Home-Based Care Providers Scramble To Find The ‘Right’ Health Plan, Health System Partners

Home-based care providers hungry for value-based care arrangements have recently been disillusioned by the process of trying to find those arrangements. While they’ve been told value-based care is the way to go, they often end up finding that health systems and payers aren’t as willing to meet them in the middle.

Enhabit Inc. (NYSE: EHAB) CEO Barb Jacobsmeyer has mentioned this on multiple occasions. Medicare Advantage (MA) payers, when pressed on the idea of a value-based arrangement, generally aren’t willing or able to make agreements with home health providers.

“While I feel they understand the value proposition for home health, it is sometimes difficult for them to get past the unit cost of home health,” she said.

Lifespark COO Matt Kinne has noticed the same pattern with certain health systems. While his company has gone all in on risk- and value-based care, many of those health systems seem to be falling back on the fee-for-service operating model.

“I’m losing faith, because I just got done having breakfast and lunch with my friends in the health systems who were saying, ‘We’ve taken [population] health out of our nomenclature, and we’re doubling down on fee for service,” Kinne said Wednesday at the CONTINUUM conference.

Value-based care is hard, and it is also risky. It’s meant to be that way.

But home-based care providers believe that’s where they can be rewarded for their actual worth. Quality care in the home, after all, leads to better outcomes and significant cost savings.

There’s the Home Health Value-Based Purchasing (HHVBP) Model, but that is still within the confines of traditional Medicare. To expand their horizons, providers need partners to truly go in deep on value-based care.

That’s the topic of this week’s exclusive, members-only HHCN+ Update.

Value-based care stagnation

Based in Minnesota, Lifespark provides home health, home care, home-based primary care, urgent care, senior living and other services to older adults. As mentioned above, the company has been all in on value- and risk-based care for years.

At the turn of the decade, value-based care – as opposed to volume-based care – was all the rage. To a certain extent, it still is. But after COVID-19 subsided, Kinne has seen more health care providers and payers throwing their hands up and going back to the old way of doing things.

That’s bad news for home-based care providers. Many of the contemporary home health issues – and namely capacity and payment – can be solved with value-based care models, he believes.

“I really believe that capitation will set us free as an industry,” Kinne said. “We have too many inherent conflicts in these very narrow programs and solutions. CMMI is very well intended, we’ve participated in some of those models. But we need to start to think about the people that we’re serving in that tsunami of older adults over the next 20 years, and think about serving them in a longitudinally, fully capitated way.”

Lifespark still does have plenty of buy in. For instance, it is backed financially by Minnesota health plans.

The company has zeroed in on the seniors that make up the top quartile of spending for health plans. Caring for them with an array of home-based care services, Lifespark has been able to reduce spending – a goal many other home-based care organizations think they could achieve too.

If they are given the chance, that is.

“The numbers are pretty clear that the top quartile is spending more than 60% of the total medical loss ratio,” Kinne said. “So we’ve found ourselves narrowing our focus from a fully diversified population, to really trying to apply our resources and our assets to that top quartile of people that are at rising risk, and certainly the typical very complex health patients.”

For home health providers specifically, the ability to prove out value could save them. Traditional Medicare payment has been cut for three years straight, and MA penetration is continuing into 2025, when an administration that is likely to be friendlier to plans will take helm.

Per-vist, subpar rates from MA plans just won’t cut it anymore for organizations with squeezed margins. But exiting plan networks also hurts providers who need to be reliable referral partners to health systems.

“We’ve got a lot of inertia pushing against us,” Kinne said.

Reason for hope

Kinne was speaking on a CONTINUUM panel with Denise Keefe, the SVP of continuing health at Advocate Health, and Danny Metzger-Traber, the VP of strategic business operations at Mass General Brigham (MGB) Healthcare at Home.

Advocate Health and MGB appear to be bucking the concerning trend that Kinne noted.

“I think we’re moving in that direction,” Metzger-Traber said at CONTINUUM. “Where I hope we move is in the direction of having more of that connective tissue of capitation that allows for the aligning of incentives. It’s all just facilitated much better when we have those aligned incentives and when we’re rowing in the same direction.”

MGB Healthcare at Home has a wide variety of home-based care initiatives, including home health care and a hospital-at-home program.

On its end, the system is actively looking to care for more people in the home. Capacity is an issue, and there’s not a ton of opportunity to expand through brick-and-mortar means. Thus, expansion has to come through in-home services.

“We’re thinking about those patient populations that are real sticking points for us, and how we get more creative about pathways for those folks to go home, to free up that capacity,” Metzger-Traber said.

Keefe and Metzger-Traber both emphasized that their health systems are bought in on the idea of “home first.” That, Kinne said, “gave him hope.”

“I think care in the home right now is center stage,” Keefe said. “And we’re thinking about our opportunity to really make that work for the health system, in different ways than in the past.”

Ultimately, there are health plans that believe in value-based, home-based care. I’ve written in the past that these plans have an advantage to gain by treating their home-based care partners well.

The same goes for health systems, like MGB and Advocate Health.

In the end, providers will find the process of looking for the right partners frustrating. But if they look close enough, those right partners do exist.

“Within the last five years, MGB has definitely made a commitment to home first,” Metzger-Traber said. “Our CEO likes to say, ‘Whenever we’re evaluating these service lines, when we’re looking at how we’re delivering care for our patients, we want to have the lens of what could be what can be done at home as that first step.’”