The traditional world of Medicare-certified home health and hospice is changing rapidly. To the surprise of many, though the pandemic has been an accelerant, the reasons are more fundamental, and at the core are forces affecting the health care sector as a whole. Those forces were on full display at the sellout 20th annual HC100 Conference in Phoenix this week. I had the privilege of listening to former CMS Administrator Seema Verma, former Vice President Al Gore, the CEOs of all major home health firms, and their investors over a three day state of the industry conference. I also moderated a panel lead by Seth Sternberg and Jessie Brumbach, CEO and Chief Brand Officer for Honor Home Health, respectively.
1. The Workforce - No one is surprised by the labor shortages in this sector given the relative wage and benefit levels and competition for workers. What was key is that the labor shortage in the health sector is, for the foreseeable future, permanent given boomer health care needs, nursing shortages, and competitive career paths for younger people. Companies such as Honor Home Health have focused on employing technology in the labor market to professionalize caregivers in the nonskilled area to reduce churn and grow census.
2. New Delivery Models - All avenues lead to better non-inpatient options for consumers, plans and health systems. Almost 200 Hospitals are now participating in the CMS hospital at home waiver program allowing full Diagnosis-Related Group (DRG) payment. Extensions of those waivers with CMS is now pivotal. Many companies have evolved models for care combining clinical, tech, and logistics, including Medically Home. The pending Choose Home Care Act that would allow Skilled Nursing Facility (SNF) eligible discharges to home from acute care settings would be a major boost to the SNF at home model (which has, to date, largely been a function of bundled payment episodes and Accountable Care Organization (ACO) agreements for home care as a downstream provider to hospitals and physician groups). Many of these programs are promising, but the patient focus is narrow and will not replace broader in-home tech enabled non-skilled care models.
3. Technology and Data – Proving savings and better outcomes through data is easier said than done in some cases; however, technology can provide the conduit for that when combined with caregiver collection and education. Many Substance Use Disorder (SUD) providers have done a good job at those and compiled excellent outcomes data over several years to engage plans. Nevertheless, apart from the waivers for telemedicine associated with the pandemic, getting tech adoption at the caregiver level is harder in home health where a more senior workforce may be resistant to technology in place of in-person visits or delegating virtual care to others. Reimbursement in fee-for-service (FFS) is still an issue for both Telemedicine and Remote Patient Monitoring (RPM).
4. Medicare Advantage and Value-Based Care – Value-based care (VBC), mostly through Medicare Advantage (MA) advancement and not through Centers for Medicare & Medicaid Services Innovation Center (CMMI) programs, will continue to ramp. Without tech to blunt a labor shortage and collect good data, providers will be up against it when negotiating with these plans. VBC is not an option now; it’s a core deliverable. Pricing and planning for it are hard, but necessary.
5. Personal Care - Traditional FFS home health and hospice have often viewed non-skilled home care as an adjacent non- core service offering. That is changing rapidly as evidence builds that non-clinical care addressing social determinants of health can provide better and cheaper outcomes. Large platforms are evolving providing tech enabled home care that are partnering with MA plans, self-insured plans, and FFS providers under risk arrangements. Getting the labor supply side rationalized in this space will be the big hurdle. Tech will be a huge factor.
6. Primary Care and Home Health-Longitudinal Care - Integrating primary in-home care with home health, palliative care, and hospice—especially for complex patients—has been a winner to date (see Landmark, Dispatch, Heal). MA has fully embraced this model for complex patients and the admission, readmission, length of stay (LOS), and discharge data support this. Retention of primary care physicians interested in this space is a key focus of these firms as is technology deployment and logistics for durable medical equipment (DME), transportation, and personal care support. These firms feed right into the new delivery model themes mentioned above.
2022 will be an exciting and changing year for home health care—the move to tech-enabled home care in a much more expanded way than in the past will move ahead, fueled by technology and substantial investment dollars coming from private equity and strategics supporting new delivery models.