Home health agencies have traditionally staked their claims within the continuum of care as post-acute service providers, serving patients who are discharged from hospitals, often after experiencing traumatic medical events. Advances in predictive modeling, data analytics and overall care delivery — coupled with a chronically ill patient population — are now prompting the home health industry to shift toward a more pre-acute focus.
There’s one big problem, industry stakeholders argue. Federal policymakers and home health providers aren’t exactly on the same page.
“This business is often dependent on fee-for-service [Medicare], and that was built on an acute environment,” said Paul Kusserow, president and CEO of Baton Rouge, Louisiana-based Amedisys (Nasdaq: AMED), one of the nation’s largest home health providers. “We’ve gone from an acute environment to a chronic environment. What we have to figure out as a business is how to get value for taking care of [chronically ill patients]. I don’t see the government doing that.”
Kusserow described home health’s evolving identity Sept. 20 during the second annual Home Health Care News Summit in Chicago. He was joined by Humana (NYSE: HUM) Chief Medical Officer Roy Beveridge and Homewatch Caregivers CEO Julie Smith.
Insurance giant Humana — which owns a 40% stake of Kindred at Home, the nation’s largest home health company — also believes home health has taken a pre-acute turn. A greater ability to understand “what’s going on in the home” with solid data is the key to making that shift successful, Beveridge said.
“Let’s play a game,” he said. “If you have all the data, you have the analytics [and] you have all the member data for three to five years beforehand, is it possible for one to change the paradigm in terms of home care from post-acute? Can you begin to identify people who are seriously ill at home — who could be admitted — and get resources to them to prevent an admission?”
The idea of the home health industry evolving into a pre-acute care services is not new. It’s a transformation, in fact, that the Medicare Payment Advisory Commission (MedPAC) highlighted in its federal health care spending data insights released in July.
Of the 3.9 million home health episodes that took place in 2001, about half were for episodes preceded by a hospitalization or post-acute care stay in a setting such as a skilled nursing facility, according to MedPAC. Of the 6.5 million home health episodes that took place in 2016, in comparison, about one-third were preceded by post-acute stays.
Keith Myers, chairman and CEO of major provider LHC Group (Nasdaq: LHCG), is also among the industry leaders who have previously discussed the shift.
It remains in the forefront of home health conversations, however, because policymakers appear to be taking measures that conflict with where the industry is heading, along with their own desires to direct care to low-cost settings. PDGM — the new home health payment model from the Centers for Medicare & Medicaid Services (CMS) — may be the perfect example of that opposition. Its precursor — the Home Health Groupings Model — was another example.
Specifically, PDGM comes into conflict with the post-acute to pre-acute shift with a provision that may disincentivize home health providers from taking home- and community-sourced patients. Namely, the new framework would pay higher rates for patients coming from an institutional setting.
“We think that there’s kind of a schism in the government,” Kusserow said.
Providers and advocates, with the help of Congress, managed to fend of HHGM last year. There are signs of similar pushback with PDGM, too, especially as new legislation introduced in both the House and Senate gains political support.
Medicare Advantage paves the way
As much as the federal government seems to be pigeonholing the home health industry in traditional perceptions, the Medicare Advantage market is giving it a chance to shine and carve out new roles.
“If you can take care of the 5% of the [sickest] chronically ill patients and keep them at home, give them a decent lifestyle and stop their readmissions [and] institutionalizations by getting in front of them first, if you can do that, you’ll get a very good partner in the managed care plans,” Kusserow said. “The other thing is that you can demand better fees because you’re taking more risk and you’re keeping [patients] out of other post-acute areas, preventing hospitalizations. That’s a huge chunk that you can then start to negotiate with.”
Medicare Advantage also could open doors for private duty home care providers to play a larger role as this paradigm shifts. Starting in 2019, MA plans will be allowed to cover non-skilled in-home care for the first time.
It remains to be seen how insurers will structure this benefit. But it’s easy to see how home care providers are already on the frontlines of pre-acute care — for instance, by spotting early warning signs of impending health issues and involving other parts of a client’s care team to prevent a hospitalization.
Homewatch CareGivers, a large private duty franchisor with a presence in seven countries, sees the MA changes as a major opportunity. Being able to capture data and use it to prove outcomes will be key to partnering with health plans, she told HHCN in April. Having a large enough patient population will also be critical in helping payers and their other provider partners in driving down costs and achieving quality goals, she said at the Summit.
“For us, the focus is to fill in our whitespace, deepen our footprint here in the United states because this is a game of scale,” Smith said. “In order to really participate with the gentlemen and their organizations to my left and my right, we need to have that full footprint.”
Humana is one of the largest Medicare Advantage insurers in the nation. Through its recent acquisitions and partnerships, including one with Walgreens, Humana plans to continue exploring the concept of moving its chronically ill members into low-cost settings that see equal or better health outcomes, Beveridge said.
“We have multiple alliances working with different groups, figuring out where we can engage the member, the physician’s patient, in places that are comfortable for them,” he said. “Remember, there are 7,600 hours in a year. Most of our patients … probably spend less than two hours seeing a physician, meaning there’s [thousands] of hours where people are not monitored, where we don’t know what’s going on.”
Humana is in a unique position to execute on this idea, given its stake in Kindred at Home. But Beveridge suggested that this has to be an industry-wide shift, or traditional health care players will become obsolete.
“If we’re still playing into the expectations of what people believed five years ago, we’re going to be, as an industry, disrupted,” he said. “We’ve got to take multiple opportunities to test where people want their care.”
Written by Robert Holly