Since the Affordable Care Act was enacted in 2010, U.S. health care spending has steadily climbed — along with the country’s population of older adults and those with chronic conditions.
To help bend the cost curve and deliver care to seniors in their preferred setting, health care has, in turn, noticeably shifted into the home since then. It’s a trend that’s destined to continue moving forward, according to Scott Powder, chief strategy officer of Advocate Aurora Health.
“Quite frankly, I sort of think there’s almost nothing that won’t eventually move into the home,” Powder said during a Tuesday panel discussion at the Health Care Innovation and Investment Conference in Chicago.
With dual headquarters in Milwaukee and the Chicago suburbs, Advocate Auro Health is the 10th-largest nonprofit, integrated health care system in the country. In total, the system serves nearly 3 million patients annually throughout Illinois and Wisconsin, operating across 27 hospitals, 500 outpatient locations and 63 Walgreen’s clinic sites.
So far, health care’s shift in the home has encompassed everything from services traditionally provided in the skilled nursing facility (SNF) world to the expertise of doctors.
LHC Group Inc. (Nasdaq: LHCG) is among providers that have seen success with SNF-to-home models. The Lafayette, Louisiana-based home health powerhouse has seen a more than 50% reduction of SNF utilization in some of its key markets, for instance.
Meanwhile, Minnesota’s Return to Community Initiative (RTCI) — a program that helps nursing home residents transition back into their communities — has saved the state saved $3.9 million annually over a four-year period. Programs similar to RTCI keep popping up, despite skilled nursing industry claims that diversion efforts have peaked.
Examples highlighting the momentum of home-based primary care models are likewise abundant.
They include the work of innovative home care provider Lifesprk, in addition to doctor-on-demand startup Heal, which has raised more than $71 million since launching.
“We’re seeing a number of evolving models that will help to bend and improve the cost curve in a sustainable way,” Bain & Company Partner Jason Slocum during the panel discussion.
While operational challenges remain, the next major shift into the home may be the hospital itself.
“The concept of the hospital at home is now 20-plus years old,” Powder said. “What [organizations] couldn’t figure out was how to scale it. They were putting expensive doctors in cars driving around. That … is incredibly ineffective.”
Newfound Telemedicine capabilities and other technological advancements are solving some of the pain points, he said. Doctors, for example, no longer have to physically travel into the home in every instance.
Nashville-based Contessa — a hospital-at-home provider that has raised more than $30 million since launching — is just one emerging hospital-at-home player. It landed its latest health system partnership in May, teaming up with Chicago’s CommonSpirit Health.
“If you’ve got a five- to seven-year outlook in terms of your investment, [hospital at home] is a good place to be putting money right now,” Powder said.