Insurers Should Slow Down To Speed Up Home Health Integration

Home health is one of the fastest-growing areas of healthcare. There are already more than 11,000 home health agencies serving nearly five million people each year, and the Department of Labor anticipates a further 25% increase in home health employment between 2021 and 2031.

Fueling this demand is a rapidly aging population with multiple chronic conditions and daily functioning limitations. At the same time, next-generation digital health tools such as remote patient monitoring devices are making it possible to deliver a higher level of care in the home than ever before.

Home health seems like fertile ground for value-based care to take root. Health plans save money on ED visits, acute care, and long-term care; providers get support with extending preventive and acute care outside the walls of the clinic; and patients have better experiences by staying comfortably in their own homes. They are also less likely to be readmitted to the hospital.

It’s no wonder, then, that some of the nation’s largest payors have been racing to acquire home health agencies and paying billions of dollars to expand their home health portfolios and accelerate the transition to value-based care.

But often these acquisitions come with a catch. Making the shift to a value-based mentality isn’t easy for anyone, especially not for a service line that has been historically built on a fee-for-service foundation. A payor’s goal for value-based care is to stay ahead of the need to deliver services, thereby reducing expenses. A home health agency has the opposite incentive since its primary source of revenue is delivering as many services to as many people as possible.

Reconciling these two conflicting drivers isn’t as easy as signing the paperwork and flipping the “on” switch. It takes a concerted effort to reconcile differing financial outlooks, create alignment across cultures, and implement seamless workflows to coordinate care.

Bring Everyone to the Table

A multi-billion-dollar acquisition naturally comes with its fair share of legal and financial due diligence, but clinical leaders and change management experts must also understand exactly what they’re getting into when bringing a new acquisition into the fold.

No two home health agencies are exactly alike, and there are even variations from branch to branch within a single organization. They tend to be unique in their workflows, their trouble spots, and their communication style. It takes time and effort to develop a full and actionable understanding of all these factors — sometimes as much as six to eight months. Don’t expect to achieve an instant, ambitious return on investment during this learning period. The initial phase of realigning compensation from a per-patient basis to a value-based model may lead to short-term losses — something that leaders must be prepared to caution their investors and shareholders about.

Minimizing the red ink will require a strong focus on listening, observing, and building relationships between leadership teams at the executive and clinical levels.

Bring everyone to the table, including nurses, physicians, nurse practitioners; physical and occupational therapists; social workers; and personal health aides, to gather their insights into how they perform their jobs now and what they would like to see in the future.

Invest in people and processes as the priority

Home health agencies typically have high turnover rates, averaging 21% of the workforce each year. It’s expensive and time-consuming to train a fifth of a workforce from scratch each year while recruiting enough diversely skilled individuals to accomplish everything that needs to be done for patients.

Remember that staff members are performing a challenging job in an era of widespread worker burnout. Pressure to meet volume goals, alongside the unique safety and quality challenges presented in the home health environment, often makes their tasks even harder than they have to be.

Consider how to optimize electronic health records to surface easily consumable, timely, and relevant information for each patient at the point of care in a way that makes sense to different user personas. Ensure that robust health information exchange connections are in place to foster communication between primary care providers, home health workers, and the health plan — all of whom bear responsibility for patient experiences, costs, and outcomes. And start to integrate predictive models whenever possible to get in front of rising risks and allocate scarce resources appropriately.

Successful change management requires ongoing education and a commitment to continuous improvement, so be patient but persistent when introducing new technologies and workflows. For example, think about creating an “innovation lab” in a single region with clearly identified opportunities for improvement, then roll out successful new strategies to the rest of the network in a measured, organized manner.

Break down silos

Payors acquire home health agencies because they want quick access to a fully formed organization with an existing workforce instead of having to build up these capabilities from scratch.

But plan members with complex health needs require more services than a traditional home health agency can provide on its own. More than 80% of people who use home health services have more than three chronic diseases, and they are more likely to live alone, report functional limitations, and have incomes close to the federal poverty level compared to other Medicare beneficiaries, according to Medicare data.

These people will often need specialty care, behavioral and mental healthcare, pharmacy services, nutrition and transportation services, durable medical equipment, and other medical supplies to maximize their quality of life.

Payors don’t need to fully acquire dozens of specialty companies, but they do need to search out strong relationships with entities that can check off each of the boxes. Prioritizing partners that can leverage digital tools to provide many of these complementary services in the home setting is a convenient and cost-effective way to make the value-based care approach truly impactful for every health plan member.

With home health becoming ever more central to the way health plan members receive care, payors will start feeling pressure to bring agency resources on board in one way or another. Before jumping into the trend, leaders need to ensure that they understand what they’re getting into and have a workable plan for getting something out of it again.

By starting with a deliberate discovery process, implementing improved workflow processes, and prioritizing a team-based approach to home care, health plans can provide better care for their members while achieving their value-based care goals.

To learn more contact Matthew Weinstock, Senior Editor, Health and Life Sciences.