
feedings, and 37 types of medication. By receiv-
ing home care, the cost was $531 a day, reduced
from $2,263 a day for hospital care, a 76-per-
cent savings.'7

Respiratory care. An evaluation of home care
costs versus those for alternative institutional care
for children who require artificial breathing as-
sistance showed substantial cost savings. The
study specifically compared the average costs of
institutional care versus home care for ventila-
tor-dependent children and oxygen-dependent
children with tracheotomies.!8 The findings for
patients who depend on a ventilator showed an
average annual savings per patient of $79,074—
$109,836 for home care versus $188,909 for in-
stitutional care. The findings for children who
depend on ventilators to supply oxygen showed
an average annual savings per patient of $83,187—
$63,650 for home care versus $146,836 for insti-
tutional care.'? Home health care was found to
save up to $300,000 per year with mean costs of
only 50 percent of institutional costs for respira-
tory technology-dependent children.2°

8 Monthly Labor Review March 1995

Hip fracture. Lewin/ICF, a consulting firm, re-
leased a health care study showing that the use
of home medical equipment with inpatient treat-
ment is more cost-effective than hospital treat-
ment alone.?! The analysis focused on patients
who were hospitalized with a hip fracture,
chronic obstructive pulmonary disease,22 and
amyotrophic lateral sclerosis,”> or Lou Gehrig's
disease, with pneumonia. A cost-benefit analy-
sis was used to identify the costs and benefits of
home health care compared to care in the hospital.

The study found that a combination of inpa-
tient and home care is much more cost-effective
than inpatient care alone. The research also de-
termined that a combination of inpatient/home
therapy with home medical equipment is not only
the preferred treatment of patients, but also may
save patients between $300 and $2,300 per inci-
dent. The study demonstrated that cutting inpa-
tient days and substituting more home care days
reduced costs by $2,300 in hip fracture cases,
$520 in cases of obstructive pulmonary disease,
and $300 in cases of amyotrophic lateral sclero-
sis.24 The cost savings were partly the result of
pressure on providers to reduce the length of in-
patient hospital stay, and the development of
home medical equipment and other support ser-
vices that allow more patients to receive care at
home. The study emphasized that full use of
home health care and home medical equipment
services can achieve significant cost savings and
improve patient satisfaction.?>

The cost effectiveness of the home health care
industry has dramatically changed patient care.
As patients are shifted from hospitals to less ex-
pensive outpatient settings such as the home,
hospital employment growth, occupancy rates
and patients’ length of stay have slowed. In re-
sponse, hospitals have begun to compensate by
merging or expanding care to include home care
and other outpatient services on some level.

Technological advances

In most situations, sending the patient home for
care instead of using institutional care depends
not only on reimbursement policy, but also on
whether the patient can receive treatment at home
equivalent to institutional care. Recent techno-
logical advances have made complex medical
equipment more compatible with the home en-
vironment. Lab tests, often required when acom-
plicated case is under treatment, are now avail-
able curbside from vans that perform lab work
on site. This development adds to the availabil-
ity of care at home.

Equipment that has been adapted especially
for home care includes: blood glucose monitor-
ing for the diabetic; computerized equipment for



4 Office of Management and Budget, Standard Industrial
Classification Manual 1987, p. 389.

5 Home health aides have been defined by the Occupa-
tional Employment Statistics survey as those who care for
elderly, convalescent, or handicapped persons in the home
of the patient. They perform duties for patients such as
changing bed linens, preparing meals, assisting in and out
of bed, bathing, dressing, and grooming, and administering
oral medications under a doctor's orders or at the direction
of a nurse.

6 Occupational data are from the Occupational Employ-
ment Statistics survey, Bureau of Labor Statistics.

7 Personal and home care aides have been defined by the
Occupational Employment Statistics survey as those who
perform a variety of tasks at places of residence. Their du-
ties include keeping house and advising families with prob-
lems such as nutrition, cleanliness, and household utilities.

® A Study of Post-Acute Care, A Final Report, ucra No.
17-C98891 (University of Minnesota, School of Public
Health, Institute for Health Services Research and Policy,
October 1993), p.

° Paul Wallich, “Are Hospitals Heading for Intensive
Care?” Scientific American, April 1994, p. 118.

1 Suzanne W. Letsch, Helen C. Lazenby, Katharine R. Levit
and Cathy A. Cowan, “National Health Expenditure, 1991,”
Health Care Financing Review, December 22, 1992, p. 1.

