LHC Group Aims to Make Value-Based Purchasing Home Health Care’s Version of ‘Moneyball’

Many home-based care workers saw pay bumps this year due to labor shortages and skyrocketing demand.

In part, providers increased compensation to strengthen internal retention and minimize the use of costly contract labor. Bruce Greenstein, chief strategy and innovation officer at LHC Group Inc. (Nasdaq: LHCG), believes hiked wages are simply the market working the way it’s generally supposed to.

“The price for the labor itself has gone up dramatically,” Greenstein told Home Health Care News. “And to some extent, maybe it’s just a market working efficiently, in that we have massive, excess demand for a limited supply of this thing.”

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Thanks to the aforementioned pay bump, some nurses have been able to repurpose money for travel, pay off student loans or save more money for their families, he said.

While the current price of labor is about 50% above the normal level, it will eventually stabilize, Greenstein added. But even when it does, providers can still probably expect a rate about 5% to 10% more than what it used to be pre-pandemic.

“What we need to do as a nation is really focus on the production of a larger clinical workforce,” he said. “Our universities need to step up. State and federal governments need to focus attention on this. Companies need to invest in training programs. We can’t just take the availability of both clinical and non-clinical caregiving for granted anymore.”

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Technology also plays an important role in retaining staff, despite the fact providers often under-invest in the area, explained Greenstein, who previously served as CTO of the U.S. Department of Health and Human Services (HHS). In a 2021 survey from software and technology company Forcura, for instance, just 38% of respondents cited technology adoption as a top priority.

“We need to continue to develop and evolve our technology infrastructure, to push ahead with the productivity gains that come along with the proper implementation of technology,” he said. “And we really need to cultivate and develop staff that are both home health business savvy, but also are really able to master the technology.”

The ‘Moneyball’ of home health care

In the early 2000s, Major League Baseball was disrupted by a new line of thinking. Statistical analysis changed how the game was played, and the most efficient – not necessarily talented or rich – teams began to gain an edge.

It’s all documented in author Michael Lewis’ book “Moneyball,” which dubbs the revolutionary line of thinking in the title.

The Home Health Value-Based Purchasing Model (HHVBP) could be home health care’s own moneyball, Greenstein believes.

“I am ecstatic about the decision to put the model nationwide,” he said. “It was one of [the most effective] programs in the history of the Center for Medicare & Medicaid Innovation (CMMI). And if I could change any one thing, I would ask CMMI and CMS to share some of the savings back with home health providers that are causing the savings.”

LHC Group participated in seven of the nine HHVBP demo states and performed “very well,” according to Greenstein.

“We do really well with patient satisfaction, and we do better than average for readmissions,” he said. “When we think about how we’re approaching this, we sort of intend to ‘Moneyball’ the program. It’s about paying attention to the individual attributes of each agency.”

Broadly, that means getting down to the individual agency level – and the individual clinician level – to provide coaching and support for HHVBP success.

That’s where technology again comes into play. To execute on a detail-oriented “Moneyball” strategy for HHVBP, technology will have to act as a facilitator.

“This is where technology is really important,” Greenstein said. “That’s where we think we will do really well. It’s both the deployment and the orchestration of those assets, together, that’ll allow us to [execute] on this great idea. I think every agency will have a great idea for the value-based purchasing program – but if you can’t orchestrate it and you can’t execute on it, then your scores will remain relatively stable.”

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