NCPA - National Center for Policy Analysis


April 14, 2010

The federal government's ambitious new drive to cut costs and improve care for disabled military veterans is occurring in hundreds of "medical foster homes" run by private caretakers across the country that take in veterans who cannot care for themselves, but do not want to live in an institution.  The vets pay the foster family's expenses, while the Department of Veterans Affairs (VA) covers the costs of regular visits from health care providers, such as nurses, therapists and dietitians. 

The result is dramatically lower costs, says the Wall Street Journal:  

  • The VA pays just about $52 a day for patients in foster homes, compared with an average of $469 for those in nursing homes; many vets say they're far happier.
  • Veterans pay their caregivers $1,500 to $4,000 a month, depending on the level of assistance they need.
  • For most vets, that means turning over their entire income -- their military pension and their monthly Social Security benefits. Some have to dip into savings as well. 

The VA screens the caregivers, makes unannounced inspections and sends health care providers representing a variety of professions to the home about once a week.  That last piece alone yields significant cost savings: Veterans who receive home visits from nurses, pharmacists, counselors and other professionals spend about half as many days in the hospital as peers who are living on their own, the VA has found.  The VA's total treatment cost drops 24 percent when a veteran signs up for this type of in-home care. 

Then there are the savings on room and board: 

  • The VA doesn't cover nursing home fees for all veterans, just those whose ailments tightly tied to their military service.
  • But so far, about a quarter of the 600 veterans who have gone into medical foster homes are in that category.
  • As long as they're happy in foster homes, the VA is off the hook for nursing home care. 

Source: Stephanie Simon, "Happier Vets, Lower Costs," Wall Street Journal, April 13, 2010. 

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