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THE ROAD MAP: Key Strategies for Creating the Future of Home Care and Hospice


Simione Healthcare Consultants and Lincoln Healthcare Group's Home Care 100 interviewed 45 Home Care and Hospice executives, and surveyed over 100 more, between June-October 2014. The following represents the results of that research, wherein they identified the key strategies home care and hospice organizations should employ now to ensure a successful future. These results were shared in February at the Home Care 100 Leadership and Strategy Conference, where Simione's William J. Simione III, Principal, served as a leadership panelist.


In this era of hyper-accountability in health care, home care and hospice providers are anticipating a long journey in the quest for more streamlined operations and improved quality.  The challenging road ahead will require these organizations to develop a clear strategic itinerary to ensure they demonstrate value, rather than being viewed as the “tail of the dog” in the healthcare continuum. 

Several key strategies remain central to demonstrating that value, and home care and hospice providers must be ready for the long haul with sound financial operations, experience with taking on risk and emerging payment programs, and excellent outcomes backed by data that hospitals and other collaborating providers will understand. 

In all activities, this focus on value and the data that proves the value of the services provided by home care and hospice should be at the core of every organizational strategy. Every strategy moving forward should emanate from a foundation in value-based data and support the continued collection and analysis of that data to improve patient outcomes and the overall business performance of the agency.

Population Health/Care Coordination/Collaboration

Population Health in its purest sense refers to the health status of an entire population of people in a defined geographic region.  It encompasses the health policies, health improvement strategies and health care delivered by an array of providers for a specific population.  Home care and hospice organizations are working to embrace the population health bandwagon.  Organizations have found that several layers exist when it comes to engaging in population health initiatives. They include: chronic care management, patient engagement, managed care agreements and bundled payment programs.

  • Chronic care management involves education of staff and identification and engagement of appropriate patients, development of related palliative care, and meeting patient needs in cooperation with care coordinators. 
  • Patient engagement requires the adoption of more “user friendly” communication that includes multiple languages and lay terminology for maximum comprehension, as well as awareness building of available services among consumers. 
  • Managed care agreements will ensure that home care and hospice providers begin to learn to take on more risk, while still working with other payers in the fee-for-service environment. 
  • Bundled payment programs will get providers involved in the early stages of new delivery models to ensure they will be able to adapt to future changes in payment.

Home care and hospice agencies are a key component of population health goals, but they cannot undertake these endeavors alone.  They are joining coalitions of providers for an integrated system of care that allows organizations the flexibility to structure contracts on either a risk-based or a fee-for-service reimbursement.  These contracts/models of payment can and should include the following: 

  • Episodic Care Management which specifically meets Risk-Based and Traditional Episodic contracts
  • Chronic Care Management, including care coordination and population health
  • Palliative care/advanced illness/hospice

As these models are developing, organizations are evaluating the pros and cons of alternative corporate structures that will ensure financial feasibility while being compliant with all regulatory requirements.

Several innovators in the field have suggested that home care is in the midst of an evolution causing changes in the continuum that require providers do a better job of plugging into the care framework that exists. Key drivers of this change include increasing emphasis on pricing transparency, consumer knowledge and the suggested elimination of insurance company approvals for home care services.  This shift will require organizations to participate in Accountable Care Organizations (ACOs), commercial payers, state health exchanges, physician groups and hospitals to serve large populations and remain financially viable despite changing payment models.

Care coordination efforts among home care agencies, hospitals and primary care physicians are creating some win-win opportunities that improve quality and boost home care admissions.  Working together in a clinical integration group, these organizations have developed programs that track and collect patient and caregiver patterns to identify opportunities to reduce the need for emergency care or hospitalization through proper divergence of patients back to their primary care physician.  These and other models are being explored to address the health system needs for “Emergency Room Diversion”.

Another strategy for care coordination lies with Integrated Delivery Networks (IDNs).   As a means to address regulatory and reimbursement challenges, home care organizations are pursing “gain sharing” arrangements and equity joint ventures with IDNs, wherein they can function as the “care coordinator” for patients. These developing care models require patience and diligence to execute. They can be highly effective care management tools for hospitals and health systems, who are demanding greater value backed by data and quality metrics. Home care organizations seeking these arrangements have found the key element is to demonstrate value by saving money and time, or bringing new knowledge or relationships to the table that drive better patient outcomes.

In a nutshell, the final destination for all providers is a place where they hold more risk and focus on care management.  Many initiatives are underway to support this journey, including: 

  • Shared savings contracts
  • Predictive modeling to better anticipate patients’ needs and reduce hospitalizations
  • Communications improvements among system participants
  • The use of data to shift the cultural norm

Everyone needs to recognize that in the long run reducing hospital admissions is a good thing, despite emptier beds in participating hospitals.  Organizations that are able to achieve this as part of their core competencies will ultimately be successful with ACOs and insurers.

Acquisitions, Joint Ventures and Partnerships

With internal operations maximized, an agency’s business relationships are key elements to ensuring market alignment for success.  Whether it is through working with hospitals, physician groups and payers, or merging with another organization, the primary goals for the majority of home care and hospice organizations are maximizing resources and improving their finances.  Where in the past organizations first looked at acquisitions, agencies are now exploring more joint ventures and partnerships.   Organizations are looking at this as an opportunity to “not recreate the wheel” but rather build off something already established, whether it’s expanding into new markets or strengthening their existing footprint.   These relationships are providing home health and hospice organizations with opportunities to emerge in a stronger position both clinically and financially. 

