Reduce Costs by Adopting a Person-Centered Care Approach

Updated January 30, 2024
Key Takeaways

Practicing person-centered care has been shown to reduce costs while improving outcomes. A key reason is that this model of care can keep older adults engaged in their treatment plan, which in turn helps them age in place and delay or avoid moving to higher-cost settings. Long-term care providers who invest in building a person-centered care climate can benefit as well.

Person-centered care is a hot topic in long-term care. One reason for the buzz is that practicing person-centered care has been shown to improve health outcomes as well as the care experience while reducing health care costs, goals the long-term care industry has struggled to attain consistently.

However, although these claims for person-centered care get a lot of press, you don’t often hear just how practicing person-centered care does more for less. That’s a shame, because when we understand how, we better understand why maintaining a person-centered care climate makes good business sense. So let’s take a look.

Keeping clients engaged

Client engagement is critical to controlling the cost of care. Directly engaging the care recipient and their care circle in the plan of care is a central principle of person-centered care. It’s included in CareScout’s definition:

Person-centered care looks beyond safety, to also integrate a person's values, preferences, and goals into the care they receive. It creates a partnership between caregiver and care recipient that encompasses the physical, mental, spiritual, and social elements of a person's health.

With more than one in five Americans caring for a family member or friend at home,1 this aspect of shared decision-making makes person-centered care ideally suited for long-term care, where multiple people — family, friends, and neighbors — often need to be on board if the plan is going to work.

Perhaps even more pertinent, care that honors an older adult’s goals, preferences, and values can motivate care recipients to stick with their plan of care. Many older adults aging in place have chronic conditions. Diabetes, heart failure, chronic oppressive pulmonary disease, dementia, and other conditions often require lifestyle changes, such as improvement in diet or quitting harmful habits such as smoking. These changes can be effective only if they are followed, and they are more likely to be followed if they reflect what matters to the individual.

These two factors — engagement and motivation — help explain some of the evidence behind the cost and outcomes claims for person-centered care:

  • Better medical management. Care recipients who take part in shared decision-making are more likely to follow their treatment plan and take their medications as prescribed.2

  • Fewer emergency department (ED) visits. People who are empowered to manage their own care more effectively are less likely to use emergency hospital services.3

  • Less costly care. When care recipients are better informed, they may consider several treatment options, often opting for those that are less invasive and less expensive.4,5

The AMA Journal of Ethics Research has echoed these findings. It has concluded that practicing person-centered care results in shorter recovery times, decreased emergency room visits, and reduced use of health care resources.6

Helping clients age in place

Most older adults say that given the choice, they would prefer to age in place.7 So helping clients age in place for as long as they are able is a major goal of person-centered care. The person-centered care benefits cited above — following the treatment plan and fewer ED visits — support this goal.

Those benefits can also play a role in reducing hospital readmissions. Readmissions are a key driver of health care costs and are common among older adults, with rates ranging from 11% to 23% among Medicare beneficiaries.8,9 Older adults also have a higher rate of transitions between care settings.10 The more we can keep older adults in long-term care from bouncing back and forth between home and higher-cost health care settings, the lower costs will be.

How person-centered care helps your business

Clearly all these benefits help patients, clients, and the health care system. The good news is that providers reap benefits as well.

For example, there’s ample evidence that maintaining a person-centered care climate can improve employee retention. Studies of the effect of person-centered care programs on caregivers have found significantly higher ratings of job satisfaction,11,12 reduced stress of conscience,13 lower emotional exhaustion,14,15 and higher morale.16

Because engaged clients tend to age in place longer, providers can potentially keep clients longer as well. It also stands to reason that if clients have a positive care experience and enjoy better quality of life, those outcomes will be reflected in improved satisfaction scores and increased referrals to your agency.

One concern some providers have about practicing person-centered care is that it can involve higher costs up front — for training, for equipping caregivers with the additional time and tools they need to deliver on the promise of person-centered care, and to regularly measure client- and staff-reported outcomes to help improve the quality of a person-centered care climate.

This should come as no surprise. Anything that is going to improve quality in health care is going to take an investment of time, effort, and intention to do better. However, with person-centered care, it’s a solid investment that will repay you with cost reductions down the road, including less time and money recruiting and hiring staff, and more business in the form of increased referrals.

CareScout can help

Here’s more good news: When you become a provider in the CareScout Quality Network, CareScout can help mitigate some of those upfront costs by providing essential support and an infrastructure for building and maintaining a person-centered care climate:

Continued staff training. CareScout provides support for person-centered care practices through access to free CE-credit courses aligned to person-centered care and inclusion in our person-centered care program. Training modules are available for all staffing levels.

Continued assessment and quality measurement. CareScout’s person-centered care education and survey program provides regular evaluation around person-centered care practices, elevating those providers who continue to meet carefully defined person-centered care standards.

Spotlighting your person-centered care difference. Belonging to the CareScout Quality Network gives you recognition for quality care as part of a curated group of providers known for their quality and commitment to person-centered care.

You're already spending money to build your business. What are you investing in now? Are those investments going to ultimately save you money and grow your business? Consider investing in person-centered care. It can be a key to your future.

Explore the Benefits

Learn more about how practicing person-centered care makes good business sense. Ask about becoming a provider in our CareScout Quality Network.

Written by

Laurie Renzulli

Laurie Renzulli, MBA

Laurie is a health care business development executive with a passion for identifying top quality providers and helping them differentiate in a complex post-acute market. She has helped businesses grow in both the indemnity and managed care insurance industries, includin...

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