Care At Home: Trends, Spend, Predictions & Reality

This week we're exploring home healthcare. From post-acute and hospice to hospital at home, the pandemic era sparked a renewed fervor for shifting traditional care and services into our homes.

While the concept of receiving care in one's own home is not new, the rise of these models represents a significant shift away from traditional inpatient care. It turns out the why now question has as much to do with technology and care model innovation as it does with COVID. But challenges do remain. Volume, cost, staffing, resistance, and selection hurdles are top of mind for providers, patients, and payers alike.

One thing is clear as I continue to learn about this space: it's a matter of how and when, not if, healthcare makes its way into our homes.

In this issue of Signals, let's explore (1) transformations underway that aim to bring traditional care services closer to us; (2) challenges still standing in our way and what's being done to address them; (3) reasons for optimism from recent headlines; and (4) key takeaways and suggestions for deeper exploration.

Home Healthcare, by the numbers

• Market. There are 33,000 home care and hospice organizations employing more than 2 million nurses, therapists, aides, and other caregivers who care for more than 12 million Americans each year in the US. [1]
• Employment. From 2021 to 2031, employment in this space is projected to grow by 21%, adding 711,700 jobs each year on average over the decade. [2]
• Demographics. By the end of this decade, 73 million Americans – one-fifth of the population – will be older than 65. By 2060, that number will be 95 million. [3]
• Payments. Although many private insurers offer a home health benefit, Medicare is the largest payer for home health services. By 2030, Medicare's home health spend is expected to reach $226 billion. [4]

• Pace. As of January 2023, home health care spend in the US is growing more than twice as fast as overall national health spending. [6]
• Fragmentation. A recent survey found 81% of physicians responsible for discharge planning now refer patients to home health agencies (HHAs) for home-based recovery and care. There are over 12,000 US HHAs in the US and the market leader, Kindred at Home, holds only 6% share. [7]
• Sentiment. In a pre-pandemic EY Survey, 60% of US consumers were open to having non-urgent care in a non-traditional setting, and more than half (54%) were willing to be treated for common acute symptoms online instead of seeing a physician in person. [7]

Signals

Opportunities

Dr. Eric Topol's recent article on the Hospital-at-Home movement was a major driver in writing this issue. [8] His balanced, insightful takes on HaH left me feeling more optimistic than not. He believes:

"Hospital at home has profound promise for how we render healthcare in the future. It could ultimately be even bigger than the major movement from in-patient to out-patient for procedures. It will require that some clinicians become “home-ists” rather than hospitalists and a very substantial reconfiguration of the use of current facilities, things that are major challenges to the typical sclerotic health system."

1. The home healthcare boom is upon us. A recent MedCity News article by the same title points out that close to 12 million Americans receive some kind of home healthcare each year. [9] That number is expected to grow, fueled by a growing desire for convenience as well as many seniors’ desire to age in place. Look no further than CVS Health President & CEO Karen Lynch's comments on their recent $8B Signify deal:

"This transaction advances our value-based care strategy by enhancing our presence in the home. Our expanded capabilities will bring us closer to the consumer as we continue to redefine how people access and experience care that is more affordable, convenient and connected." [10]

2. Merger Mondaze. CVS is far from the only wavemaker moving closer to the end consumer. Here's a short list of M&A headlines from the past year.

• Amazon scoops up primary care company One Medical in deal valued at $3.9B [11]
• Walgreens steps up focus on home health with $330M CareCentrix deal [12]
• Mayo Clinic, Kaiser Permanente announce strategic investment in Medically Home to expand access to serious or complex care at home [13]
• UnitedHealth to acquire home health provider LHC Group in $5B deal [14]

3. Measuring Outcomes. As you might imagine, a growing evidence base suggests these long-term big bets will pay off in a big way. From savings to satisfaction, stakeholders across the ecosystem are building their evidence base brick by brick. These are just a few results worth highlighting:

