The COVID-19 pandemic rapidly accelerated the shift of patient care to the home. Today, home health providers are playing an increasingly important role in care delivery across the U.S., providing at-home services aimed at minimizing patient hospitalizations and re-admissions, while providing the level of comfort and sociability that patients and their families want in the home during care delivery and recovery. The rise in healthcare consumerism, increasing healthcare costs, and the emergence of new technologies – particularly the growth in virtual care capabilities – have all driven stakeholders to rethink the possibilities of care in the home in a post-pandemic world. Home health providers are at the forefront of this evolution, offering a greater breadth of services than ever before, while aiming to deliver the highest quality of care and patient outcomes. This blog highlights some of the emerging trends in home health, including the growing importance of personal care services and the expansion of services in the overall home health ecosystem. We also share perspectives about two important operational areas impacting home health providers: labor and technological advancements.
The Rise of Personal Care Services
In-home personal care, also referred to as companion care, helps patients of all ages and varying acuity levels live safely and comfortably within their own home. Personal care services cover a wide range of living tasks, including bathing, dressing, and grooming; proper administration of these services has shown to reduce gaps in care and prevent adverse clinical health events. Currently, the market for personal care services remains incredibly fragmented with no single provider accounting for more than 1% of the market. Due to the increasing cost and complexity of care delivery and rising Managed Care Organization (MCO) participation, large personal care providers have a major opportunity to improve home care and to grow both organically and through strategic M&A. Another growth lever for personal care services exists within Medicare Advantage (MA) as more plans are beginning to offer personal care reimbursement resulting from value-based care arrangements. Between 2020 and 2022, there was a 92% annual increase in MA plans offering in-home personal care support services, showing that health plans are increasingly cognizant of patient preferences and the shift to at-home care. MA plans are currently covering personal care through two avenues: a carve-in to the existing plan, or as a part of bundled payments for a variety of post-acute services. In both cases, many personal care providers continually meet select quality measures tied to clinical outcomes, including fall occurrence rates, medication error rates, and emergency room visit / hospital readmission rates. As we continue to see patient preferences and new reimbursement models prevail, personal care services providers are poised for accelerated growth.
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Expansion of the Home Health Ecosystem
Recently, the home health ecosystem has evolved to provide an array of services more effectively, including skilled nursing (SNF at Home), nutrition management, and non-emergency transportation (NEMT). On top of providing a more convenient and comfortable care setting for patients, research has indicated that shifting care to the home will improve outcomes and reduce costs for providers. In order to facilitate this change, home health providers need to understand which patient populations can be best be served at home, and how treatment and care logistics need to be adjusted to accommodate for the new setting.
SNFs at Home
One major component of the home health ecosystem is a new care delivery model known as SNF at home, which became more prevalent during COVID-19 when more patients began receiving care in their homes opposed to traditional Skilled Nursing Facilities (SNF). This model combines an array of services and works to treat higher acuity patients in the home instead of an SNF. Notably, this model helps eliminate short stays in an SNF setting, a major driver of higher costs for health systems, and brings more complex services to a patients home, including respiratory treatments, labs, imaging as well as other common personal care and therapy services. While the success of home health and skilled nursing providers could depend on certain legislation, notably the Choose Home Care Act, many players are continuing to make a big bet on Medicare beneficiaries and hospice eligible individuals; if higher-acuity care can be adequately provided in a patient’s home, patient preferences and lower costs for health systems will lead to massive growth for leaders in the space.
Non-Emergency Medical Transportation
Given the aging population in the United States - defined as 65-and-over - is expected to nearly double by 2050, improving the logistics supporting the continued transition of care to the home is a top priority. Consolidation in the NEMT space has helped this, with many large post-acute care providers offering services across home health, hospice, palliative care, and personal care. Going forward, non-emergency medical transportation providers will be able to centralize operations and improve care logistics related to home health.
