Why Start Now? Care at Home Provides Value Beyond Cost Savings

Editor’s Note: Contributors to this report include Heidi Pandya, MSHA, Principal, Sg2; and Jayme Zage, PhD, Principal, Sg2.

Prioritize where to begin care at home efforts in your organization

Care at home is not a new concept to many in the healthcare sector as it has existed in some form for the past 30 years. But the COVID-19 pandemic accelerated the need to deliver care differently, specifically leveraging digital health capabilities and shifting care into the home setting. According to Sg2’s Impact of Change® Forecast, care at home will grow by 10% over the next five years and 20% over the next ten years.

However, most healthcare organizations are still in the early planning stages of their care at home journey, evaluating which offerings to invest in and which patients to include in their pilot efforts. It may seem like jumping into a full-scale hospital at home program makes the most sense, but there is considerable value in starting with a less complex type of care at home.

Types of care at home

Today’s digital technology enables providers to deliver a wider variety of services outside of the hospital or doctor’s office. Sg2 categorizes these services provided in the home in four buckets:

  • Acute care at home includes observation at home and hospital at home, which encompasses full-scale inpatient care for conditions such as pneumonia, congestive heart failure and cellulitis.
  • Continuing care at home includes skilled nursing, rehab, hospice and palliative care.
  • Chronic care at home includes primary care for chronic condition management, mobile integrated health, oncology, dialysis and infusions.
  • On-demand care at home includes labs, direct-to-consumer testing, virtual urgent care and primary care for the worried well.
Which type of care makes sense?

There are opportunities to implement care at home programs across the care continuum from primary care to acute care. Starting with a full hospital at home program may be where organizations think they should start, but this approach also is the most difficult, requiring more upfront capital, resources and coordination of logistics to be successful.

Bar graph with 4 bars, each in a different shade of teal or purple, increasing in height from left to right, illustrating rising complexity levels and cost as care at home locations change from on-demand to chronic care to continuing care to acute care.

There is value in introducing programs within the chronic care and continuing care at home categories early on in an organization’s care at home journey. The cost savings may not be as significant, but there are additional downstream benefits such as improving patient experience and preserving hospital capacity for the sickest patients. Developing these lower-acuity care at home programs first also helps organizations build the necessary experience and infrastructure to eventually scale to full hospital at home.

Uncertain reimbursement landscape reflects innovation in its infancy

Chronic care and continuing care at home also are alternative avenues for providers to participate in value-based care (VBC) arrangements with payers, including Medicare. VBC payment models, where healthcare organizations are compensated based on the quality of patient outcomes and controlled spending, continue to expand. Chronic condition management in the home can reduce avoidable admissions and emergency room visits, a goal which is rewarded under VBC arrangements.

However, the payment landscape for acute care at home is less certain. For example, during the ongoing COVID-19 public health emergency, hospitals can apply to the Centers for Medicare & Medicaid Services (CMS) for a waiver to establish acute hospital care at home programs. Under the recent year-end government funding package, that waiver opportunity has been extended through the end of 2024, meaning it will likely not end at the same time as the public health emergency declaration.

However, Congress would need to act again to make this initiative permanent. There is also uncertainty that full inpatient reimbursement rates for hospital at home care will continue, as Congress and CMS will likely conduct a deeper review of the program’s safety, effectiveness, utilization and costs over the next several years. Also, because acute care is still primarily reimbursed on a fee-for-service basis, providers will need to pursue additional arrangements with payers in order to continue delivering these services in the home.

Opportunity to reinvent care delivery

While the reimbursement landscape is unclear, now is the perfect time for organizations to evaluate and implement care at home. There are obvious financial advantages, but there are many other reasons to start now: improved patient experience, reduced cost of care, strategic growth opportunities and preserving hospital capacity for patients who truly need to be there, to name a few.

The need for inpatient care also continues to grow because of aging baby boomers and the rising number of patients with complex chronic conditions. Length of stay and bed days are projected to grow even higher over the next ten years. Access to care once patients leave the hospital also is currently limited in many places, which contributes to length of stay challenges.

One of the only ways to reverse this trend is through care redesign, which includes care at home efforts. According to Sg2’s Impact of Change forecast, adult inpatient days can be reduced by 5% over the next ten years through care redesign.

Adult IP Days Forecast, US Market, 2022-2032, line graph showing the increase or decrease in percentage of inpatient, tertiary and care redesign.

We also know that staffing challenges are a concern across the healthcare industry. Vizient’s recent Workforce Intelligence Report found that nurse turnover more than doubled since 2019, and more than half of those who remain in the nursing profession report feelings of burnout. There are similar shortages across the physician population as well as with other staff such as medical assistants, home health aides and nursing assistants.

Therefore, many organizations will need to take a creative and thoughtful approach to staffing to begin a care at home program. Implementing virtual care, redeploying staff differently, recruiting new staff and leveraging alternative care teams are all viable options within the current workforce environment. But, there are other potential benefits to these solutions as well. Allowing more flexible hours and work locations makes it easier to recruit and retain staff and there is the opportunity to reimagine the roles of current team members, upskilling them to succeed in the digital health environment.

Through care at home, we truly can rethink the way we’re deploying care and reimagine how we can deliver care across the healthcare continuum. However, it’s not an all or nothing endeavor. Starting with lower complexity care at home programs such as primary care or skilled nursing can deliver immediate savings, free up critical inpatient bed space and set up an organization for success with future higher complexity programs.

Visit Vizient Member Networks to learn more about care at home during our upcoming Performance Improvement Collaborative, an opportunity to work with others across the healthcare system to implement measurable solutions and best practices.

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