At-home Care Is Cost-saving Engine For Pace Organizations

What was once known as health care’s “best kept secret” — the Program for All-Inclusive Care for the Elderly (PACE) model — is gaining more attention for its ability to curb costs for payers. Organizations InnovAge (Nasdaq: INNV), PACE Southeast Michigan and BoldAge PACE have it down to a science.

These organizations have found that one key to saving costs lies in the home. By deploying interdisciplinary care teams directly to participants’ homes and providing access to fall-reducing equipment, PACE programs have demonstrated that at-home care coordination can slash costs by delivering better outcomes.

InnovAge CEO Patrick Blair explained that PACE’s care delivery model helps seniors avoid costlier settings.

“We’re able to have a big impact on avoidable and unnecessary services, because individuals just don’t have someone quarterbacking their care in other programs the way they do PACE,” he told Home Health Care News. “Where we look at savings is, we’re consistently showing fewer hospital admissions, reductions in ER, those are two major cost drivers.”

InnovAge is one of the largest PACE organizations in the country. The company has roughly 2,400 employees and serves seniors in Colorado, New Mexico, California, Pennsylvania, Virginia and Florida.

Overall, PACE generates savings of $33,600 annually. Relative to the current 84,000 participants, this amounts to $2.8 billion, according to data from the Center for Medical Economics and Innovation at the Pacific Research Institute.

Blair noted that InnovAge sees reductions in hospital admissions ranging from 25% to 75%, and approximately 20% reductions in ER admissions, compared to a participant’s utilization prior to becoming a PACE participant.

“We do a very detailed assessment when each individual joins us,” Blair said. “What we try to understand, when we bring someone on board, is how frequently have they been going to the ER, how frequently have they been going to the hospital? We get a sense of how they’ve been utilizing the system.”

While BoldAge PACE is a relatively new program in the space, it has achieved the same level of utilization and expense as other programs across the country, according to CEO Mary Austin.

BoldAge PACE achieved this by leaning to PACE’s preventive care ethos, she told HHCN.

“We believe in the interdisciplinary team, person-centered care, and all the innovation that can happen because of that, as well as a strong focus on preventative care,” Austin said. “We don’t try to really modify that basic principle. Everything that we do is in support of that.”

BoldAge PACE is a privately-owned company that has 14 locations across California, Illinois, Indiana, Kentucky, Ohio, South Carolina, Florida and New Jersey.

At PACE Southeast Michigan, the view is that the organization is a “cost avoidance program.” The program saves state Medicare dollars, as well as costs associated with avoidable ER visits and hospitalizations.

CEO Mary Kummer Naber pointed out that most of PACE Southeast Michigan’s would likely be receiving nursing home care if they weren’t utilizing the organization’s services.

“The state ends up picking up the bulk of the cost after Medicare runs out, and private pay runs out, if there is any, and then the person goes on full Medicaid, if they’re in a nursing home,” Naber told HHCN. “If they come into PACE instead, comparatively, the savings are about a third less to the state.”

PACE Southeast Michigan serves Wayne, Macomb and Oakland counties.

Inside the care delivery model

As far as its care delivery model, PACE Southeast Michigan takes multiple steps to achieve cost savings or cost avoidance.

“We, effectively, manage the medical utilization for the participants that we care for,” Naber said. “That means they get the right care, in the right setting, at the right time, for the right cost.”

Shower chairs are one example of this. Nabler explained that most insurance companies don’t pay for shower chairs, though it often lowers fall risks.

“If it’s going to prevent a fall, our interdisciplinary team will make the decision, ‘Yes, let’s get that person a shower chair,’” she said. “We’re going to order it, pay for it, and bring it to their home. Our rehab team will show them how to use it properly, and they’ll have it in their home until they don’t need it anymore. That’s an example of the flexibility that the PACE model has.”

For context, falls are a major risk factor for seniors. Non-fatal falls among seniors amounted to $80 billion in health care costs in 2020, according to data from the National Council on Aging.

Like most providers in the space, BoldAge PACE is focused on prevention, care management, and primary care, as well as providing a space for socialization. Still, the company always has an eye out for how it can expand to meet the exact needs of seniors

When BoldAge PACE began to notice an increase in behavioral health needs among its participants, it developed a specialized program to address these needs.

“By kind of bringing this national expertise from different arenas as well as the PACE expertise, we’ve developed a behavioral health program that incorporates some innovative things like music therapy in every center, art therapy and an interdisciplinary model to deal with the behavioral health needs,” Austin said.

In general, seniors often face roadblocks when accessing mental health care due to factors like stigma and ageism, according to AARP.

Like BoldAge PACE and PACE Southeast Michigan, InnovAge is also incorporating home-based care.

“Home care is essential to delivering care,” Blair said. “About 20% of our employees are devoted to home care.”

These services include nursing, personal care, medication management, home evaluations and more. Even in states like California, where InnovAge can’t deliver home-based care due to licensure restrictions, the company outsources this care through partnerships.

On its end, PACE Southeast Michigan has developed a home care division and BoldAge PACE sends staff into the home for any care needs that may come up.

Ultimately, Blair believes the one-stop-shop nature of PACE is its best asset as a care delivery model.

“The magic of PACE is really the coordination of care by this interdisciplinary team,” he said. “I think people lose sight of the fact that we’re coordinating and personalizing care, and we’re covering about 30% of the total cost of care, under our roof, delivered by our employees. We have a real ability to ensure that everything that they need they get, and we’re able to coordinate that remaining 70% of their total cost of care through our provider partners.”

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