With payment reform, technology advances, and other market forces shifting medical service delivery away from the hospital setting, home care presents both business opportunity and risk.
As hospitals reach outside their walls to be more closely involved in the entire care continuum of patients, home care presents some tantalizing opportunities.
With Medicare reimbursement changes providing a financial foundation for change, home care is increasingly becoming a critical component of integrated health systems, says Sheila Schubert, administrator of home health for Hollywood, FL-based Memorial Healthcare System.
“For a very long time, people have known this is the way medical care should be delivered. This has been predicted for more than 20 years, and now it’s really happening. We’re doing IV drips at home. We’re monitoring patients at home. Services that used to be done in the ICU are now being done in the home,” she says.
Schubert joined the staff at Memorial Healthcare five years ago and has worked in home care for two decades. “People are so much more comfortable if they can receive good care and be in their home.”
Memorial Healthcare, which has offered home-care services to patients since 1992 and operates five acute-care hospitals in southern Florida, is well-positioned for growth. “All of the components of a home health agency to serve the community were in place, including a staff trained in home health,” she says.
Recent changes in Medicare reimbursement rules such as the Hospital Readmissions Reduction Program and new payment models such as pricing services based on episodes of care are major drivers of change in home health.
In response, Memorial Healthcare has shifted away from its per-visit payment model for home care toward bundled payment models that are designed to promote quality and good clinical outcomes. Schubert anticipates “bundled payments based on diagnosis for acute care and post-acute care across the care continuum. We will be paid based on the quality of care and outcomes.”
The biggest bang for the home-care buck is in the area of cost avoidance, such as reductions in avoidable hospital readmissions. “Home care has taken the lead to make sure there are smooth transitions,” she says.
While cost avoidance may not be as exciting in the C-Suite as revenue growth, limiting unnecessary medical expenses is one of the keys to delivering value-based care. “It’s not that home care has to be a money-maker. It’s that home care improves health in the community and supports the health system,” she says.
Entering the Home-Health Market Through Acquisitions
Home care has followed a different, but no less significant evolutionary path at Pittsburgh-based Allegheny Health Network, which entered the home health market in 2014 through the acquisition of four companies. Each of the acquired companies had experience in a prime home-health specialty: home nursing, infusion therapy, medical equipment, and hospice.
“We own and operate all the home-health segments,” says Brian Holzer, senior vice president for diversified services at AHN, which runs seven acute-care hospitals in western Pennsylvania. “Once we acquired all the companies, we built a new care coordinator model.”
Care coordinators are a crucial component of Healthcare @ Home, the business unit that manages AHN’s home-health services, he says. Instead of having a handful of care coordinators at each home-health subsidiary, there are about 40 care coordinators on the Healthcare @ Home staff who help the subsidiaries coordinate all home-health services for each patient. “We have four home-health companies, but a single point of contact for the patient,” Holzer says.
Christopher Cheney is the senior clinical care editor at HealthLeaders.