Why Hospitals Should Partner With Home Health Agencies

Because hospitals are penalized for readmissions, working with home health agencies to provide post-acute care can reduce hospital costs while increasing patient satisfaction and improving medical outcomes.

Readmissions are costly to hospitals, and an effective way to reduce them is by providing skilled post-acute care at home. Medicare demonstration projects showed that home healthcare programs reduced readmissions by 31 percent and overall costs by 24 percent. However, funding for home health care has dropped from 10 percent of the nation’s Medicare budget to just 3 percent. Many states also have slashed their Medicaid payments to home health. One CEO makes the case for big picture thinking about in-home care.

“We sifted through a lot of data and found that restoring federal funding levels to home health can actually save the Medicare system $100 billion over 10 years,” says Bob Ebel, CEO of MyLife Home Health, based in Wheaton, Ill. “Home health is truly the ‘secret weapon’ to saving the health system. But currently, and just when we need it more than ever, it’s an industry under seige.”

In this interview, Ebel discusses the value of home health care to hospitals and to the healthcare system overall.

How does home health care reduce readmissions?

Ebel: Surveys show that patients and family members want their loved ones to be treated at home, convalesce at home, live at home, and stay at home. And when patients get what they want, they’re happier, and happier patients do better in terms of their health. When they’re eating their own food, sleeping in their own beds, living in their own environments, and participating in more of their own care decisions, their health outcomes are better.

One thing that is 100 percent certain is that home health provides the greatest value in the healthcare delivery system, especially in the post-acute side. When you are able to mitigate rehospitalizations with this particular, specialized type of care—as high-quality home health has been proven to do—that’s a big deal because those increased and repeat hospitalizations are driving insolvency and unnecessary expenses to the healthcare system.

What kind of care do home health agencies provide?

Ebel: Good home health is a personalized form of care because it puts patients at the center of their care decisions with their home health team. We have a skilled intermittent care license, giving us the ability to provide nurses, physical therapists, occupational therapists, speech therapists—all of the functional roles—in the home setting.

In addition, we make sure our nurses are deeply experienced in home care so they can become the greatest advocates for patients. They have the ability to communicate to family members, other caregivers, and the patients directly about regular care, including when it’s time to schedule visits with primary care physicians. In addition, through technology we have the ability to monitor what’s going on in the home 24/7.

Tell us about the Medicare demonstration projects’ impact on home health care.

Ebel: The Independence at Home project, for example, features close collaboration between home health nurses and therapists with home health doctors. This project provides doctors who make house calls. Often, certain populations, especially those living in northern climates during the winter, find it difficult to travel to physician offices. An 85-year-old patient isn’t going to visit a primary care physician under those circumstances. If you have the ability to take the primary care physician directly into the home, you stand a better chance of keeping that patient out of the hospital. This project is exciting because even just a few years into model, the data coming in is incredibly favorable in showing better outcomes and lower costs. We need to be partnering with hospitals to do more novel demonstrations and generate new and more valuable outcomes data.

Despite this evidence, payment for home health has been cut, both by states and the federal government, correct?

Ebel: Yes, home health is really under assault from every direction—and we, as thought leaders in this space, need to tell more stories and better stories about the vital role we play and how we save and strengthen home health. For example, in my organization, the payment for an average 60-day Medicare episode used to be $4,000. That payment has been cut in half, much of it due to cuts in home health allocations to pay for the Affordable Care Act exchanges. That has really hurt us. On the state side, in Illinois, it’s particularly threatening because the cost to a provider like us for Medicaid is $168 per home visit, yet the payment is $72. Many of our peers have had to close their doors. It gets harder to provide home health services when we can’t pay nurses and therapists a living wage.

Home Health was already experiencing a grave shortage in hiring nurses that the Centers for Disease Control and Prevention called a “looming public health crisis” back in 2013. Now we have a record aging population that is living longer with more chronic illnesses. What do we do with the “silver tsunami” if there are fewer home health options?

How do payment reductions for home health affect hospitals?

Ebel: We handle a significant number of medically fragile children, and sadly, there’s such a backlog of pediatric patients waiting to be discharged at the children’s hospitals here in Chicago because they can’t find a post-acute provider to supply the nurses and the care required. Home health for children requires specialized care training. These are complex cases, but even when children are ready to go home, they are staying unnecessarily in the hospital from two weeks to two months. That is because of the payment cuts, and this crisis is playing out in states around the country. Very few home health agencies can attract enough nurses to take all the cases needing our unique care because we can’t keep wages where they should be due to reduced government payments.

This significant downstream effect on hospitals negatively impacts bed availability, length of stay, hospital finances and, importantly, makes things so much harder on the kids and their families.

To hold a medically complicated child in the hospital, it costs the State of Illinois upwards of $6,000 a day. To provide care in the home, it’s $450 a day. Why wouldn’t every state put more into their Medicaid payments to home health providers when even a little higher spending on home health produces enormous savings overall because you keep patients out of the costly hospital platform?

Because this issue affects hospitals, should hospitals and home health agencies work together on a solution?

Ebel: I’d ask every hospital executive team to support our advocacy efforts on restoring funding cuts. The healthcare system needs sensible revolution, where we strive to do most of the care most of the time in the best environment for patients. Caring for patients is work we need to do in tandem with, not separately from, hospitals. Although many hospitals are starting to provide their own home health services, that isn’t their core competency.

In the short term, some hospitals may be concerned about losing revenue to home health, but if they are being penalized with readmissions and those associated costs, they are better off financially by working with home health agencies to provide at-home care. I think hospitals and home health should start advocating shoulder to shoulder on visits with lawmakers.

Home health has repeatedly proven it accomplishes the Triple Aim, better patient outcomes, improved patient satisfaction, and reduced costs. We’re suggesting a paradigm shift and innovative way of thinking: Take the existing Medicaid and Medicare pie, and cut a bigger slice from each for home health. It reaps rewards for hospitals, governments, and most important, the happier, healthier patient populations.

Ed Avis is a freelance writer and editor and a 
regular contributor to HFMA publications.

Interviewed for this article:

Bob Ebel is CEO, MyLife Home Health, Wheaton, Ill.