The Future Of Home Healthcare: Value-Focused, Data-Driven & Continuum-Connected

While attending the National Association of Home Healthcare & Hospice annual conference last week, it was evident from conversations with both providers and vendors that there has never been a more uncertain time in the history of the home healthcare industry. Stakeholders are being challenged on multiple fronts;

• Large-scale regulatory and reimbursement changes loom in the new Conditions of Participation, the now stalled Pre-Claim Review and the proposed Home Health Groupings Model.
• Capitated, non-government payors continue to grow in their importance and demand dramatically different care models than traditional payors.
• Hospitals and physicians are shaking up decade-old referral patterns, prioritizing performance over personal relationships.

Underlying all of this near-term change is a fundamental re-organization for our overall healthcare system around outcomes and accountability, which will require dramatically different capabilities from successful providers than in decades before. In order to succeed in this new paradigm, home health businesses of the future will be required to be Value-Focused, Data-Driven and Continuum Connected. Home healthcare agencies of today should be focused on building these distinct skill sets into both their organizational culture as well as their overall clinical and business strategy economy. Together, these interconnected industry changes combined will have the potential over the next 5 years to transform home-based healthcare from an acute afterthought to the center of the 21st healthcare

1) Value-Focused

The era of the volume-driven healthcare industry is rapidly coming to an end. Rather than being driven solely by amount of care provided, the future of healthcare reimbursement will be closely tied to the value of that care. The last several years have seen a massive shift to this volume-driven payment system, with an explosion in the formation of risk-based Accountable Care Organizations, Value-Based Purchasing and Bundled Payments programs that each allow providers to capture the savings they create from more efficient and effective use of care. Healthcare observers who initially saw this shift as a legislative fad or counted on Secretary Tom Price to stall them should not kid themselves, as it is becoming more and more clear that this era of value is here to stay and is the only way to permanently bend the cost curve as our nation’s seniors grow in ranks and their medical needs. Home-based care plays perfectly into this shift because it can provide high quality and preventative care at a price significantly less than in a skilled or nursing facility.

In Home Healthcare, the value-based purchasing program is currently in trial in 9 states and will scale from 5% to 8% potential bonuses or penalties by 2020, but in 5 years I fully expect it to be implemented nationwide.  By directly paying up to 8% more for the highest quality patient outcomes, CMS has put an ROI to providers making care quality investments. Combined with the growing importance of fully capitated models employed by large managed care payors, this shift in Medicare payment for value will help speed the home healthcare world to catch up with the rest of the healthcare system. While the old model of pre-set payment amounts forced strategic operators to optimize for sheer patient growth and cost reduction through mass consolidation, this new equation will reward even those smaller providers who use innovative methods to outperform their competition. While keeping down costs will always be important for businesses in the low-margin home healthcare industry, providers who want to succeed and grow in this new era will seek to utilize any clinical advantage they can find.

2) Connected To Continuum

Never before has so much of a hospital or skilled nursing facility's financial success depended on what happens to a patient after they walk out their doors. In Fiscal Year 2016, U.S. Hospitals were penalized more than $500 Million through the Medicare Readmissions Reductions Programs for readmission rates that exceed the national average. At the same time, high performing Hospitals were able to capture a total bonus pool of $1.5 Billion based off of a set of their key clinical outcome metrics, a large percentage of which focus on readmissions. With MACRA and MIPS, these financial bonuses and penalties are also on their way to Physicians as well. For all risk-bearing entities in the value-based era, your post-acute network can either be an anchor dragging your outcomes and your payment rates down, or a sail lifting you up above the waves and out in front of your competition.

With all of this money at stake, these important referral sources will demand more data and accountability from their home healthcare partners. In particular- they will require the agencies they refer to be able to provide the following:

• Agency historical performance data by Patient DRG
• Evidence of patient and disease-specific clinical pathways and risk mitigation programs
• Real-Time updates on their referred patients’ status and progress towards goals

Home Healthcare providers should think strategically on how they could begin the process of collecting and sharing this type of information with referrers in as real-time form as possible. This will also require post-acute healthcare IT vendors to work towards further integrations, collaboration and analytics that will enable the seamless cross-continuum coordination demanded by this new era.

3) Data-Driven

In this clinical arms race of value-based care, the strategic creation and utilization of high impact data insights will be the most powerful competitive advantage available. The last decade has seen a diverse set of industries from consumer advertising to airplane manufacturing be transformed by the power of data. By automatically monitoring key metrics and mathematically optimizing for intended outcomes, theses industries saw tremendous gains in efficiency, quality and overall productivity. In these industries, a company’s aptitude for and investment in data allowed them to significantly outperform their competition. This same shift is beginning to occur in healthcare.

As the first segment of the healthcare industry to be directly impacted by value based care, hospitals across the country have led the way in taking advantage of data-driven insights to improve patient outcomes. Utilizing the data from millions of aggregated patient clinical records captured across cloud-based electronic health records, leading healthcare analytics firms like Health Catalyst and Truven Health have been able to create suites of powerful algorithms that accurately predict important clinical outcomes and make personalized recommendations. These insights are then delivered back through the health record to help notify caregivers of emerging issues and inform their clinical decision-making. Early-adopting hospitals who armed their staff with these insights as they deliver care gained a significant competitive advantage in managing their population risks, reducing wasteful spending and improving their clinical outcomes. As the penetration and effectiveness of these analytic technologies in acute care has increased, however, the use of these same insights is quickly becoming table stakes and expected by all the parties involved in the system.

While this trend started in the acute industry, many innovative Physician Practices, Skilled Nursing Facilities and Home Healthcare providers have begun to strategically adopt healthcare technology partners who can help them use data to gain an edge. As value-based care continues it’s expansion, the importance of these automatically-generated insights in post-acute care will increase in importance for their acute referral partners, who are now heavily incentivized on post-discharge performance metrics. Home-Based Healthcare Providers who would like to grow their businesses should take notice of the lessons learned in the inpatient sector and seek to position themselves as early technology thought leaders in their own markets in using this type of technology to improve care before some of their competitors beat them to the punch.

Takeaway

As a result of value-based care, performance-based star ratings and complex new regulations, the Home Healthcare industry will change more in the next five years than in the last 15 years since the Fee For Service program was initiated. While this massive change will cause a lot of agencies to struggle with changing rules and payment structures, it will also create a huge amount of opportunity for businesses willing to think differently about how care is delivered and managed. Is your agency working towards being value-focused, data-driven and continuum-connected?

Wes Little

Director of Product Management, Kinnser Software