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Predictions are a lot like playing the offensive line. If you do your job and get them correct, it goes unnoticed. If you get them wrong and make a blunder, they’re far more noticeable.
But it’s more fun to point out the blunders anyway. And given how 2022 turned out and all the predictions we made at Home Health Care News in January, it won’t be hard to find them.
We did not foresee the Centers for Medicare & Medicaid Services (CMS) so aggressively trying to reduce payment rates, for instance. A home care company did not enter the public market. Certain providers did not fare as well as we expected them to. Choose Home was not the top legislative and regulatory battle of the year.
Data capabilities were a major separator, wage hikes did put home care companies in precarious positions, COVID-19 was still a major disruptor, and more leadership changes did, in fact, come.
We did predict that. But that doesn’t matter for this exercise.
For this week’s exclusive, members-only HHCN+ Update, I’m diving into what my colleagues and I got wrong in 2022 – and why.
Choose Home at center stage
In January, HHCN predicted home health trends for the coming year.
My colleagues and I believed that The Choose Home Care Act of 2021 would dominate legislative and regulatory discussions in 2022. Boy, were we wrong.
Broadly, Choose Home would essentially create an add-on to the home health benefit. If providers could take on higher-acuity patients and keep them out of more costly settings, like skilled nursing facilities (SNFs), they’d be rewarded.
From the moment the proposed payment structure for SNFs in CY 2023 was released in the spring, though, things changed. Murmurs and expectations of a not-so-friendly home health payment rate proposal took over, and then that came to fruition in June.
From June to October, that dominated the conversation. Even after the final rule came out, home health providers were still mostly concerned with how they will keep their heads above water in the coming years rather than an add-on payment.
Of course, Choose Home is still a piece of legislation that most every home health agency favors. But it was backburnered in 2022, and will likely continue to be so in the first half of 2023.
Even in March, prior to the proposed rule’s release, National Association for Home Care & Hospice President William A. Dombi said that Choose Home’s path was facing roadblocks given all of the political priorities ahead of it in Washington, D.C., at the time.
“The speed bump we’re at right now is getting CBO to give the score,” Dombi said. “We have a number of parties waiting in the wings to move it forward in the event that the score comes out at a level that’s manageable.”
In 2023, a lot of shelves would have to be cleared – both in D.C. and in the home health industry – in order for Choose Home to gain the level of focus needed to push it through.
A new face on the public market
In early February, I laid out my home care predictions for the coming year as well.
I specifically predicted that by year’s end there would be another home care company on the public market. Enhabit Inc. (NYSE: EHAB) spun off from Encompass Health, but it is predominantly a medical home health and hospice company.
There was no true non-medical care company that filed for an initial public offering, however.
Specifically, I had my eye on Help at Home, the private-equity backed, Medicaid-based personal care provider. The Chicago-based company has been growing rapidly and has an almost entirely new executive team. It has all of the characteristics that a company with IPO aspirations would have.
It still made what I considered one of the biggest transactions of the year when it entered New York in April. Through that one push, it added over 10,000 clients, 11,000 workers and one of its most dense state footprints.
I asked Help at Home President Tim O’Rourke at the time whether this was the next step to filing for an IPO, which he wouldn’t comment on. Four months into the year, my prediction felt like it was on the right track.
But it was not. Instead, the market took over – and tanked. Public home-based care companies struggled to hit earnings and rumors of new ones tapered off.
Even BrightSpring Health Services, which had filed an IPO in October of 2021, quietly reneged on its public intentions in November through an S-1 filing.
For now, home health and hospice companies still dominate the public market from a home- and community-based care perspective. Still, I would not be surprised if a personal care company – especially one with a wide reach through Medicaid – changed that in the next year.
Value-based care proliferation
Value-based care and risk-based contracting was supposed to take off in 2022. I guess this is a matter of the definition of “taking off,” but home-based care providers have still struggled to make meaningfully inroads when it comes to value-based care driving revenue.
“I think value-based care has passed the tipping point,” Dr. Marc Rothman, the chief medical officer of Signify Health, told me Thursday. “I think it’s here to stay. I think you’re seeing more providers just finally accepting that they have to take downside risk. And you’ve got lots more organizations forming to help enable those things.”
Signify Health’s (NYSE: SGFY) value-based care capabilities are partly responsible for CVS Health (NYSE: CVS) agreeing to acquire it for $8 billion earlier this year.
And perhaps he’s correct that providers are just realizing this now.
There was a lot of lip service being paid to value-based care and taking risk in 2022. There was the same in 2021. It will be interesting if in 2023 value-based care finally starts proliferating in a real way in home care and home health care.
For now, it still represents a very small portion of revenue for providers. There are trailblazers, for sure. There’s the Minnesota-based Lifespark, the Virginia-based Care Advantage and a bevy of home health providers that are dipping their toes in with Medicare Advantage (MA) plans and others.
But there’s still not much downside risk being taken. Home health providers will be a part of the Home Health Value-Based Purchasing Model (HHVBP) in 2023, of course. And perhaps that will be a catalyst for more involvement in pay-for-performance models elsewhere.
It’s important to note that most of health care remains locked into fee for service. According to a Health Care Payment Learning & Action Network (LAN) study, nearly 40% of health care payments made in 2020 were exclusively fee for service, while 20% of health care payments were fee for service tied to quality or a measure of value.
To say value-based care “took off” in 2022, however, would be an over exaggeration at best.