"" Duggan v. Bowen, U.S. District Court, Washington,
870383, Aug. 1, 1988.

"2 Unpublished document written by Jill L. White, direc-
tor of policy analysis, National Association for Home Care,
‘Washington, D.C., Mar. 11, 1994,

'3 “Basic Statistics About Home Care 1993,” National
Association for Home Care, Figure 7, p. 4.

\4 “Basic Statistics,”
'S pbid., p. 2.

6 Occupational weekly earnings data are from the Cur-
rent Population Survey and were cited in Employment and
Earnings, (Bureau of Labor Statistics, January 1994), Table
56, pp. 243 and 245. (These median full-time weekly eam-
ings are limited to wage and salary workers only. For ex-
ample, self-employed physicians are not included.)

"7 Amy Goldstein, “A Tragedy Tangled in Red Tape; Fam-
ily Wins 5-Month Battle to Let Gravely Il Child Die at
Home,” The Washington Post, July 17, 1993, p. Al.

18 4 tracheotomy is a surgical opening in the trachea or
windpipe through the neck with the insertion of an
indwelling tube to facilitate the passage of air for breathing.

19 “Basic Statistics,” p. 8.

29 Alan I, Fields, Alan Rosenblatt, Murray M. Pollack and
Joanne Kaufman, “Home Care Cost-Effectiveness for Res-
piratory Technology-Dependent Children,” American Jour-
nal of Diseases of Children, July 1991, pp. 729-33.

21 “New Health Care Study Shows Cost-Effectiveness of
Home Health Care,” PR Newswire, June 26, 1991.

?2 Chronic obstructive pulmonary disease is a functional
category designating a chronic condition of persistent ob-
struction of bronchial air flow. Diseases usually associated
with this condition are asthma, bronchitis, and pulmonary
‘emphysema. The patient has difficulty expelling air out of
the lungs. This condition is a chronic disease for which there
is no cure, Physical activity is usually severely limited. The
lungs and linings of the lungs are severely damaged, and
usually infections are easily acquired.

23 Amyotrophic lateral sclerosis is a motor disorder of
the nervous system. Early signs and symptoms include weak-

Figure 2, p. 2.

ness of the hands and arms, difficulty in talking and swal-
Towing, and weakness of the legs. There is no known spe-
cific cure or treatment.

% Robert Rubin, “Economic Analysis of Home Medical
Equipment,” Lewin/ICF, Washington, D.C., May 29, 1991.

25 “New Health Care Study Shows Cost-Effectiveness of
Home Health Care,” PR Newswire, June 26, 1991.

26 “Home Care in the 1990's,” Journal of the American
Medical Association, Mar. 2, 1990, pp. 1241-44.

27 Apnea monitors are devices equipped with audible and
visual alarms. They are specifically used to monitor an
infant’s breathing and heart rate. The monitor sounds a wam-
ing in the event of cessation of breathing or if a baby’s heart
rate slows or speeds up, The unit also alerts parents in case
of an operating or power failure. These are now used within
the home setting for infants at risk of or with near-misses of
Sudden Infant Death Syndrome. They also may be used for
adults who suffer from sleep apnea. Apnea is defined as a
temporary cessation of breathing.

28 Information on home health medical equipment has
been supplied by Anne E. Evans, Sales Representative,
Homedco of Maryland, Baltimore, mp, January 1994,

29 Total parenteral therapy is for patients who cannot take
any food or liquids by mouth. Fluid that contains all of the
electrolytes, minerals, and other nutrients needed to sustain
life is delivered to the body . The fluids are usually caustic
to veins and must be monitored to ensure that the electro-
lyte balance is maintained correctly.

30 John Wolcott, “Prescriptions for Cost Efficiency?”
Puget Sound Business Journal, July 15, 1991.

31M. Cetron, “The Public Opinion of Home Care: A Sur-
vey Report Executive Summary,” Caring, 1985, Vol. 10, p.
13.

3? Civilian labor force participation rates for women are
from the Current Population Survey and appear monthly in
Employment and Earnings, Bureau of Labor Statistics.

33 Louis Harris, “The Public Mandate for Health Care
Reform in America,” Washington, D.C., L.H. Research, Feb-
ruary 1992, p. 76.

