Bonnie B. Blanchfield, CPA ScD
Lindsay E. Jubelt, MD
Gregg S. Meyer, MD, MSc
Despite the havoc the COVID-19 pandemic created for hospitals, it also created an opportunity for many important lessons learned, including the need to deliver care more efficiently and effectively in the home.
With hospitals at capacity and the risk of COVID-19 infection prevalent, there were strong incentives to provide care in alternative settings, including virtual care and the home.
Prior to the pandemic, many hospitals and start-up companies, such as Contessa, Medically Home and Dispatch Health, had already been experimenting in the home-based care space. The pandemic has challenged healthcare institutions to increase the rate of adoption of these new care delivery options. (See the sidebar, “Back to the future in home-based care,” at the end of this article.) When the level of care required could be delivered appropriately, the home proved to be a safe haven for care.
A prime delivery venue for value-based care
Hospital and health system leaders should take special note of the opportunity home-based care presents. Supporters of the idea of value-based care (where value supersedes volume as the primary focus of care delivery) are delighted with this new development for two reasons:
- Home-based care is neatly aligned with the goals and financial implications of value-based care strategies (improving quality and patient experience while lowering costs).
- It also is ripe for increased innovation, implementation and scaling.
Several supportive policies that have been introduced during the public health emergency (PHE) —including enhanced payment for virtual care services and CMS’s Acute Hospital Care at Home (AHCH) initiative (launched in November 2020) — have supported the growth of home-based care.a
Preparing for home-based care: Considerations for finance
For hospital or health system finance leaders, laying the groundwork to enable an organization to pursue a home-based care initiative requires attention to an array of complex issues. These include:
- Capturing costs of home-based care using administrative systems that were built around facility-based care
- Planning for revenue streams potentially at risk and under political scrutiny
- Setting prices for home-based care services under a variety of reimbursement mechanisms
- Garnering the investments needed to build out the capability to deliver care in the home
With the eventual lifting of the public health emergency, it is likely that the growth of home-based care will “stick.” There will be no turning back the clock. Based on the experience of the pandemic and the rapid expansion of home-based care, the pace of technological enablement, and the likelihood that patients and their caregivers will seek out home-based care services, the clinical and healthcare financial management communities will have little choice but to step up and meet these challenges.
Major supporting trends
Two broad trends in healthcare, involving increased technology enablement and consumer demand, are also playing a role in promoting expansion in both the amount and the scope of healthcare delivery in the home. Both of these factors have accelerated under the pandemic’s influence.
1 Technology enablement. A variety of new technologies, accompanied by rapidly decreased costs for their deployment, have improved our ability to monitor patients in the home. Deployment costs have decreased as new competitors for monitors, including wearables, enter the marketplace. And the ability to connect those monitors is widespread, given that more than 94% of American households have access to broadband with speeds that can facilitate the transmission of remote patient monitoring data, according to the FCC.b
There also is a wider availability in homes of smart phones, tablets and smart speakers, which provide familiar and convenient user interfaces for data collection and communication. These tools have been further exploited by the availability of a wide range of software and apps designed to help facilitate home-based care. Completing the technology chain has been the development of improved platforms for interpreting and integrating the data including compatibility with some electronic health records (EHRs).
Challenges continue to lie ahead, however, for fully disseminating the enabling technology that facilitates home-based care. Broadband, tablets and smart speakers remain out of financial reach for some, for example, and our health system’s inability to address this problem only threatens to expand the digital divide.
It therefore is imperative that organizations offering home-based care services be vigilant in addressing these inequities. Solutions they should adopt include:
- Offering virtual services by phone
- Providing tablets and broadband as part of the home-based service delivery
- Tailoring resources and staffing to meet the needs of these disadvantaged populations
Hospitals and health systems can expect to see changes in payment models to create incentives for such solutions.
2 Dramatic change in patient and caregiver demand. Until recently, home-based care was delivered primarily to those who were home-bound. Despite the greater convenience of such care, other patients’ only option was to come into a facility. The infrastructure was simply inadequate to support delivering a wider range of home-based care services, and supportive payment models were lacking, making it difficult for providers to deliver such service.
The COVID-19 pandemic quickly changed this situation. Hospitals suddenly lacked capacity for many patients in need of care in the home, leading to a stark choice between delaying care or finding a means to deliver it more effectively and efficiently in the home.
Capacity challenges were compounded by many patients’ fear of going to medical facilities where they could potentially encounter infected patients. They wanted to be safe and not leave home. Many even compromised their health for fear of exposure and COVID-19 infection. One national survey found that 80% of respondents said they were likely to use home-based care services and of those, 37% were “highly likely” to do so.c
With the pandemic, home-based care immediately shifted from a limited array of services to a select population to an imperative to serve the expanding needs of a broad population.
Bright future for home-based care
Some risk remains that the AHCH policies initiated by CMS could be terminated with the end of the PHE, potentially leading to a reversion back to facility-based care models. But other market phenomena make this less likely. In the crucible of the pandemic, home-based care has proven to be a viable alternative to other care delivery modalities. And prior to the pandemic, it had already demonstrated an ability to improve patient experience, provide safe high-quality care and do so at lower unit cost.d
The reality is that, although COVID-19 may have served as a catalyst, it is actually the nation’s transition to value-based payment, already well underway before the pandemic, that will continue to accelerate the growth in home-based care.
