Care in the home setting: “The New Frontier for Healthcare” - How will it impact the other stakeholders?

Providing care in the home setting is the new frontier of healthcare. All signs point to this current trend to not be a short-term fad, but rather a long-term sustainable direction.

A result of advances in science and technology is the increased ability to diagnose, monitor and treat patients in a setting that is not only lower in cost, but also less susceptible to infections and in many cases resulting in better outcomes for the patient.

As I have noted in prior blogs, the key interrelated forces that are causing the disruption in healthcare we see today, and will continue to do so in the future, are the following:

 These four interrelated forces are the reasons why care in the home-setting is not only the new frontier for healthcare, but also a long-term sustainable one.

ACTIVE PURCHASERS OF HEALTHCARE SERVICES – The sustainable funding source for care in the home setting

Care provided in the home setting needs to have a sustainable funding source, and Active Purchasers of healthcare services are playing that role.

Active Purchasers of healthcare services such as Medicare Advantage and Medicaid Managed Care/PACE Plans, self-insured employers, commercial payers (health insurance companies, etc.), and consumers are all pushing towards care in the home setting as the value proposition and they are willing to pay for it.

The push towards care in the home setting impacts people across all economic and demographic classes.

This trend toward care in the home setting can also address a number of societal priorities when it is focuses on the poor, especially the poor elderly, and it is combined with focused initiatives to address the social determinants of health.

As noted in prior blogs, Medicaid Managed Care Plans and PACE programs play a key role in addressing the integrated needs of the poor elderly.

PACE programs, for example, as noted by Debra Lipman in her Health Affairs article plays an especially focused role in addressing the overall needs of the poor elderly in the home setting.

Per Debra Lipman, “PACE is in effect a daycare program for the elderly, with providers receiving all-inclusive payments for care. With capitated payments from Medicare and Medicaid (if approved by states), PACE programs assume financial risk and provide comprehensive social, medical, and nursing services.”

“Services include adult day care, transportation to and from the center, food programs, home care, primary care, social services, and other preventive services, all at a lower cost than institutionalization.”

Active Purchasers and risk-based payment methodologies

Active Purchasers are also developing risk-based payment methodologies such as bundled payments that incent hospitals to bypass institutional skilled nursing facilities and go directly to the home setting.

This trend is increasing the acuity of the care being provided in the home setting as it relates to rehabilitation services and home care in these situations is evolving to more of an “intensive skilled home care” service. The use of intensive home health care as a substitute for costly, facility based interventions, particularly for frailer or less mobile patients, is increasing, especially for those who tended to have high utilization of services.

Also, as capitated payments become more common, incentives will be built in to direct care to the lowest cost setting as long as quality is not comprised. The home setting not only can be a low cost alternative to institutional care, it can also potentially result in better quality outcomes for a number of reasons.

The patient in the home setting is less susceptible to infections vs. an institutional setting. The ability to involve the patient’s support network (family and friends) in their care, along with healthcare professionals, is a value-added proposition. Patient compliance, including drug medication adherence, is many times better in a home setting.

SOCIAL DETERMINANTS OF HEALTH/DEMOGRAPHIC CHANGES – A healthy home setting

Health status is dependent on more than just addressing medical and medication needs.

The combination of societal factors falling under the definition of social determinants of health as well as the aging of Americans has created an increased focus on the home setting.

As I noted in a prior blog, no social determinant has a greater impact on the elderly than housing. A healthy home setting can have a major positive impact on a senior’s medical and mental health and their overall quality of life. 

While “living in place” is the new mantra in healthcare it does not mean “abandoned in place.” The home setting cannot be a structure that isolates the senior from the rest of the community. It needs to be both a healthy setting as well as the home base for an important member of our community.

While we are beginning to better address the medical and medication needs of the elderly in the home setting, we still need to address the social determinants of health that impact them on a daily basis and which would also contribute to a “healthy home.” Examples include: isolation, depression, nutrition and exercise needs, safety, and the physical home setting itself (leaking roofs, energy efficiencies, and safety repairs, especially to prevent falls, i.e. stair railings, steps, etc.).

Community-based organizations also play a key role in addressing the social determinants of health. These organizations can work directly with individuals in their homes and communities have demonstrated experience in addressing issues that are beyond the traditional reach of clinicians.

As noted in my prior blogs, Active Purchasers of healthcare services are increasingly paying for services, etc. that address social determinants of health. National and State health policy initiatives and funding are also being directed towards the development of “Community Hubs” to better coordinate services from multiple stakeholders (see blog titled "Reaching for the stars").

Advances in sciences and technology – Enabling care to be provided in the home setting

As discussed in prior blogs, there has been a bit of a “chicken and egg” phenomenon occurring regarding providing healthcare services in the home setting. 

