Home healthcare at the crossroads as market expands

Home healthcare is one of the fastest growing sectors in the U.S., reaching an estimated $100 billion this year. There are currently 10 to 12 million people receiving home healthcare, and those numbers are expected to increase dramatically. According to the U.S. Census Bureau, by 2050 the population aged 65 and older is projected to be almost 84 million people, almost double the estimated 43.1 million in 2012. And, a 2011 AARP survey found 90% of those over age 65 want to stay in their homes as long as possible, and even with an estimated 20% moving to nursing homes or assisted living, that still leaves 70% at home–approximately 35 million people. 

There has also been a shift from long-term nursing home care to in-home care in recent years. A 2015 Ernst & Young report found the number of nursing homes has shrunk by 350 over the past six years and in-home nursing programs have doubled since 2007, from 42 programs in 22 states to 84 programs in 29 states.

Data are backing up this shift. “Home Health Compare,” a CMS report, showed patient outcomes significantly improved after receiving home healthcare: Eighty-nine percent of wounds improved or healed, 67% had less pain, 64% had improved breathing, and 66% got better at bathing. Another CMS study showed patients who are discharged from the hospital and sent home for care, versus a nursing home or rehabilitation center, improve faster and save money–costs are $5,411 less than the overall average.

Yet, there are several challenges facing the industry. Perhaps the largest is the recent Supreme Court ruling that denied home care agencies a delay in adopting wage increases with required overtime for workers who provide “fellowship, care and protection to seniors and the disabled,” as previously reported in Healthcare Dive.  The rule goes into effect today.

The decision lifted a 1974 law, which many say skirted labor guidelines where workers were exempt from minimum wage and overtime. The National Association for Home Care & Hospice (NAHC) filed the lawsuit challenging the Labor Department’s authority. In response to the recent Supreme Court decision, NAHC’s vice president for law, William Dombi, told Healthcare Dive, “We are disappointed that the Chief Justice denied the stay request. That means the new rules will go into effect on October 13. It can be expected that the new rules will lead to problems for home care consumers, workers and government programs such as Medicaid.”

There are 1.33 million home healthcare workers as of September. The Bureau of Labor Statistics estimates by 2022 there will be 1.9 million home healthcare workers. Some experts say the new ruling will attract more qualified workers and raise the bar of quality care for those receiving home care.  Others, mostly home care agencies, say many seniors will no longer be able to afford home care with the higher wages.

This hinges on another challenge within home healthcare: Medicare has very restricted guidelines for its Home Health Prospective Payment System, which was first implemented in 2000. Patients must meet strict criteria to qualify for home healthcare and coverage is limited to 60-day episode payment rates. CMS updated the rates in 2013, creating a national standardized 60-day episode rate, a national per-visit rate, and outlier payments that address payments for episodes where the estimated cost exceeds the threshold amount. The AACA implemented a “Rural Add-on” to allow a 3% increase to payments for home health services provided in rural areas between 2010 and 2016.

New home-care programs show promise

CMS currently does not have a payment code for hospital-level outpatient care. It is funding a $10 million three-year study at Mount Sinai’s Icahn School of Medicine with 700 patients in New York City for its “Mobile Acute Team Care” (MATC) program. Patients with specific conditions presented in the emergency room will be given the option to be treated at home instead of the hospital. The hospital will work with community organizations to provide daily medical visits and arrange for lab tests, medication and equipment. The study results will be used to create a payment model for high-level acute home-based care for CMS to adopt and implement.

Mount Sinai’s program is based on Johns Hopkins University’s Hospital at Home program, which was developed and initiated by Dr. Bruce Leff, professor of medicine at Johns Hopkins. His initial study of 323 patients showed that home-treated patients reduced costs by 20% and had equal or better outcomes than hospital inpatients. Although patients were happy, payers weren’t because of the lack of a Medicare payment system to reimburse hospital level care at home, according to The New York Times. Medical Centers that have adopted this program include six VA centers and Presbyterian Health Services (Albuquerque, NM). 

However, Leff told The New York Times interest remains high. He said he has received calls from more than 100 system administrators looking to learn more about how to hospitalize patients in their homes. “My sense is that over time, hospitals will become places that you only go to get really specialized, really high-tech care.”

West Health, a nonprofit organization, is co-funding Geisinger Health’s Treatment at Home Option (TAHO) program, which will enroll 100 patients within a 20-mile radius of their Wyoming Valley Medical Center. This will incorporate the mobile paramedic pilot program at the hospital. The paramedic program involved three full-time paramedics, employed by the hospital, who treated 704 patients between March 2014 and May 2015. The team prevented 42 hospitalizations, 33 ED visits and 168 inpatient stays for the 704 patients receiving home health visits, according to The Wall Street Journal. And, among heart failure patients, hospital admissions and ED visits were reduced by 50%, while the rate of hospital re-admissions within 30 days fell 15%.

Dr. David Schoenwetter, emergency medical services medical director at Geisinger Wyoming Valley Medical Center in Wilkes-Barre, Pennsylvania, told Healthcare Dive the paramedic program is a “value-based initiative and does not fit well into the fee-for-service model.” He said the program has been the topic of various payer groups who fall into two camps: those who want a “widget-based model” and “the other group...who want a value-based system and maximize efficiency of resources to care for that population.” Dr. Schoenwetter explains it “depends on the mindset of other hospitals on how they would adapt a similar program.”

The TAHO program will incorporate the paramedic program with home health nurses and workers along with telemedicine for daily care, and will target those with chronic conditions treatable at home. “The real crux of our program is that it’s not forced into a diagnosis-based plan, which limits your ability to make clinical decisions. Our enrollment is very patient-focused. The only caveat, which is part of the grant, is that it is payer-specific, but not condition specific,” Schoenwetter said. He added TAHO is still under development but is anticipated to launch this November.

Denise Prince, system vice-president, value-based care and vice president, population health at Geisinger Health System, said, “As part of the [TAHO] research study, we’ll better understand and test new payment models that could be adopted in the future to support these types of programs that fall in between existing inpatient and outpatient categories.”

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Filed Under: Payer Hospital Administration
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