Estimating Cost Savings of Care Coordination for Older Adults: Evidence from the Iowa Return to Community Program

In response to rising costs associated with providing health care services to Americans over 65 years old, policymakers have called for the expansion of care coordination programs to reduce total spending while improving patient outcomes and provider efficiency. This study uses a Markov Chain model to estimate financial impacts associated with the implementation of a care coordination program across the state of Iowa. Estimates revealed an association between the implementation of the Iowa Return to Community (IRTC) and a reduction in health care service use, which yielded per capita cost savings of $7,920.24 over a 5-year span. Subgroup analysis showed that inclusion of informal care partners enhances these savings, as they contributed to reduced inpatient hospital use and deferred nursing home admissions. The continued expansion of the IRTC appears as a viable strategy to curtail aggregate health care spending while supporting older adults stay at home.