% Javalgi W. Rajshekhar, Joseph Benoy, “Physicians’
Attitudes and Behaviors Toward Home Health Care Ser-
vices,” Journal of Health Care Marketing, December 1991;
p. 14,

> Council Report.s“Home Care in the 1990s,” Journal of
American Medical Association, Mar. 2, 1990, pp. 1241-44,

% Joanne G. Schwartzberg, “Home Care Education for
Physicians,” Caring, May 1992, pp. 18-24,

37 Cynthia Harpine, John McNeil, and Enrique Lamas,
U.S. Bureau of the Census, “The Need For Personal Assis-
tance With Everyday Activities: Recipients and Caregivers,”
Current Population Reports, Series P-70, No. 19. U.S. Gov-
ernment Printing Office, Washington D.C. June 1990, Table
Ay p. 3.

38 “Sixty-Five Plus in America,” Current Population Re-
ports, Special Studies, P23-178RV; ch. 3, p. 17.

39 Ibid., ch. 2, p. 1.

“ Jennifer Cheeseman Day, “Population Projections of
the United States, by Age, Sex, Race, and Hispanic Origin:
1992-2050,” Current Population Reports, Bureau of the
Census, October 1992, p. vii.

“\ Ibid., p. viii.

4? Data on employment projections by industry and occu-
pation are unpublished, but available at the Office of Employ-
ment Projections, Bureau of Labor Statistics, (202) 606-5886.

Monthly Labor Review March 1995 11



Laura Freeman

Laura Freeman is an
economist in the Office of
Employment and
Unemployment Statistics,
Bureau of Labor Statistics.

Home-sweet-home

health care

Lower costs of home care versus hospital care,

advancing technology, and expansion of medicare benefits
are some of the reasons home health services

is the fastest growing segment of the health services industry

of health care. Although home health care

is not a replacement for all hospital care,
it has become an important setting for deliver-
ing preventive, diagnostic, therapeutic, rehabili-
tative, and long-term maintenance services.

The health care that patients receive in the pri-
vacy and comfort of their own homes breaks the
past pattern of confining sick, handicapped, dis-
eased, and mentally ill individuals to hospitals
or institutions. Expansion of medicare benefits,
lower costs for care at home relative to hospital
care, and modern technology are among the rea-
sons home health care has become the fastest
growing segment of health care services, and the
second fastest growing industry in the economy
as of October 1994.

For example, cancer patients can now live at
home and even return to work with the aid of
computerized pumps that deliver medications at
precise dose frequencies and intensities. Portable
ventilators allow babies with respiration prob-
lems to scoot around the floors of their own
homes. Heart patients are monitored and treated
at home by hospital-based teams using fiber-op-
tic telecommunications, Such modem technolo-
gies, the expansion of medicare benefits, and
relatively low costs for at-home care have com-
bined to make home health care the fastest grow-
ing segment of the health care industry and one
of the fastest growing industries in the economy.

One of five jobs created in the nonfarm
economy since January 1988 has been in the

Te home is now the choice for certain types

health services industry.' Within health services,
the relatively small home health care industry
was a major provider of jobs, growing 5 times
faster than the average of all health industries.
By October 1994, home health care accounted
for 6 percent of total health services. But since
1988, it has gained a little more than half as many
jobs as the hospital industry, which is seven times
the size of home health care. This pattern of em-
ployment growth reflects the shift of patient care
from hospitals to the home.

Because health services are always in demand,
the health care industry has been known for its
strength in bad times as well as good. For ex-
ample, during the most recent employment re-
cession, June 1990 through February 1992, em-
ployment in the health services industry grew 7.5
percent while employment in the total nonfarm
economy fell 1.7 percent.?

Although this strong growth was widespread,
certain segments of health services stand out.
Since 1988, home health care has had the largest
relative employment increase, 168 percent (or a
tise of 345,000 additional jobs). In contrast, hos-
pitals have had the smallest relative increase, 18
percent, but the largest number of additional jobs
(nearly 580,000). (See table 1.)

Home health care currently is the fastest grow-
ing portion of health care. (See chart 1.) Home
care employment has an annual growth rate of
16.4 percent during the 1988-93 period. This
compares with 4.3 percent for total health ser-
vices and 2.8 percent for hospitals. (See chart 2.)

Monthly Labor Review March 1995 3



the disabled; mini-intensive care units with ven-
tilators and central venous lines (lines, needles,
or tubes that are inserted into a large vein to
maintain fluids such as an antibiotic or to replace
blood or fluids in the body system); and mobile
laboratories that can travel from home to home.