• A study by the Annals of Internal Medicine showed a hospital at home program enabled a 70% reduction in readmissions and decreased the cost of acute care episodes by an average of 38%. [6]
• A 2021 study conducted by Kaiser Permanente found 94% of patients treated with remote care at home reported being satisfied with the quality of care and would recommend the program to others. [15]
• Early trials of a Johns Hopkins model found the total cost of at-home care was 32% less than traditional hospital care, the mean length of stay for patients was shorter by one-third, and the incidence of delirium was dramatically lower (9% vs. 24%). [16]
• A 2022 AARP survey showed older adults' motivations for using technology more in daily life. Beyond increases in ownership, tech literacy, and access, it's exciting to see the populations who will likely use home-based healthcare services already motivated to use technology to stay connected, manage responsibilities, stay healthy, and maintain independence. [17]

Challenges

1. Transformation. A recent Health Affairs article discusses three significant and related challenges to expanding the Hospital at Home delivery model: (1) generating a sufficient volume of patients to keep local programs in business, (2) achieving cost efficiencies, and (3) defining appropriate patients (not so sick that the patients will fail to heal or be in danger but not so healthy that they don’t need Hospital at Home). [18]

"Unless there is a dramatic change in reimbursement, such as has been incentivized short-term by the CMS pandemic waiver, there is no financial reason why health systems will make up front investments to pursue HaH."

2. High Tech, Low (Human) Touch. Several authors and pundits have pointed out the softer costs of moving in-person care home using more cost-effective tools like telehealth. They say a patient may never feel the warmth of a nurse's hand on the forehead or reassurance of a doctor's stethoscope over the heart. In the widely circulated New York Times piece from January, a KP Medical Director pointed out this trade-off:

"Although I’m sacrificing that bedside interaction with the patient, I’m also increasing the amount of patients I can see a day to provide that better care in home to the patient, which kind of makes up for the losses.”

3. Resistance. Some physicians and hospital CFOs remain hesitant to introduce patients to at-home care. Time constraints, simplicity of admissions over referrals, and revenue are a few reasons mentioned in an article by the Commonwealth Fund. The piece shares a helpful example from a home program in Tazewell, Virginia. Two months into the program they were unable to recruit a single patient because physicians were reluctant to refer, even though they supported the concept in principle. [16]

"We still get a lot of people who won't refer patients to us because they feel that we are an inferior choice to coming into the hospital. Presenting the program as a seamless hospital unit helps. It gives them confidence to at least try us."

4. Staffing. Staffing remains far and away the most pressing challenge for home-based care providers based on recent surveys. Recruitment and retention challenges are leading to shortages that have providers turning away referrals. Last year the home health industry's referral rejection rate was 58%. Encompass Health, one of the larger providers in the market with 251 home health and 96 hospice locations, said they lost a minimum of 1,700 home health admissions in [Q4 2021] due to staffing constraints. [19] H/t to Emily Levy for weighing in on this front - so much more to say on this one, especially around H.R. 5426 and what it would mean for the kidney care world.

5. Transitions. An example of a policy effort to address staffing challenges in the kidney care world can be seen in the Improving Access to Home Dialysis Act (H.R. 5426) that aims to increase access to home dialysis by providing trained, professional staff assistance to patients in the home. When it comes to home dialysis transitions, the first 90 days are critically important to get right. The bill aims to provide reimbursement for in-home support and training. [20]

Tech Trends

Wearables. I was surprised to learn nearly one-third of adults over 50 own a wearable device. AARP's annual Tech Trends and the 50-Plus report is a great resource for understanding tech adoption and hurdles in the senior market. [17]

Mozarc. This week DaVita and Medtronic launched their new venture, Mozarc Medical, to develop new kidney care technologies with a specific focus on at-home treatments. Globally 2.6 million people are currently being treated for kidney failure—a number that’s expected to double by 2030. Mozarc will focus on ways to use technology to keep patients on home therapy longer while also improving the patient experience and "demystifying" kidney therapy for a cohort of patients who are older and often more vulnerable. [21]

