4 Ways Home Health is Readying Itself for a Value-Based Economy

Home health care providers are in the midst of a shifting environment and getting on board for ongoing demonstration programs and upcoming regulatory changes.

Even with changes at the Department of Health and Human Services (HHS), home health providers can bet that the momentum to a value-based economy in health care that started from the Affordable Care Act (ACA) isn’t changing.

“This trend is clearly not going away,” Gary Jacobs, a managing partner of Circumference Consulting and a former board member of the Visiting Nurse Associations of America (VNAA), told Home Health Care News. “It’s been reinforced by Alex Azar, [the new HHS secretary]. It looks like the current administration has embraced this path of health reform. The train has left the station and has no intention of turning around.”


Circumference Consulting is a health care consulting firm established in 2000 that focuses on business development and strategic support services to payers and providers in the value-based government programs market.

There are several ways for home health care providers to position themselves for a value-based economy, whether they are in demonstration states for value-based purchasing or not. And providers should prepare—demonstrations from the Centers for Medicare & Medicaid Services (CMS) often end up expanding nationwide.

Not to mention, more opportunities are continuing to emerge, such as the recent expansion of Medicare Advantage (MA) supplemental benefits to include non-skilled in-home supports. MA plans will looks for providers who can provide solid outcomes as the system continues to reward value.


Data empowerment

It’s nothing new for home health care providers to hear they need to have data analytics capabilities, but in a value-based world, collecting and understanding readmissions rates are an absolute.

“You have to have the analytics.. and you have to take them seriously,” Jacobs said. “As health plans move toward chronic care management, providers should recognize what they can do best and keep track of the analytics and financial performance to know their true cost before they enter into any agreement.”

Furthermore, as payers become more involved in reducing costs and improving outcomes for specific disease populations, home health care providers should look at their outcomes, patient base and costs by disease category.

Understand risk

Increasingly, home health care providers are taking on more risk in value-based agreements, such as Medicare Advantage or accountable care organizations (ACOs). Lafayette, Louisiana-based LHC Group (Nasdaq: LHCG) is one such provider looking to make even bigger inroads with payers when it comes to risk management, as the long-term reward is likely to be higher than traditional Medicare fee-for-service.

While LHC Group is one of the nation’s largest home health care providers with the resources to invest in technology to analyze its risk tolerance, smaller providers in the space will also have to get on board—or risk being left behind in the evolving industry. Providers specifically should be able to point to their performance outcomes.

“They can’t just get into the market, unfortunately,” Jacobs said of smaller providers looking to make payer partnerships. “[They] need to know that data to make those decisions to move forward.”

Partner up 

As health system and payer networks narrow, home health care providers are either boosting their quality outcomes in specific disease areas or partnering up with other providers to boost their value-add to networks.

“Be very good at something in what you do,” Jacobs said. “If you’re not, partner up with somebody that is, so collectively you’re both better than where you were individually.”

With their own network in place, home health care providers can approach health systems and payers with a more exact science on the outcomes—and savings—they can achieve.

Ultimately, home health care can play a vital role in the health care space as it charges on toward a value-based economy. Not only can providers get in on growing demonstrations and learn from their own VBP programs, they can also harness their own partnerships and data to become invaluable in the system.

“The whole movement toward value-based care is the fundamental redesign of the American health care system and does crete a model for a uniquely American solution,” Jacobs said. “It combines the role of the public sector and private sector to change health care so it is eventually more affordable and accessible.”

Written by Amy Baxter

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