By C. Sam Smith
"It
was the best of times, it was the worst of times; it was the age of wisdom, it
was the age of foolishness; it was the epoch of belief, it was the epoch of
incredulity; it was the season of Light, it was the season of Darkness; it was
the spring of hope, it was the winter of despair; we had everything before us,
we had nothing before us; we were all going directly to Heaven, we were all
going the other way." ~ Charles Dickens
In these times of uncertainty, budget numbers are
being discussed openly by candidates and cuts are being considered in many
government programs. It appears certain that Medicare reimbursements will be
cut, and, as always, insurance companies continue to tighten their belts and
closely analyze every claim that home health agencies file. Every month, the US
Justice Department seems to announce another major instance of fraud in the
home health segment, in another part of the country. All these gloomy
situations are currently buffeting the home health industry.
In many ways- it seems to be the worst of times.
But, there’s a bright silver lining to these seemingly
dark, dark clouds.
Focusing
on finding ways to reduce the spiraling Cost of Care has emerged as a single important
driver of the dynamics that are changing the healthcare industry.
It is
clear, since Home Health is the low cost provider in the healthcare continuum,
amidst all the doom and gloom, there is a positive light shining from this one
industry segment.
Following is a chart that tells much of the story.
Chart: Per Day Costs for health services: Comparing
Hospitals, SNF, and Home Health 1
This graphic illustrates the reason why Home Health Care
as an industry segment is beginning to attract the attention of investors and
the larger players in the healthcare industry, even the federal government.
Home Health Costs are lower per day than for any of
the other patient care models. That was a fact from 2000-2007, and it is even
more accurate today than then.
So home health pros, take heart. Not all the news
coming out of health care is bad news. For many of you, who operate and work
for cost conscious, quick learning home health agencies, the news is not ‘doom
or gloom’ oriented, in fact - it is brightening.
The healthcare industry and its investors are
beginning to take notice on this long neglected and undervalued segment, Home
Health, and for good reasons. Let’s consider some specific reasons.
1. Low cost provider: Home Health
- With cost based analysis of healthcare delivery taking place within the
private and public sectors, home health as an industry segment which includes hospice, due to its lower cost of care delivery, has
become pre-eminent, and has gained increased emphasis, respect and priority in
the Overall Healthcare Industry. Home Health Care is not only the Patient’s
preferred healthcare delivery method, but is the Low Cost Provider of the
Overall Healthcare Industry Continuum, which includes Hospitals, Physician’s
Clinics, & Skilled Nursing Facilities.
- Home Health Agencies do not have the high and escalating cost of maintaining costly buildings and equipment to house their patients, meaning their costs of operations are naturally much lower.
- o Home Health Agencies are guided by Skilled Nursing Care and Licensed Therapist Care as opposed to hospitals and clinics being guided and driven by Physician Based Care.
- o The cost of Physicians salaries is naturally higher than the cost of degreed Nurses salaries, due to the amount of time it takes to achieve their educational requirements.
- o Nurse Practitioners have become more highly valued and utilized across the industry, which enables more patients to receive preventive care at a lower incremental cost.
- o Many observers are predicting that soon Home Health will soon be driven by NP orders, not solely by doctor’s orders. While it is true that now in 2012, Home Health Agencies require orders from Physicians in order to receive reimbursement from insurers, these orders are carried out primarily by nurses, therapists and aides, who visit in the patient’s home, which dramatically reduces the overall cost of reimbursement vis-a-vis SNF’s and hospitals where the cost of overhead is dramatically higher.
- o Hospitals daily cost of care in 2007 was 43X higher than that of home health, a tremendously high magnitude. All insurance providers will continue to make certain that patients will be sent home from the hospital almost immediately.
- o Hospital re-admission rates are already a driving measure that providers are mandated to reduce. Patient outcomes are universally considered to be a top priority of the continuum, emphasizing priority on The Most Important Player in all the healthcare industry—the Patient.
- o Awareness of healthcare costs overall are receiving increased focus by all segments of the federal government, not just Congress, the Media and the General Public, but also the supreme court has gotten into the healthcare cost analysis business!
2. Medicare
and Medicaid are large drivers of the Federal budget and have a dramatic effect
on the US economy, composing 18.2% of GDP and 10.8% of all employment in the
USA. Cost savings in healthcare has become a very important topic—for both
parties, and for a large segment of the population. Home Health, being the low
cost provider, is more and more an important voice at the table.
3. 25%
of the overall healthcare patient population base is absorbing 83% of the overall
costs in healthcare. 2This causes a disproportionate amount of
spending on a minority of the population, the chronically ill. This smaller
percentage of patients absorbing a great percentage of the cost is causing more
and more home health providers to narrow their focus on this chronically ill
patient base. These forward thinking HHA’s are looking to focus their efforts
on the patients who require the greatest amount of care. Resources naturally will
follow the reimbursement payments.
4. Home
Health Agencies must remained focused on their cost containment because the
climate for reimbursement is one where future reductions are almost assured.
5. Truly
only the strongest of home health agencies will survive. Advanced Home Health
Agency Management Technology is the only way for HHA’s to effectively manage
changes in the regulatory and financial cost containment realms. The strength
of a HHA is determined by their effective use of advanced technology to deliver
their services.
6. Home
health is the segment that is now the most needed by the overall healthcare
vertical in order to reduce overall costs yet, historically, it has been the
segment that is most underserved by advanced technology
Of all the software
platforms approaching the market today, AXXESS Agencycore is the most
recommended3, fastest growing, most comprehensive platform available
to the home health industry segment. Axxess takes its role as a thought leader
in the home health industry quite seriously. Although some may view the status
of home health as being in the worst of times, the future is quite bright,
especially for Axxess - which is a fast growing, healthy ecosystem, composed of
literally hundreds of highly effective home health agencies, and this number is
growing by large increments, monthly. These agencies are forging with
confidence into the future with their patient charts well documented in compliance
with regulations. Their billing reimbursement rates are ever improving and
their costs of doing business are going down. These agencies actually look
forward to and enthusiastically welcome surveyors. They use their survey visits
as their chance to share with others their ever growing operational confidence
and efficiency. Axxess Agencycore4
enables them to do this.
Home health is indeed a strong growth industry, for
those agencies who operate with strength and confidence and the right mix of technological
tools, a culture focused on learning, and a razor sharp focus on the most
strategically sound business model with which to thrive in this dynamic
industry.
Sources:
1 Wyatt Matas and
Associates, NAHC data analysis, 2001-2007.
2 “Choosing a
Successful Post-Acute Business Strategy in Today's Changing Healthcare
Environment. Washington, DC: Wyatt Matas. 2012.”
4 http://axxessweb.com
