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Costs of Acute Care Services Compared to Home Care Services (NA0101-9)

Recipient: Institute of Health Economics, Edmonton

Contribution: $100,000.00

This study looked at the cost-effectiveness of home care compared with that of acute care to determine if additional opportunities existed for cost savings or increased system efficiencies. The study used Alberta data for hospitals and home care to generate data on care episodes for people in hospital, those with inter-hospital transfers, and episodes that included both hospital care and home care services. Data were analyzed on the basis of case mix groups (CMG), which categorize hospitalizations into groups of individuals that use approximately equal amounts of resources. The results showed that admissions with inter-hospital transfers were 1.75 times more costly than those without transfers. The report concludes that, as a result, costing should be done by episode of care (a set of contiguous inpatient and home care contacts) and that current hospital costs calculated by CMG or resource intensity weight (an index number that measures the relative cost of a CMG) may be under-estimates. The report found that most combinations of hospital care and home care were more expensive than hospital care alone, but that care needs (number of diagnoses) were also higher for persons who received home care. The author notes that case severity is an important indicator of home care assignment and that home care episodes are more costly because they have a higher degree of severity.

Fact Sheet


This project was supported by the Health Transition Fund, which was created in 1997 to provide support for evidence-based decision-making in health care reform by supporting pilot and evaluation projects which test innovative approaches to health care delivery. The views expressed herein do no necessarily represent the official policy of federal, provincial, or territorial governments.


Last Modified: 2005-08-29