An ever-growing range of devices helps pa-
tients overcome impairments in hearing, speech,
and vision. In addition, devices such as special-
ized telephones, computers, talking books, and
captioned television improve communication,
socialization, and recreation for the homebound.”6

Home care also has helped reduce infant mor-
tality with infant home monitors, known as ap-
nea monitors, 7 that were designed for children
who are at risk from sudden infant death syn-
drome. Current technology also permits AIDS
patients to receive complex medical treatment at
home.”

Nearly every method of hospital or other in-
Stitutional treatment that can be made portable
can be provided at home. One of the most rap-
idly growing areas of medical technology is the
engineering and production of medical equip-
ment tailored for use in the home. Employment
in the medical instruments and supplies industry
has increased by 17 percent since January 1988.

Home infusion therapy, the delivery of fluid
to the body by an Iv line, is a widely noted ad-
vance in technology. Since the early 1980’s,
home infusion therapy has made possible early
hospital release of thousands of patients, allow-
ing them to receive follow-up treatment at home.
Such fluids may be, but are not limited to, anti-
biotics, pain medication, or replacement of body
fluid.

Technological advances in the devices used to
control the infusion have helped expand their use.
The process was once limited to a system that
operated on gravity. Infusion control now in-
volves programmable electronic pumps that al-
low delivery of medication at wide ranges of dose
frequencies and intensities. The therapy is ad-
ministered by IV home care nurses in consulta-
tion with the pharmacist and the physician. The
patient receives extensive training and must be
suitable for this type of therapy.

The introduction of home infusion therapy has
allowed in-home chemotherapy for cancer pa-
tients, specialized in-home therapy for post-trans-
plant patients who have undergone bone, kidney,
or heart transplants, antibiotic therapy, parenteral
analgesics for pain management, intravenous
administration of certain heart medications, in-
home blood transfusions, and total parenteral
therapy.??

Recent innovative, money-saving services—
made possible by a new generation of hardware,
software, and fiber-optic, digital cable net-

works—are attracting attention from hospitals,
physicians, and clinics in urban and rural areas.
State-of-the-art communications technology
works more efficiently than current systems. Fi-
ber-optic telecommunications systems, which
has been talked about for years, is in place and
used more commonly than is realized. These sys-
tems allow transmission of billions of bits of digi-
tized computer data with great accuracy. The
technology enhances home health care by en-
abling hospital staff and physicians to monitor
patients in their homes via telephone lines.*°

Increased public awareness

Public opinion of home health care and avail-
able services was surveyed in 1985 by the Na-
tional Association for Home Care. It found that
only 38 percent of the Population could name a
home health care service.*! Since then, the pub-
lic has become more aware of the home health
care industry. Changes in the structure of fami-
lies have contributed to this awareness. With
more women in the work force—59 percent, up
from 56 percent in 1988—fewer family mem-
bers are at home to help sick or elderly patients
who may need sophisticated care.32 A more re-
cent poll conducted by Louis Harris in 1992
found that Americans supported home care by a
margin of 9 to 1 over various forms of institu-
tional care.39

Use of home health care services is influenced
by many factors besides knowing it is available.
Key factors include the patient’s health care
needs, the type of reimbursement plan, and the
physician’s willingness to prescribe home care.
Because home health care cannot be obtained
without a physician’s prescription, the physician,
who makes specific recommendations and refer-
rals, plays a major role in deciding whether to
use home care services.

A 1991 study, “Physicians’ Attitudes and Be-
haviors toward Home Health Care Services,” ad-
dressed the importance of physicians’ insights
into the strengths and weaknesses of the home
health care industry. Physicians were asked to
rate their knowledge about home health care: 71
percent noted “some” knowledge; 21 percent
were “very knowledgeable;” and only 7 percent
admitted no knowledge of the industry. A ma-
jority of physicians seemed to be aware of the
traditional home health services such as nursing
(92 percent were aware of the service), home
health aides (79 percent), physical therapy (74
percent), and medical social work (70 percent).
However, more than half of physicians surveyed
were unsure or unaware of laboratory/x-ray ser-
vices and occupational, chemotherapy, and IV
therapies delivered in the home.

Monthly Labor Review March 1995 9



Home Health Care

In addition, during the first 3 years of the recov-
ery period following the most recent recession,
home health care had the third largest increase
of all industries (following “mortgage bankers
and brokers” and “title insurance”).>

At the same time, employment in the medical
instruments and supplies industry increased 17
percent over the 1988-94 period, compared with
a loss of 6 percent in total manufacturing.

