Home Health Providers Ready to Step Up If Regulators Reduce SNF Capacity

For LHC Group Inc. (Nasdaq: LHCG), the potential to capture patients otherwise headed toward skilled nursing facilities (SNFs) remains a vast area of opportunity.

Leaders from the Lafayette, Louisiana-based company again drove home that point during a presentation at the 2020 Baird Global Healthcare Conference on Wednesday. The home health giant has been extremely bullish on SNF-to-home diversion over the past few months, especially as skilled nursing operators continue to work through COVID-19-related challenges.

“We view SNFs as a vital and important part of the American health care system, so we don’t have a program that is trying to eviscerate them,” Bruce Greenstein, chief strategy and innovation officer at LHC Group, said during the presentation. “But we know there is a need today for options for families and hospitals to discharge safely and appropriately.”

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As of the week ended Aug. 30, there had been 216,219 confirmed COVID-19 cases in U.S. nursing homes, according to publicly available federal statistics. There had been more than 53,000 deaths as well, with the most taking place in New York and California.

In light of those figures, providers across the continuum of care have preached the importance of shifting care into the home and away from group settings.

But it’s not just current emerging needs that will fuel a shift toward the home.

“I think in the next five years, the SNF industry is going to undergo a significant transformation,” said Greenstein, who served as chief technology officer at the U.S. Department of Health and Human Services (HHS) before joining LHC Group. “The facilities themselves are designed very well for efficiency but not infection control. You can see policies that will roll out over the next two years that will help the SNF industry, but reduce their capacity.”

With less space in SNFs, discharge planners and hospitals will be looking for a place to send their patients, according to Greenstein.

That’s where LHC Group and other home health providers come in.

LHC Group has long worked to improve upon its clinical quality and capabilities to fill such gaps in care. Additionally, the company has already found success in its ability to draw high-acuity patients away from SNFs.

“When we measure the number of SNF-diversion patients we’re taking, it’s not in the thousands,” Greenstein, said in August during a Q2 earnings call. “But what’s happening is, we take in dozens and dozens [of patients]. We’re also bringing in new patients that would not have come to us otherwise.”

Still, navigating reimbursement remains a work in progress.

Broadly, when home health providers care for SNF-level patients with more complex care needs, they incur greater costs and have a greater resource use.

“We have the ability to create the capacity to provide everything they need in the home, but the reimbursement isn’t there, so the model will have to be addressed,” LHC Group Chairman and CEO Keith Myers said during Wednesday’s presentation. “There’s a lot of room there. A SNF is roughly $500 a day and home health is about $50 a day.”

With those costs levels in mind, there’s maybe room for some sort of shared-savings program, Myers noted.

LHC Group isn’t the only home health provider looking to move into the SNF space. A number of SNF-at-home models are popping up, as providers have become more strategic when it comes to courting acute patients.

Stanwood, Washington-based Josephine at Home is building a SNF-at-home service line. The same can be said for UnityPoint at Home, a division of West Des Moines, Iowa-based health system UnityPoint.

“[In-home care providers] have known that keeping people at home typically results in better clinical outcomes,” Leslie Palmer, administrator and clinical director at Josephine at Home, previously told Home Health Care News. “It’s less expensive. And it keeps people out of the hospital. I think what’s different now is we have the opportunity to enhance that concept. Now, we’ve named it ‘SNF-at-home,’ and we’ve formalized operational aspects.”

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