The Transcend Top Six: Three Ideas That Shaped Home Care Growth in 2023, and Three That Will Shape 2024

One thing we hear over and over at Transcend from the leaders we work with is how hard it can be to stay on top of such a dynamic and changing environment. The day-to-day business of providing excellent home-based care is a full-time job in and of itself. How can a busy leader ensure patients and clients get the care they need and also know what’s coming from CMS, payers, or how their competition may be changing. What about staffing? To paraphrase 538 founder and polling guru Nate Silver, how do leaders separate the signal from the noise?

Introducing the Transcend Top Six.

2024 is going to be another big year in home-based care. The Transcend Top Six is an encapsulation of where we are and where the Transcend team expects we’ll go. This isn’t a whitepaper or deep dive, but a way to help our community and partners keep their eye on the ball as we head into a busy year. (But don’t worry, we’re still hard at work on the Transcend insights and research that fuels our data-driven approaches to census growth, change management and workforce issues.)

2023: The Three Big Moves That Shaped the Last 12 Months

1. Recruitment and Retention Stabilized, Painfully. Nobody in home-based care will ever have enough clinicians or professionals to care for all patients that need service, but the dark days of 2022 have lessened somewhat and workforce participation has stabilized. Of course, it came at a cost – inflation and rising wages challenged many providers. But investments in recruitment, onboarding and company culture are paying off. While finding qualified professionals will always be a structural challenge in U.S. healthcare, the providers we work with are taking a bit of a deep breath and have been able to focus on optimization and growth.
2. M&A Slowed, But It Sure Didn’t Stop. While acquisitions of small and mid-sized agencies slowed thanks in part to Mr. Jerome Powell and his friends at the Fed, it didn’t grind to a complete halt. We continued to see legacy community providers announce partnerships and affiliations from the East Coast to the West (and we’re supporting communications packages for a few in the works here at Transcend as we speak). Of course, the biggest news was probably the soap opera style will-they-or-won’t-they dealmaking between Amedisys, Option Care and Optum/United. When all was said and done, Optum won the day and if the FTC approves, will own a 10% market share of home health and hospice in the United States after having bought LHC Group and Amedisys. The message was clear: Stakeholders are cautious, but size and economies of scale will always matter.
3. The Rate of Change Intensified. From CMS initiatives and rate cuts to new programs from CMMI and changes within the community itself, the pace of changes to the status quo accelerated in 2023. We saw the body blows of home health rate cuts and Medicare Advantage headaches. Home care had to deal with a patchwork of regulations for reimbursement and quality. Hospice dealt with significant image problems. It seems like not a week went by without the distraction of a new regulation or challenge. Hospice saw a new special focus program as well as 36-month limitations on the sale of a license. Home health took CMS to court, and some home care providers promised to exit certain states if the proposed Medicaid 80/20 rule went into effect. That wasn’t all, however. We saw news of the NAHC/NHPCO merger, the expansion of the Home Health Value-Based Purchasing program, the VBID Hospice program, and the GUIDE model in 2023 as well. Status quo? More like status whoa.

2024: A Not-So-Crystal-Clear Crystal Ball

So, what does the year ahead hold? We may be the Transcend Strategy Group, but that doesn’t mean we can transcend all time and space (sadly). However, based on our experience and the conversations we’ve had with leaders across the field, we’re sure of a few things headed into the year:

4. Change Ain’t Done. If we felt like changes came fast and furious in 2023, it may look quaint in retrospect. With inflation stabilizing, interest rates may come down and investors will come back off the sidelines. At least two of the larger national providers are exploring sales in 2024, and one has just filed for an IPO. CMS has indicated that they are considering further changes to home-based care benefits. Medicare Advantage plans continue their meteoric growth (with enhanced scrutiny as well). Transcend believes home care organizations should prepare by investing in codified change management resources to support staff through these twists and turns. Learning a new electronic health record or regulatory reporting requirement as a home-based clinician is hard enough under easy circumstances. Investing in change management support will pay tangible dividends in retention and quality scores.
5. Savvy Providers Will See Steady and Sustainable Growth. Look, the demographics are clear: As the Baby Boomer generation ages, they’ll need more and more of the services home care organizations can provide. This doesn’t mean durable census growth is a given, but a strategic and diligent organization is ready to see healthy and compliant increases in the number of patients they have the ability to serve. Thoughtful and differentiated marketing, branding and sales approaches work well regardless of size, affiliation or tax status. And if you need some help, we’re always here to help you transcend your goals.
6. Service Line Diversification and a Differentiated Brand Are Paths to Sustainable Operations. Value-based care is changing the game – programs can no longer style their operations around providing a single discreet benefit or rely on a fee-for-service mentality. How can we provide services longitudinally for a patient? How can we apply our expertise at person-centered care in other settings? Putting your organization’s eggs in the basket of only one service line can be risky – home health’s 2.89% rate cut is a great example from 2023. Similarly, a strong brand that helps consumers and referral sources understand who you are and why they should engage with you will help you stand out from an increasingly crowded field. We don’t want to downplay the magnitude of either undertaking – they’re huge investments. However, Transcend’s experience has consistently shown that organizations that take these bold steps consistently see significant returns on investment.

So, there you have it: The Transcend Top Six. Should be an easy year ahead, eh?

As always, we’re here to partner with you. Maybe you need a checkup on your organizational health. Maybe you need change management and communications support for a merger. Or it could be that you’ve outgrown your original brand and need a way to move beyond it while honoring your roots. Perhaps your sales and community liaison teams are dropping off mountains of muffins but getting no referrals. Whatever your marketing, sales, employee engagement or change management needs are, Transcend is here to start a conversation. Drop us a line at hello@transcend-strategy.com, and have a happy new year.