Other agencies who are evaluating ways to consolidate resources and grow census are looking at mergers and acquisitions as the solution.  Many home care and hospice providers see acquisitions as catalysts for greater visibility in expanded markets.  Organizations view acquisitions as a way to strengthen and expand their continuum of care to meet the overall needs of patients throughout their network.  As agencies evaluate acquisitions, an area of focus and concern surrounds increased regulatory scrutiny and reimbursement pressures.

Varying strategies are being applied within networks, where combinations of initiatives are developing, including:

  • Joint ventures - building off already established resources
  • Full-scale acquisitions - addressing care coordination among home health, hospice and community-based services 

A common theme is to develop a “balanced scorecard” when looking at the pros and cons of joint ventures and/or acquisitions.

A key component of these ventures resides in developing an integration plan for sharing documentation across multiple information systems.  Some core challenges when working with hospitals and systems are:

  • Interoperability
  • Documentation processes
  • Utilization of a Health Information Exchange

Even in Canada, where the government controls referrals, agencies are exploring acquisitions and consolidation, as well as working toward bundled payments and investing in point-of-care technology to improve quality.

Financial Control

A chief goal for home care and hospice providers is the ability to show that they can control costs.  The initial focus revolves around the need to provide cost-efficient care, especially looking internally to improve factors such as admission sources, case weight mix, contract rates and length of stay.  In order to meet these goals, organizations are deploying initiatives center around LEAN management, specifically focusing on efficiencies and outcomes.  

Providers are developing and maintaining disciplined financial operations that include attention to gross margins and indirect staffing costs.  Some key elements under scrutiny include:

  • Benefit plans
  • Productivity – expectation for both direct and indirect staff
  • Technology – Does the EMR meet our current and future needs? 

Financial information is being reported in a simple and easily understood manner, and is product specific, namely for home health, hospice and private duty lines of business. 

Organizations are looking at data analytics and benchmarking as effective tools for driving down their costs and increasing revenues.  Every agency should be comparing its performance against industry benchmarks.  By keeping an eye on expenses and staying on top of billing, coding and other business office functions, home care and hospice providers will be best positioned to demonstrate value to hospitals, payers and other potential collaborators. 

Quality/Value/Data

A commitment to clinical quality in home care and hospice requires not only clinical competence but also best practice standards and technology to solve for challenges such as preventable hospital re-admissions, gaps in communication, and changing needs regarding patient education and support.  In order to demonstrate quality, providers must document critical aspects of care to meet regulatory and operating requirements that facilitate timely payment for the services provided. 

Organizations are looking closely at shifting the paradigm of how home care and hospice is viewed by large health systems.  Agencies are looking at proactive ways to demonstrate greater value in home health and hospice.   In order to change the viewpoint, home care and hospice providers must achieve excellent outcomes backed by data that support goals and objectives for safe and appropriate cost-effective care.  Home care and hospice need to focus on moving away from being the vocal minority and work towards becoming the majority where our values are clear to all within the continuum.

Additionally, telehealth has re-emerged as a key strategic element for rethinking care delivery to enhance the patient experience and reduce cost. A growing number of home care and hospice organizations have initiated more advanced telehealth solutions to expand business opportunities, reach more patients and reduce the need for labor. Telehealth and other technology are increasingly becoming major tools for cost containment and quality improvement, assisting agencies in taking their core business to the next level by adapting to an environment where taking on risk is essential for a successful future.

Pre-Acute

A growing number of home care and hospice providers are working to become the pre-acute solution to manage patients in the increasingly value-based contracting arena. Based on the continuing role of government programs and the trend toward patients entering value-based insurance plans, these agencies are developing continuous care models that accommodate dually eligible patients and address both medical and social needs.  Agencies who do this well will be more likely to survive the trend of managed care, which is reducing the number of providers to only those who are highly responsive with the right data, technology and ability to take on risk.  In short, a strong pre-acute strategy will position home care and hospice agencies to excel in the “pay for performance” world based on their ability to manage all patients cost effectively, regardless of their insurance or health status.

Other pre-acute initiatives are focusing on system integration at the clinical level.  For example, agencies and hospitals are establishing care transition processes, participating in waiver programs, sharing executive and leadership roles, and aligning with primary care physicians, especially those operating as Patient-Centered Medical Homes.

Diversification

Strategic initiatives for diversification, meaning the structuring of business in home health, palliative care, hospice and private duty services, allows agencies to offer the full complement of care options to their referral sources, thereby fortifying census and expanding revenue streams. Hospitals want relationships with agencies that offer the convenience of a single point of contact – able to solve for a variety of patient needs.  For some agencies, this approach means taking on all of the risk in the post-acute realm, creating value for other providers by benchmarking and sharing data to support goals throughout the continuum of care.

Strong alignment with a variety of providers is an effective home care and hospice strategy for diversification.  Many agencies are approaching and enhancing relationships with skilled nursing facilities, inpatient rehabilitation centers, ambulatory networks, and large academic centers to collaborate rather than compete.  They are offering palliative services and “independent at home” programs to improve care transitions and patients’ quality of life.  Additionally, some agencies are engaging CMS and other payers to explore reimbursement programs that will further prepare them to take on more risk and improve their business performance using new payment models.

Culture

Many organizations are recognizing the toll of organizational and environmental changes facing their employees, and are responding with more investments in their home care and hospice teams.  A concern with organizations surrounds finding qualified employee who will meet the demands of the changing environment.  As a result, organizations are specifically renewing their focus on people, inclusive of: 

  • Staff development
  • Managerial and leadership training
  • Efforts to re-ignite energy in the workplace

These initiatives will help promote company values and shared beliefs about the home care and hospice tradition. By supporting and rewarding employees who express interest in their agency’s progress, home care and hospice organizations will be well positioned to grow organically with a highly engaged team eager to participate.