Home health care profile

Services provided. Home health care services,
as defined in the Standard Industrial Classifica-
tion Manual 1987, consists of “establishments
primarily engaged in providing skilled nursing
or medical care in the home, under the supervi-
sion of a physician.” Traditionally, such services
have been provided by family members in the
home. But fewer homes now have someone to
care for the elderly or sick, and the home health
industry has filled the gap.

The services provided may be as fundamental
as help with basic “activities of daily living.”
These activities are physical tasks related to per-
sonal care and include dressing, bathing, getting
out of bed, and feeding oneself. The services also
may be as complicated as caring for patients
needing specialized care for AIDS or cancer che-
motherapy. Home health personnel work days,
evenings, or weekends, depending on the needs
of the patient. The time with the patient may range
from 1 hour a week to around-the-clock care.

Types of jobs. According to the Occupational
Employment Statistics survey, home health
aides, accounting for 31 percent of the indus-
try, are the most common providers of care to
individuals at home. Various professional health
providers make up 32 percent, of which 20 per-

Table 1. Employment change in health services, 1988 and 1994
{In thousands}
Percent of health services Employment change
Industry 5 LE tober
january ol evel
1988 1994 Percent !
Total .... 100.0 100.0 31 2,163
Hospital 46.3 41.6 18 576
Physicians 16.9 17.3 35 406
Nursing and personal
care facilities... 18.6 18.1 27 360
Home health care 3.0 6.0 168 345
Practitioners .. 31 44 88 187
Dental offices 69 66 25 421
33 37 48 109
20 23 45 64

Nore:

Data are seasonally adjusted.
N.e.c. = not elsewhere classified.

4 Monthly Labor Review March 1995

cent are registered nurses and 7 percent are li-
censed practical nurses. The other large group
comprises personal and home care aides, who
account for 13 percent of the industry’s work-
ers. Other specialized personnel, depending upon
the need, may include physical therapists, occu-
pational therapists, social workers, and speech
pathologists.® (See table 2.)

In recent years, the occupational breakdown
of the home health care industry has remained
relatively stable, except for registered nurses and
personal and home care aides, ’ and home health
aides. Since 1990, the proportion of registered
nurses has increased 2.5 percentage points and
personal and home care aides has risen 4.2 per-
centage points; at the same time, the proportion of
home health aides has declined by 6.3 percent.

These changes reflect a shift in the type of
demand by home health care patients. More now
than in the past, patients’ care requires a more
highly trained staff who can perform more com-
plex procedures in a rapidly changing industry.

Changes in the industries. The home health
care industry is expanding and being redefined
by changes in employment trends and the occu-
pational distribution in the hospital industry as
it takes on responsibility for more complicated
health problems. The increasing use of the pro-
spective payment system for acute hospital care
has “changed the nature of care provided to medi-
care beneficiaries during the hospital stay and in
the post-discharge period,” according to a 1993
University of Minnesota report. “The financial
incentives inherent in a fixed payment system
encourage hospitals to discharge patients as soon
as medically possible and the services provided
immediately following discharge have become
an increasingly important component of patient
care.”

The change in the delivery of hospital care has
shifted demand to home health care facilities or
other less costly out-patient settings. According
to another report, “a hospital shifts the cost of
care to a different part of the health care sector”
by releasing a patient to a convalescent facility.
“Tf a patient can be sent home to be cared for by
family members . . . the cost shifts out of the
health care sector to other parts of the economy.”?

In addition, technological advances have al-
lowed procedures that were once performed only
‘on an inpatient basis to be shifted to outpatient
care, with the availability of additional care from
other health care facilities.!° Less intensive nurs-
ing care following hospital discharge increas-
ingly is provided by home health care workers.
The expansion of medicare benefits that can be
applied to home health care costs, the cost effec-
tiveness of the industry compared with alterna-



Chart 1. Employment growth, as a percent of 1988 levels, in selected

Percent health Industries Percent
275 275
250 | vy 250
225 > a] 225
200 | 7] 200
175 F qj 175
150 F = 150

Total health care Industry
125 | 125
Hospitals:
100 F {10
ou 1 1 L 1. i. i i 1 Lt 1 1 1 ieewee 1 1 1 i L 1 j 0
1988 1989 1990 1991 1992 1983 1994

NOTE: January 1988 =100

Chart 2. Average annual growth rates for health services, 1989-93

Percent
oO 2 4 6 8 10 12 14 16
T T T

Total health services

Home health care

Osteopaths and NEC

Percent
N.E.C.: Not elsewhere classified

Monthly Labor Review March 1995 5