Smart Ways to Grow Your Continuum of Care
Many providers of home care have added new service lines since their agencies began. The logic has been solid – diversify offerings so the agency isn’t dependent on a single service, generate new income streams, engage with patients for more of their healthcare needs at different stages of life, and transition those patients along the agency’s continuum for long-term relationships.
The challenges of expanding a continuum of care can equal the opportunities. To name a few: Different services often require different disciplines, staffing already can be daunting for the existing service lines, and different services are subject to completely different payment models requiring a whole new understanding of how to maximize reimbursements.
So how should you go about growing your continuum of care? What are the right services to offer to meet needs in your market? Where and when do you introduce a new service line? What will the competition be like? Do you go it alone on the new service or share the risk/reward with a strategic partner in your region?
In our latest podcast episode, we talk with Rhonda Sanders, chief mission access officer for Empath Health in Florida. Empath Health has embraced a concept called “Full Life Care” offering a broad continuum with services for adults of all ages.
Take a few moments to hear Rhonda explain how Empath Health expanded from two established hospice organizations to a robust continuum that tends to retain patients and transition them as their needs change. You will find good advice if you’re considering an expansion of your service lines.
And you may want to give that option serious consideration. Because care in patients’ homes is poised only to grow for the foreseeable future.
Why home care services will continue to spark demand.
Healthcare consumerism continues to grow, with patients and families demanding choice in their personal care decisions. More and more, patients prefer to be at home as much as possible, even preferring to receive increasingly complex care there. According to a study reported by Health Leaders Media, 86 percent of adults now prefer post-acute care at home. A recent study by Stanford University School of Medicine showed that 80 percent of Americans prefer to die at home – a statistic that has held steady for decades. And who can blame people for wanting to stay at home, surrounded by the people and things they take comfort in. Fortunately, payers and many healthcare professional referrers increasingly support home care for the reasons below.
It’s no secret that much of our nation’s healthcare system is in crisis. As I was in the process of writing this blog post, CBS Evening News was featuring a weeklong series about the closings of hospitals across the country, especially in rural areas. Other sources cite these sobering statistics:
- About 41 percent of rural hospitals nationally operate at a negative margin.
- More than 20 percent of our nation’s rural hospitals, or 430 hospitals across 43 states, are near collapse.
- 113 rural hospitals across the country have closed.
With a decreasing number of hospitals, where are patients going to receive care – especially for serious illnesses?
Nursing homes are also dwindling in numbers nationally. In fact, LeadingAge reported that between 2015 and 2019, more than 500 nursing homes closed their doors. And that was before COVID further ravaged the nursing home system.
More and more, patients’ homes are becoming the only location where they can receive quality care without traveling a lot of miles.
As the saying goes, “Follow the money.” The most influential factor fueling the growth of home care is the cost savings it represents for payers. You may already have seen the results of a March 2023 report by NORC at the University of Chicago detailing an extensive study that showed:
- Medicare spending for those who received hospice care was $3.5 billion less than it would have been had they not received hospice care.
- In the last year of life, the total costs of care to Medicare for beneficiaries who used hospice was 3.1 percent lower than for beneficiaries who did not use hospice.
- Hospice is associated with lower Medicare end-of-life expenditures when hospice lengths of stay are longer than 10 days. In other words, earlier enrollment in hospice reduces Medicare spending even further.
- Hospice stays of six months or more result in savings for Medicare. For those who spent at least six months in hospice in the last year of their lives, spending was on average 11 percent lower than the adjusted spending of beneficiaries who did not use hospice.
Since about 90 percent of Medicare reimbursement is for “routine home care,” the bulk of these savings were delivered by caring for patients wherever they call home.
And the reduced costs extend well upstream from the final months of life. According to a report in 2020, the average cost per year for full-time care in a nursing home is in the range of $82,128 to $92,376. In addition, there will be other expenses for dementia, memory care or other special services offered.
Of course, payers are going to be seeking the best outcomes at the lowest cost. As Medicare Advantage and other managed care plans continue to gain acceptance and dominance as primary payers, it is becoming imperative to offer solutions that manage costs the most effectively. Part of that solution is in providing care at home instead of a more expensive facility.
In addition, adding services to expand your continuum of home care capabilities will enhance your appeal to becoming designated as a preferred provider by managed care plans. Most plans would rather contract with fewer, larger agencies that provide more services across a bigger geographic region than a greater number of smaller, limited agencies.
Need help in better defining your agency’s continuum of care – both now and for the future – and communicating its benefits to patients, families, referrers and payers? Transcend Strategy Group is eager to discuss your situation and share our insights. To begin the conversation, email me anytime at [email protected].