Home Care as a Key Population Health Investment

Home health is playing a significant role in reducing hospital readmissions and total cost of care at Florida's Lee Memorial Health System.

Investing in home health capabilities has become a cost-effective element of the population health strategy at Fort Myers, FL-based Lee Memorial Health System.

"Having home health capabilities allows patients to be discharged from the hospital sooner and receive a higher level of care without having to go to a post-acute facility all of the time," says Joby Kolsun, DO, clinical integration medical director at Lee Physician Hospital Organization.

"Owning the home health resource reduces unnecessary testing by allowing the complete record to be available to the nurses, as they share the same electronic record system."

Lee Memorial has a total of 1,423 licensed beds distributed across four acute-care hospitals, a rehabilitation hospital, and a children's hospital. In 2015, the health system posted patient service revenue of $1.4 billion.

Thomas "TJ" Pennsy, MBA, RRT, is executive director of home health services at Lee Memorial. He says there are several elements to investing resources in home health and achieving a return on investment.

"The major investment is clinical expertise in the form of nursing, nurses' aides, medical social work, and physical, occupational, and speech therapy, at a minimum."

"As more clinically complex patients are sent home," he says, "the level and cost of clinical expertise will rise. Additionally, the growth of in-home technologies has led to a greater use of telehealth and telemedicine to connect physicians to the clinicians and the patient in the home. The investment can be quite expensive, but may be offset by reduced readmissions back to the hospital and the corresponding costs incurred in that setting by addressing and treating possible emergent situations at home," Pennsy says.

Significant Cost Impact

The potential for home health programs to reduce total cost of care at Lee Memorial is significant.

"The average variable—labor and supplies—cost for a heart failure patient readmission within 30 days is $4,700," he says. "The total readmission cost is $9,800 and is more than $1,100 higher than the first admission.

"Taking into consideration the cost of readmissions and readmission penalties, hospitals may find it is cost-effective to use home health resources as a component to reduce readmissions in coordination with the patient's primary care physician." 

Lee Memorial's home health program has made an impact in reducing hospital readmissions, Pennsy says. "Our overall return-to-acute for all home health admissions dropped from 15.9% in fiscal year 2015 to the current 14.9% in fiscal year 2016."

Readmission rates are a key financial metric for the home health program at Lee Memorial and other nonprofit healthcare providers.

"Success," he says, "is dependent upon solid operations and a favorable patient payer mix. The not-for-profit, hospital-based [home health] agencies usually receive all patients regardless of payer, and their success is measured by limiting and reducing return-to-acute and the emergency room while maintaining lower operating costs."

At Lee Memorial, home health is part of a broader commitment to population health in southwest Florida. Kolsun says the health system is investing in:

• Case managers "to handle complex, high-utilization patients and help them reduce their use of expensive health resources. 
• Data and analytic systems "to allow us to better manage our populations"
• Awareness and education "in our community in regards to health and wellness, including inviting national speakers on the benefits of proper nutrition"

The health system is using several metrics to gauge the performance of its population health-oriented programs. "Currently, we use our total cost of care for our value-based contracts to gauge how we are performing financially. We also use a number of quality measures that let us track improvements in care that are related to our population health initiatives," Kolsun says.

Investing in population health capabilities appears to be sustainable at Lee Memorial. "Overall, I would say we are about neutral," Kolsun says of the financial impact of the organization's population health programs so far.