Active Purchasers (public and private) are promoting healthcare services in the home setting directly or by means of risk/value-based payment methodologies as a cost saver and, as a result of advances in technology, there is now the ability to deliver, monitor and diagnose in the home setting.

Conversely, medical device, pharma/biotech and technology organizations are investing in services that allow for care to be provided in the home setting since they see it as a long-term source of profits because of sustainable funding from Active Purchasers.

Thanks to the explosion of mobile technology and applications for home and self-monitoring, funding sources to facilitate care being provided in the home setting will come from a variety of sources including private equity. Telemedicine will also fit in quite nicely with the overall focus on the home setting. 

Health policy at the state and national level – Supporting both the direct provision of care in the home setting, but also the “Living in place” mantra for our elderly

State Medicaid policy historically has focused on custodial care in the institutional setting. “Living in place” is now the new mantra in our society strongly supported by State Medicaid policy. 

This evolution came about based on a number of factors including the recognition of the high cost of institutional care, the desire of seniors to continue living in the home setting and the advances in technology that allow it to occur.

From a national health policy perspective, current and future changes to Medicare payment policies and risk/value-based reimbursement methodologies are incenting care to be provided in the lowest cost setting without comprising care. This again will create a boom for care being provided in the home setting.

Also, from a national health policy perspective, recent changes in regulations are allowing Medicare Advantage plans to pay for services that would fall under the category of social determinants of health.

What does the home-care revolution mean for the healthcare stakeholders?

Hospitals:

Historically, many of these "new" services that will be provided in the home setting were performed by hospitals and their related entities.

Forward-thinking hospitals and hospital systems must aggressively find ways to penetrate this market either directly or through collaborative relationships.

The home care market, just like the outpatient services market, lends itself to more of a competitive environment. Unlike hospital inpatient services, both the outpatient arena and especially the home setting, can be served by a variety of competitors because of the relatively lower entry costs.

The home setting, as noted previously, is growing because it is more of a “valued” proposition vs. care provided in the institutional setting. Consequently, hospitals looking to enter into this market need to recognize there will be both more competitors, but also a greater demand for value.

Medical Device/Biotech Sectors

What does all of this mean to the medical device and biotech sectors and other stakeholders along the supply-chain?

The medical device and biotech sectors have long been wedded to the hospital world especially from an inpatient perspective. With the decrease in hospital inpatient utilization and the increase in both outpatient services and care being provided in the home setting, medical device and biotech organizations need to expand their focus.

As it relates to the home setting, this arena provides these sectors an opportunity for new revenue sources as well as new potential partners (including Active Purchasers). Innovation and value will be the keys to success in this new arena and, like hospitals, they will be facing a wide variety of competitors.

Long Term Care Organizations (LTC)

LTC organizations have been hit especially hard by the evolution to the home setting. 

Institutional skilled nursing historically has been a major source of revenue to the LTC sector as well as the provision of custodial care in Nursing Home setting.

Both of these lines of business have been financially damaged by the growth of care in the home setting and the trend towards “aging at home.”

LTC post-acute providers are looking to start or grow their home health presence independently or through some form of collaboration. Also, depending upon the local market, they are investing in assisted living or independent living facilities.

Pharma/Pharmacy Dispensing

Studies have shown that drug compliance in the home setting is better received and more sustainable. Health education initiatives can be better received in the home setting and the broader support network of family and friends increases the likelihood of compliance. That support network working in tandem with health professionals and innovative technologies many times has a positive impact on the overall health of the patient.

Social service agencies/community mental health

As noted previously in this blog, the home setting provides access to a broad range of social service providers and community mental health agencies to enable them to address the multi-faceted needs of the home resident.

These organizations and individuals are and will be playing a key role in this new world of healthcare.

CONCLUDING COMMENTS:

The evolution of care to the home setting will provide both challenges and opportunities to the healthcare stakeholders. As noted in this blog, this evolution is not a short-term fad, but rather a long-term trend. 

The evolution will create new and creative business opportunities to those stakeholders that have an entrepreneurial mindset. Given the advances in technology and science, the sky is the limit for entrepreneurial ventures in this new healthcare sandbox.

Competitors will come in all forms, from the small local home health agency to major national players, such as Amazon, leveraging their resources, reputation and platform to create their own form of disruption.

There will be winners and losers in this new world of healthcare. The sooner you, your organization and sector embrace this new world of healthcare the greater the chance you will come out a winner.

Thomas Campanella is the director of the Health Care MBA and an associate professor of health economics at Baldwin Wallace University near Cleveland, Ohio.

If you are interested in receiving a monthly summary of all of my healthcare blogs, you can respond to me on LinkedIn or e-mail Tom Campanella ([email protected]) with your contact information.

Source of pictures: pixabay.com & pexels.com