Home Health, Hospice Admissions Rise as Americans Age into Medicare at Historic Pace

Americans are aging into the Medicare system faster than ever, contributing to the continued rise of home health and hospice admissions in 2018. Increased admissions come despite the fact hospitals are still discharging more of their patients to skilled nursing facilities (SNFs) or home without any post-acute care services.

That’s according to Excel Health’s latest quarterly trends report for the home health and hospice industries.

Atlanta-based Excel Health’s quarterly reports highlight emerging trends in the post-acute care sector and broader Medicare universe. Released Wednesday, its latest report pulls data through the first quarter of 2018 for Medicare and hospice insights. Home health data is pulled through the fourth quarter of 2017, as the Centers for Medicare & Medicaid Services (CMS) has not yet released the complete set of Q1 claims.


“We expanded the data and will continue to do so — and we will continue to advocate for the industry,” Excel Health CEO Ian Juliano told Home Health Care News in an email. “We believe in what this industry is doing.”

Medicare Advantage growing, despite possible dissatisfaction 

Another 1.2 million baby boomers became Medicare beneficiaries between the first quarter of last year and the close of Q1 of 2018. With the overall system, there are currently about 58 million beneficiaries, looking at both the Medicare Advantage (MA) program and traditional fee-for-service Medicare.


As has widely been reported, the share of beneficiaries in Medicare Advantage plans is growing fast. About 35% of Medicare beneficiaries are currently enrolled in MA plans, but that’s projected to check in closer to 40% or higher in the not-too-distant future, according to Excel Health.

Even so, there do appear to be some differences in MA perception within the baby boomer generation.

Trailing-edge baby boomers — those born later than their leading-edge generational peers — are known to have more exposure to managed care plans and options that drive the selection of benefits. Accordingly, they are more likely to subscribe to an MA plan and more likely to change plans to fit their evolving expectations.

However, a recent survey found that 58% of trailing-edge baby boomers express some level of dissatisfaction with their health coverage compared to leading-edge baby boomers, according to Excel Health. In comparison, about 78% of leading-edge baby boomers are satisfied with their benefits and services.

More than one-third of all Medicare beneficiaries live in one of five states: California, Florida, Texas, New York or Pennsylvania.

Within the next 15 years, the number of beneficiaries is expected to reach 80 million.

Referral patterns hold steady  

In general, where patients go after hospital stays has remained relatively consistent over the past several quarters.

Roughly half of hospital patients have no coded post-acute care destination at the time of discharge, according to Excel Health. When they are directed toward a certain care setting, about one-third of patients are referred to home health services, though slightly more are sent to SNFs. A very small percentage of hospital patients — about 4% in total — are referred to hospice services.

“Home health care admissions could certainly catch up to skilled nursing admissions as the population continues to be more comfortable with in-home treatment,”Juliano said. “In our opinion, the more important message is that home health agencies and SNFs need to coordinate and work together more than ever to ensure the best outcomes for patients.”

Image taken from Excel Health Q1 2018 quarterly trends report

Perhaps unsurprisingly to industry insiders, there’s a distinct difference in referral patterns between the eastern and western portions of the United States. Eastern states — including Maine, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, New York and Delaware — are among the most likely to be discharged to a post-acute care setting.

As currently set up, Medicare spends about $60 billion annually on post-acute care services, with roughly half of that amount going to SNFs, according to Excel Health. Home health providers receive about $18.4 billion in Medicare post-acute care spending.

“Both the SNF and home health markets are facing payment reform,”Juliano said. “SNFs will be less incentivized to provide high therapy volume over longer lengths of stay because the payment thresholds are changing to a more patient-centric payment model that does not recognize — or pay for — therapy volume. The same goes for home health agencies, where therapy visit thresholds will no longer be rewarded. Providers in both settings will need to rethink their business strategies, and, in particular, how to position themselves for admissions with the payers that care about total cost and outcomes.”

Analyzing admissions

The latest CMS data shows that home health and hospice admissions are both up — with hospice leading the charge.

There were about 13,7000 more hospice admissions in the first quarter of 2018 than the same quarter a year prior, representing a growth rate of about 4%.

At least some of that growth can likely be traced back to a CMS rule change in 2016 that enabled physicians to bill for advance care planning conversations with patients as a way to help them make more informed decisions about end-of-life care, according to Excel Health. Past research has found that when physicians are active in are planning discussions with patients and their families, patients are drastically more likely to elect hospice than they would have otherwise, Excel Health noted.

Hospice average length of stay is about 75 days, continuing the trend of hospice stays becoming longer due to the prevalence of patients affected by diseases with long-trajectory declines, such as Alzheimer’s disease.

Home health admissions began seeing a noticeable increase that started in the third quarter of 2017. The industry has maintained some of that momentum, according to Excel Health, as Q4 2018 home health admissions increased by about 1.8%.

The home health admissions spike was likely linked to 2017’s “unprecedented, high-severity flu season,” Excel Health stated in its report.

Written by Robert Holly

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