Home-based care providers have an opportunity to differentiate themselves by honing in on what they’re great at.
A number of factors are transforming the environment in which home-based care providers operate: the rise of value-based care, regulatory scrutiny, reimbursement falling behind rising costs and staffing shortages.
Amid all of that, more than ever, providers need to sell their worth.
“Whether it’s value-based care, talking about diversifying risk or other factors, the opportunity to meaningfully differentiate an organization through the lens of its strengths is actually a tremendous opportunity for smaller providers to compete against larger ones,” Transcend Strategy Group President and CEO Stephanie Johnston told Home Health Care News.
In a new research report, Johnson and her colleagues outlined a number of potential strategies that providers can follow to be better equipped for change in home-based care.
It’s no longer enough for agencies to trust that high-quality care and word-of-mouth reputation alone will sustain their businesses, the report argues.
In order for agencies to thrive today and in the future, a strong value proposition to payers is a critical aspect of an agency’s business operation. In particular, having a diversified referral mix could be a core component for driving sustainability.
“Way too often — and still recently — we hear people tell us that they are still relying on a primary referral source to drive volume,” Johnston said. “Basic risk management will tell you that [strategy] is too risky for today’s care providers at home. They need to think about diversifying their referral mix.”
Johnston compared it to an investment portfolio. Logic would tell an investor not to go all in on one investment asset. Instead, one would manage risk across multiple assets.
“That’s exactly what home care providers should do,” Johnston said. “They should think about a referral portfolio that they’re managing that should include relationships with physicians, hospitals, SNFs and patients and families themselves.”
Relying on hospitals as a primary referral source, where highly acute patients are likely to come from, can create unwanted exposure when staffing becomes a problem, for instance.
From a staffing perspective, Transcend’s report also encourages providers to embrace family caregivers. Many providers, the report argues, are focusing on fighting for the same pieces of the pie.
By looking outside the box and welcoming family caregivers into the employee fold, the pie can be expanded.
“Patients and families are the greatest barrier or accelerator to access and utilization,” Johnston said. “Our research has shown time and time again — whether it’s serving patients and families, serving the nursing workforce or serving underserved populations — that perceptions of care that people experienced earlier in the continuum influence their utilization of home health and hospice care. Patients and families continue to play a significant role, and I think people are just starting to wake up to that because they played such a critical role during COVID.”
Embracing family caregivers can also lead to huge financial benefits.
“In our experience, organizations that actively engaged patients and families earlier experience a considerable return on investment,” Johnston said. “We’ve been tracking that ROI for the past 10 to 15 years, and the average rate of return is about $30 million, or 40 to 50 times what they’re usually investing in building those relationships.”
Prioritizing diversification — in all stages and levels of the business — will also let payers know that a provider is looking ahead to the future as opposed to doing things as they’ve always been done, Johnson argued.
“Organizations that can effectively represent the communities that they serve, whether that’s from an employment mix standpoint, patient and family mix standpoint, or a referral mix standpoint, are going to have more compelling and more holistic stories to tell payers about their ability to impact care in the communities they serve,” she said.