Objective: Twice during the last century in the United States, third party reimbursement for care of the sick at home has faltered. The first experiment, initiated in the private sector by Metropolitan Life Insurance Company (MLI) in 1909, was terminated in 1952. In the second experiment introduced in 1965, the federal government’s Medicare Program created a limited form of social insurance for home care. In 1997, this benefit was replaced by a dramatically altered payment system and approach to care. Despite conception in the private sector and relocation to the public sector, these mechanisms for financing and managing care of the sick at home confronted common challenges.

Design and Methods: This study examines the history of organized home care in the United States from its origins in 1813 through current experiments with Medicare financed home care. Using the methods of social history, the social structures, processes and experiences impacting the financing of home care are examined. Archival materials at MLI, the South Carolina Historical Society, visiting nurse associations across the United States, and public testimony provide the basis for this analysis.

Findings: Despite the anticipated benefits of social insurance for home care, this is a cautionary tale where success required careful management of cost, demand, productivity, and mortality. Both MLI and the Medicare program found home care difficult to control and its cost effectiveness hard to document.

Conclusions: In both experiments, it was the vexing problem of the uncontrollable nature of chronic illness, as well as the matter of cost-effectiveness, that made home care a complex and risky business.

Implications: Understanding the history of third party reimbursement for home care provides the necessary background for current policy debates as we attempt to identify the circumstances in which public financing of home care is appropriate.

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Sigma Theta Tau International
July 22-24, 2004