And it is not just organizations that are committed to the value journey that can benefit from adopting a strategy for home-based care. There also are compelling reasons for delivery organizations in all payment arrangements to participate in the home care revolution — irrespective of extent to which they are participating in risk or value-based contracts. Even under a strict fee-for-service payment model, the shift of some care to the home can add capacity in hospitals and facilities for serving patients with more complex needs, obviating the need for bricks and mortar investments. There also is ample evidence that the ability to shift care to lower-cost settings, across the entire spectrum of care from academic medical centers through to the home — and everything in between — is one of the most potent means of reducing total medical expense.
Add to these considerations the unlikelihood that technologic enablement and patient/caregiver demand will wane.
All these factors combined with the demands imposed by the pandemic present an ongoing opportunity and rationale for hospitals and health systems to take the hard-won lessons and apply them to sustainable models such as home-based care.
Nonetheless, there are still barriers to overcome for the home setting to reach its full potential in meeting the needs of patients and populations
CMS’s experience with the ramping up its AHCH program is one indicator that further expansion of home-based care services is not without challenges. Early reporting suggests that to facilitate successful development and implementation of a high-quality program, several barriers need to be overcome, including the need to:
- Facilitate workarounds to regulatory barriers and health system policies
- Alter EHRs not designed for home-based care services
- Develop requisite payment and billing mechanisms
- Build effective and collaborative partnerships and communication with outside vendors
Addressing these barriers requires significant teamwork and communication, both internally and with policymakers and external partners.
Organizations contemplating pursuing a home-based care initiative also must perform significant planning and due diligence to assess the opportunity.
Perspectives of a home-based care provider
Massachusetts General Brigham Health System (MGB), which is pursuing an aggressive value-based care strategy, has chosen home-based care as a means to propel its volume-to-value transition. Although payment policies during the PHE have supported the ability of home-based care to be at least break-even or even margin-generating under fee for service, there is good reason to be confident those policies will evolve over time as payers and purchasers look for opportunities to ensure the growth of home-based care will actually help reduce U.S. healthcare expenditures.
In working to develop business models that align with high-quality patient-centered care, MGB has identified further challenges and opportunities that require the attention of both clinicians and the healthcare financial management community.
Clinical issues that need to be resolved include:
- Determining which home-based services are best to deliver in the home
- Balancing patient convenience, provider capabilities and clinical complexity to appropriately target home-based care services and ensure they are replacing care delivered in more traditional sites, not just adding to them
- Leveraging new technologies to effectively and efficiently deliver care to ensure the inefficiencies of hospital and ambulatory care center are not imported to the new environment, which requires critical reviews of staffing models and logistics
- Ensuring the clinical community will work with patients and caregivers to assure them that home-based care is a safe and high-quality alternative to care in traditional settings
a. CMS, “CMS announces comprehensive strategy to enhance hospital capacity amid COVID-19 surge,” Press release, Nov. 25, 2020.
b. FCC, Eighth Broadband Progress Report, Aug. 21, 2012.
c. Lewis, J., National public opinion data: Re-engaging with the healthcare system, Public Opinion Strategies, May 8. 2020.
d. Levine, D.M., Ouchi, K., Blanchfield, B., et al., “Hospital-level care at home for acutely ill adults: A pilot randomized controlled trial,” Journal of General Internal Medicine, May 2018.
Back to the future in home-based care
Home-based care has been around for centuries. Prior to and at the start of the 20th century, the home was at first the predominant site of care delivery, but it became a privilege of the relatively wealthy at a time when hospital care was mainly for the indigent. Starting in the 1920s, with innovation in pharmaceuticals, anesthesia and treatment techniques, the hospital business boomed. Care shifted into the hospital and the physician’s office, and home-based care largely disappeared. We are now entering a new era in home care where we are going “back to the future” as care shifts back to the home.
Many of the most comprehensive home-based care solutions have their origins in Medicare Advantage, such as Landmark Health. Providers that are heavily engaged in such contracting have taken notice. For example, the Mayo Clinic and Kaiser-Permanente have invested heavily in expanding its home-based care capabilities.a
One early example of the rapid growth of home-based care, which may foreshadow further growth to come is the Hospitalization at Home (HaH) program. Although the HaH concept, originally developed by Bruce Leff, MD, of Johns Hopkins, has been around for decades, its application has been relatively limited.b But all of that changed with the pandemic when the combination of technologic enablement, patient demand and supportive policies. The increased interest in HaH is evidenced by the explosion in applications to participate in such programs with CMS from an initial set of six healthcare organizations to more 200 in 33 states.c
A full spectrum of care, ranging from asynchronous remote patient monitoring for chronic conditions such as congestive heart failure all the way through to advanced HaH serving as a substitute for inpatient care, is now proving an attractive alternative to traditional sites of care.
a. Japsen, B., “Mayo Clinic and Kaiser Permanente invest $100 million in ‘hospital care at home,’” Forbes, May 13, 2021.
b. Leff, B., and Burton, J.R., “Acute medical care in the home,” Editorial, Journal of the American Geriatrics Society, May 1996.
c. CMS, “Approved facilities/systems for Acute Hospital Care at Home,” List updated as of Sept. 2, 2021; and Cheney, C., “Coronavirus pandemic drives growth of hospital at home programs,” HealthLeaders, June 16, 2021.