A growing number of stakeholders in the skilled nursing facility (SNF) world believe the recent spike in hospital discharges to home health care services will not become permanent.
Executives from real estate investment trust (REIT) Omega Healthcare Investors (NYSE: OHI) made that argument during a fourth quarter earnings call earlier in February. Executives from CareTrust REIT (Nasdaq: CTRE) are now doing the same.
“Home health has historically been a very close second to skilled nursing for Medicare post-acute discharges,” David Sedgwick, the COO and newly promoted president of the San Clemente, California-based CareTrust, said on a call last week. “And given the circumstances of COVID, I don’t think anybody’s surprised that home health has bounced back faster than skilled nursing. But I’d say that the narrative around home health permanently taking share from patients from skilled nursing is mistaken.”
Specifically, Sedgwick and others believe that SNF-referral patterns will return to “normal” due to the higher-acuity, high-touch needs of the typical facility-based patient.
Most home health providers have found themselves caring for far more complex patients since last spring, with some struggling to adjust.
During last week’s call, Sedgwick cited a conversation with “a fairly large regional home health operator in the Midwest” that cares for about 1,400 lives a day. According to the CareTrust exec, that home health provider has had to divert 30% of its new patients to SNFs due to the high-acuity needs of those individuals.
“It’s just a very different type of patient. And those patients, well before the pandemic, have already largely been going home if at all they had that ability to do it,” Sedgwick said. “So we believe that with time, the balance of discharges to skilled nursing and home health will recalibrate.”
Unsurprisingly, home health providers have taken a very different stance on what post-COVID post-acute care trends will look like.
Executives from some of the largest home health companies have very pointedly stated that this new era of SNF-to-home diversion won’t slow down anytime soon, especially as more operators build and launch dedicated programs targeting the traditional SNF patient.
It’s additionally worth noting that home health providers have very steadily been winning more hospital discharges away from SNFs over the last few years.
That trend was destined to continue even before the coronavirus.
During the first quarter of 2020, 51.1% of all in-patient stays were coded with post-acute care instructions upon discharge, according to a recently released trends report from Atlanta-based analytics and metrics firm Trella Health. Of the in-patient stays coded for post-acute care, 21.6% were coded for home health care, with 21% coded for SNF.
During the first quarter of 2019, 23.3% of all in-patient stays coded for post-acute care were referred to home health care. Just 21.1% were coded for SNF stays.
“The decrease in SNF referrals reflects a broader trend within the industry,” Trella’s report highlighting the Q1 2019 figures observed. “A lower percentage of in-patient discharges to skilled nursing and decreased SNF utilization over the past four quarters could portend continued challenges for SNF providers.”
Overall, home health admissions were actually down somewhat in Q1 2020 compared to previous reporting periods, according to Trella. Admissions were down 2.2%, though that decrease is likely attributed to the postponement of elective surgeries, stay-at-home orders and other coronavirus-related disruptions.
Although admissions were down, home health utilization increased from 27.8% for Trella’s Q4 2018 reporting period to 29.3% for the current reporting period. Trella defines utilization as the number of patients discharged from an in-patient stay and subsequently admitted to home health during the most recent four quarters, divided by all in-patient discharges for the same four quarters.
“The state of post-acute care — and health care in general — is likely to be changed forever in the wake of COVID-19,” Trella CEO Ian Juliano stated. “While the full depth of the pandemic’s impact is still unknown, we will continue reporting as new data becomes available.”
Additional reporting by Maggie Flynn.