Nutrition
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2019 study published by the Journal of Parenteral and Enteral Nutrition found that both hospital readmission rates and costs were greatly reduced as a result of comprehensive nutrition management programs carried out in patients’ homes, another major service offering growing within the home health ecosystem. Being able to detect and treat malnutrition can be a challenge, but continuous monitoring and nutrition-related care within a patient’s home can lead to a faster healing process and lower future cost for health systems.
Other Social Determinants of Health
Social determinants of health remain a noteworthy factor in the shift to home health. Studies have shown that home-health patients, particularly seniors, need access to information, transportation, and social opportunities to support wellness and reduce hospitalizations. In areas where socioeconomic factors create barriers to home health, seniors may experience a decrease in overall health and a higher rate of hospital admission rates. Creating equal access to the broad ecosystem of home health services will be challenging but important for health plans and providers alike.
Noteworthy Operational Themes in Home Health
As the home health industry continues to evolve, it's also important to consider the impact of two important operational areas, namely labor and technology. These two areas have significant impact across the home ecosystem and each area presents both headwinds and tailwinds in the coming years.
Labor Shortages
While labor shortages have always existed within the home health ecosystem, increased adoption for these services has exacerbated the issue. The demand for home health services at all acuity levels spiked during the pandemic as lockdowns frightened elderly people out of nursing homes. As more of this population began demanding care in a home setting, low wages due to outdated reimbursement models and new unemployment benefits caused severe staffing shortages. Home health aides have historically earned lower wages and when the U.S. government started offering unemployment benefits, workers had little incentive to stay at their job. Additionally, the work associated with being a home health provider became much more strenuous; patient COVID-19 infections caused longer hours, as much as 25% weekly hour increases according to some workers, and a lack of critical medical supplies inhibited home health aides from being able to adequately provide care. While these issues persisted through much of 2022, staffing shortages throughout the healthcare system are beginning to stabilize. While home health sector can expect marginal improvements in staffing shortages in 2023, the success of many provider groups will depend on their ability to offer adequate benefits and incentives to employees and the government pushing forward legislation surrounding home health reimbursement models. Home health aides are starting to see tangible reimbursement expansion as of late, specifically in the southeastern region of the U.S. Many new Medicaid- and Medicare-based arrangements now include higher rates and value-based care initiatives which will act as a strong tailwind for players in home health.
New and Innovative Technologies and Solutions
Advancements in healthcare technology are equipping providers to capture data from a larger pool of patients and measure acuity in real-time. As a result, these technologies are becoming a foundational component in the healthcare industry as the evolution from fee-for-service into value-based care continues to take shape.
- Companies like Medalogix use data-driven solutions to measure the likelihood of hospital admission, medication adherence and other events that affect the care process. By leveraging technology to help providers intervene at the appropriate time, the cost saving impact on the industry occurs at multiple levels.
- There has also been growth in home health benefits management space, notably for Professional Health Care Network (PHCN), which partners with major health systems to manage the cost of care for post-acute services. PHCN, and other companies that act as an intermediary within the home health ecosystem have shown that delegating functions like network management, utilization tracking and claims management to a third party can lead to care gap closure and lower costs.
While many technologies are designed to ease information aggregation, sharing, and analytics for constituents in the healthcare ecosystem, there have also been numerous new developments related to patient engagement. Such engagement technologies are bringing patients closer to the care process and aligning all parties to push positive clinical outcomes. We expect to see continued growth in innovative technologies and solutions that improve the care delivery process and lower costs.
TripleTree’s Perspective
The home health industry is poised to gain significant traction in the years ahead as it becomes an increasingly viable alternative to facility-based treatment. Resulting from a convergence of healthcare trends (healthcare consumerism, increasing costs, aging population, post-pandemic preferences) and home health-specific tailwinds and realities (personal care, expanding ecosystem of services, labor shortages, and technology) home health providers have a growing opportunity to drive positive outcomes for patients, providers, and payers alike.