A new study from the on-demand physical therapy company Luna found that in-home outpatient PT models can reduce costs by 52% compared to traditional home health services for total knee and hip replacements.
The study — done in conjunction with the nonprofit hospital system Hoag Hospital — was conducted between 2021 and 2023. During that time, Hoag and Luna found that participating surgeons using Luna’s services reduced their home health utilization by 86%, resulting in decreased costs of $2,517 per case.
“Home health has a very important value,” Palak Shah, Luna’s co-founder and head of clinical services, told Home Health Care News. “They have lots of different services: physical therapy, occupational therapy, speech, nursing, etc. Whereas Luna primarily delivers physical therapy. What this allows you to understand is there are smaller margins and less pressure on cost savings and resource constraints.”
Home health care has built a reputation as a high-quality and low-cost setting, with hip and knee patients traditionally a core part of an agency’s business. Luna and Hoag’s findings could suggest a larger role for outpatient PT models in the future, which could take some hip and knee patients away from the home health field.
On the flip side, companies like Luna taking on more traditional home health cases could free up agencies struggling with staffing-capacity limitations.
The Rocklin, California-based Luna provides outpatient physical therapy in the home setting. Through the company’s platform, patients are matched with a physical therapist at the time and location of their choosing.
According to data from Hoag Orthopedic Institute (HOI), traditional home health PT for post-surgical rehabilitation in 2021 accounted for 10.4% of the total episode cost for the health network.
Overutilization of traditional home health poses a challenge in reducing post-surgical costs, especially as demand for those services continues to rise, the study argues.
A solution to those rising costs, Shah said, is the in-home outpatient model, which is billed under standard outpatient rates but keeps the same high quality of care.
According to HOI, patients who initiate outpatient physical therapy immediately after surgery complete their care an average of 20 days sooner compared to patients who started with home health.
However, that process includes patients going to and from an outpatient clinic, which can be burdensome and inconvenient for patients.
That’s where Luna comes in. Shah said one of the main focuses of the company is to help organizations like HOI — and the several home health partners it already has — in identifying which patients would benefit from receiving care in the home.
Once it does that, it leverages its platform to offer in-home care at a reduced price.
“We’re partnering with several of these home health agencies so that they can reallocate their resources to areas where there is a higher need and higher reimbursement possibilities,” Shah said. “Being able to identify a patient population that is only needing physical therapy services is truly how you can focus. Innovative agencies that want to stay ahead of the curve and get even with these cost pressures are partnering with Luna.”
Among the other highlights of the study, HOI and Luna found that patients that received in-home outpatient PT completed 4.3 visits less compared to the home health cohort. They also had a 28% lower hospital readmission rate, according to the study.