Health Systems Can Lead Charge On Moving Care To The Home

Delivering the right care, at the right time, in the right place is an oft-cited goal for healthcare providers. The desire to meet these aims is commendable but defining the right place is a constantly moving target. We’ve seen care transition from the hospital to ambulatory sites, retail locations, and, most recently, the virtual space. Charting that journey over the next decade, we see delivering care at home (C@H) as the next frontier. Health systems are uniquely positioned to lead this transition rather than letting other entities leapfrog them.

This article launches a three-part series in which we will explore the opportunities and challenges for health systems in developing this new frontier. This article looks at the current C@H landscape. In the other two articles, we will examine where and how to start thinking about the financial implications, and offer considerations to ensure a successful launch of C@H.

Care at Home is having a moment

Evolving market dynamics are causing healthcare stakeholders to broaden the aperture of care at home beyond traditional home health services, which are mainly geared toward lower-complexity care. A changing payment landscape, evolving consumer preferences, and technological advancements allow us to think differently about the home as the site of care. Home now has the potential to incorporate a suite of offerings across the care continuum to include longitudinal care (home-based primary care, behavioral health), chronic care (infusion, dialysis), discrete ancillary services (urgent care, imaging, labs, therapy) and acute and post-acute care (Hospital at Home, observation, emergency care, and skilled nursing).

Several market tailwinds are fueling this expansion. Most notably, a payment landscape that increasingly acknowledges the value care at home can provide. More than 300 hospitals have been approved to participate in the Acute Hospital Care at Home program, which the Centers for Medicare and Medicaid Services launched during the COVID-19 pandemic. Under the program, CMS reimburses providers at parity for the equivalent hospital admission shifted to the patient's home. The waiver is set to expire at the end of the year, but legislation is moving through Congress to extend it through 2029. Following CMS' lead, early experiences with other payers have shown a willingness to reimburse home-based hospital-level care, although often at a lower rate compared to facility-based care. And because care at home offers the opportunity for risk-based providers, government payers, and private payers to reduce the total cost of care and improve outcomes, we expect home-based payment models to keep evolving, structured in a way to encourage participation, while also generating savings.

Care at home also benefits from a growing evidence base around quality of care. Several studies have shown clinical outcomes for home-based hospital care are equivalent or superior to facility-based. In one trial comparing H@H programs with inpatient settings, home-based patients reported fewer lab orders, imaging studies, and consultation orders, increased activity levels, and decreased frequency of readmissions. Additionally, a study conducted by CMS evaluating patients admitted under the AHCAH waiver found hospital-at-home patients had low mortality rates and minimal escalations back to the brick-and-mortar hospital.

At the same time, patients are becoming more comfortable with receiving care at home – 78% of adults said they would be interested in getting follow-up care for a medical procedure at home, according to a Partnership for Quality Home Healthcare survey. Hospital at Home patients also rate their physicians, comfort, and admissions process higher compared to patients in an acute care setting. More convincing than survey figures are the patient testimonies themselves. Patients frequently cite better sleep, and more control over their care experience as benefits offered by receiving care at home rather than a facility.

Finally, thanks to advancements in technology, the scope of services that can be done at home, across the continuum, continues to expand. A recent Oliver Wyman analysis showed that up to 40% of medical spending can clinically be provided at home today (see exhibit 2). Projecting to 2035, we predict that up to 60% of hospital admissions will be feasible to be cared for at patients’ homes.

Providers have an opportunity to expand Care at Home

Taken together, these market dynamics present health systems with two options: continue to focus on the traditional way of providing care or embrace care at home as the next frontier and help shape the evolution of care delivery. Historically, health systems have ceded the role of site of care innovation to other players, including payers, big tech, retailers, and venture-backed firms. They shouldn’t fall into that trap here. We believe health systems are best positioned to lead the shift of care into the home.

First, local health systems have built a high level of trust in their communities which is essential to generating adoption of C@H services in the first place. Furthermore, health systems can more seamlessly integrate data and coordinate care. The slow crawl to interoperability is still creating data vacuums when patients get care from other providers. By adding care at home to their service lines, health systems can ensure that a comprehensive ecosystem of services is offered to a patient with data flowing easily from one provider to another.

Additionally, health systems have the assets and knowledge that can be used as a starting point to develop care-at-home capabilities. Yes, each of these assets will have to be reconfigured, and knowledge re-applied. For example, a hospital pharmacy will need to learn how to dispense medications in a patient-friendly manner versus dispensing to automated machines and clinicians, but with the right change management approach, health systems can leverage their capabilities to build high-quality care at home programs tailored to their community’s needs.

Finally, the care-at-home opportunity for health systems comes during ongoing cost pressures which are forcing them to think creatively about how to serve their patient population’s needs in the most cost-efficient manner. For providers, care at home can serve as the capacity pressure release valve some of them require and help them avoid costly capital outlays – after all, the average system capital outlay per additional inpatient bed is nearly $2 million. Additionally, once a care-at-home infrastructure has been developed, health systems could use that infrastructure to begin offering new previously untapped sources of revenue, including home infusion or home dialysis.

While the potential for care at home is great, there are pitfalls to avoid. As health systems consider if and how they should participate in the C@H trend, leaders must also acknowledge operational and economic challenges. Operational concerns include questions on where and how to start -- which modalities of care to offer, build/buy/vend options — and the change management implications, particularly with building physicians’ level of comfort with C@H models. While C@H models often require a lower labor intensity compared to traditional sites of care, new labor pools will need to be stood up, potentially competing with traditional sites of care for recruitment.

From an economic perspective, providers must evaluate the impact shifting care to the home will have on their existing facility financials. In the near term, fixed cost structures will remain, meaning the system will need to carefully evaluate backfill potential and estimated reduction in cost to deliver care in the home to move forward confidently. We will address these questions in subsequent articles.