Care services will affect the kinds of devices that

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care services will affect the kinds of devices that will be demanded. Although there are no precise data on histori- cal trends in the total use of home health care serv- ices throughout the country, data are available for use by Medicare and Medicaid beneficiaries. From 1974 to 1982, the number of home health visits to Medicare beneficiaries increased by 247 percent, from 8.1 million visits in 1974 to 28.1 million visits in 1982 (159). In the same period, Medicare reimbursements to home health agen- cies—organizations that provide home health care services—grew from 1.2 to 2.5 percent of total Medicare reimbursements, or $1.2 billion in 1982. Approximately 4 percent of those reimbursements were for equipment, appliances, and nonroutine supplies offered as part of home health care visits (136), and 28 percent can be attributed to non- labor costs (310). Medicaid expenditures for home health services were almost $500 million in 1982 (399). Table 21 estimates national home health care expenditures by source in 1981. Since the data underlying these estimates are imprecise, the table should be considered only as a general descrip- tion of the relative importance of various fund- ing sources. Almost 60 percent of home health care expenditures are paid for directly by patients. Medicare and Medicaid account for another 19 percent of such expenditures, and private inser- table 21.—Estimated Home Health Care Expenditures and Percent Distribution by Source, 1981 . . —— Dollar amount Percent (billions) ——— . of total Patient direct payments . . . . . . $3.8 58.5% Medicare . . . . . . . . . . . . . . . . . . . 0.9a 13.9 (Federal) . . . . . . . . . . . . . . . . . . (State) . . . . . . . . . . . . . . . . . . . 0 . 3 (3.1) Other government . . . . . . . . . . . 4.6 Private health insurance . . . . . 1.1 b 16.9 b Philanthropy . . . . . . . . . . . . . . . . 0.1 1.5 Total . . . . . . . . . . . . . . . . . . $6.5 100.00/0 ——..—..—. ~rhls (S an understatement because it includes approximately one-tenth Of t?xpend It ures provided through hospital-based home health care services. bA proxy was used for expenditures for “home health Care.” The proxy used, reimbursement for “other payment services;’ generally reflects government and patient direct payments for home health care, but may not accurately reflect private health insurance coverage, which is probably much lower than the 16.9 percent I ndicated in the table. SOURCE R M. Gibson and D. R. Waldo, C ’National Health Expenditures, 1981:’ Health Care Finan, Rev. 4(1):1-35, September 1982
60 Federal Policies and the Medical Devices Industry . —— ance for less than 17 percent. These data are for 1981, before expanded Medicare home health benefits as mandated by the Omnibus Budget Reconciliation Act of 1980 (Public Law 96-499) were implemented. Medicare’s share of home health care expenditures may have increased since then. The number of home health agencies has grown dramatically in the past 3 years alone. Table 22 shows the number of Medicare-certified home health agencies by type in 1979, 1981, and 1982. Substantial growth occurred in the number of pro- prietary agencies serving Medicare patients. Part of the reported growth between 1981 and 1982 does not represent development of new agencies but is an artifact of the liberalization of Medicare’s policy regarding certification of proprietary agen- cies that went into effect in October 1981 pursuant

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