Inbound. Inbound Health is a new startup spun out by Minnesota-based Allina Health and Flare Capital Partners. The company is designed to help enable health systems and health plans to establish hospital-at-home and skilled nursing-at-home programs. Inbound can provide health systems with the virtual care teams, technology, analytics, payment models and supply chain partnerships they need to operate successful at-home care programs. In the October, 2022 launch news, CEO Dave Kerwar said:

“A lot of times, health systems have different strategic priorities when it comes to hospital-at-home or skilled nursing-at-home. Our clinical leaders can help to customize the care pathway to the health system’s unique needs.” [22]

Monitoring. Remote patient monitoring is something I've covered in past issues (Emerging Tech, Digital Biomarkers), but there are a few recent wins worth highlighting that have people excited about what's still to come. Keep in mind that monitoring remains (and will continue to be) one of the greatest opportunities ahead as we work to realize the full potential of data, AI, behavioral health, and home-based care delivery models. H/t to Zain Syed for flagging integration challenges and mitigation opportunities to help address fragmentation in the monitoring market.

• Alio just became the world's first non-invasive potassium monitor. After receiving its first 510(k) clearance for its RPM system a year ago, the company just announced it has received its second FDA clearance for the platform, which includes three new metrics: hematocrit, hemoglobin and potassium. [23]
• Northwell Health just announced it has adopted Philips patient monitoring platform to drive integration and innovation for a better patient and staff experience and improved outcomes. New York State’s largest health system has 83,000 employees, 21 hospitals, 850 outpatient facilities and one of the largest residency programs in the U.S. with over 1,900 residents and fellows. [24]
• Best Buy Health just announced it is partnering with Atrium Health to enhance Atrium's hospital-at-home program. Atrium is part of Advocate Health and operates one of the largest home-based care programs in the United States. [25]
• Biofourmis and Orlando Health announced a multiyear agreement in January to launch a hospital-at-home program for patients in Central Florida. This follows another HaH program launch with Illinois-based Blessing Health System a year ago this week. [26]
• Speaking of health systems launching their own HaH programs internally, VCU Health announced in January that it has launched a program with a goal of providing acute care at home to 2,000 patients in its first year. [27]

Regulatory pathways (before and) during the pandemic. A 2020 perspective piece published in Nature reviews the regulatory, safety, and privacy concerns of home monitoring technologies introduced during COVID-19. Given we're only a couple years into this new world order and the proper vetting and classifications of these technologies happens on much longer time scales, I found this helpful. It's also helpful to know what is (and is not) classified as a medical device if you're out there thinking about designing a new system for potential home use. [X]

Voices

Smit Patel (Voyage 31 ) and the team at Digital Medicine Society (DiMe) are building the professional home for digital medicine. Smit shares how DiMe and its partners are tackling the toughest digital medicine challenges, developing clinical-quality resources on a tech timeline, and delivering actionable resources to the field via open-source channels and educational programs.

Adeline Dorough, MPH (Voyage 30 ) shared the importance of patient reported outcomes (PROs) including the Patient Activation Measure (PAM), and why the PAM is the gold standard tool for assessing patient activation. Her team's work at Phreesia centers around understanding one core question: "Does this patient possess the knowledge, skills and confidence to manage their own health and healthcare?"

Steve Winfree (Voyage 28 ) takes us through his journey, from his surprise diagnosis while playing college basketball to eventually needing dialysis to survive, and finally to his transplant story that went viral and has logged more than 700 MILLION views to date. Steve knows firsthand the challenges of getting the care he needs at home, which he has shared with us both on T-Minus 10 and in Community Webinars with IKONA.

Linta Mustafa (Voyage 27 ) teaches us how Vitract is building the most advanced and comprehensive at-home gut test that decodes the gut microbiome. I'm excited to follow the massive impact Vitract has on chronic illnesses with strong ties to gut health thanks to advances in at-home testing and diagnostics.

R.J. Briscione (Voyage 24 ) shared his work in the social determinants of health (SDoH) areas of food, housing and transportation having worked in leadership roles at several large payers like Aetna and Anthem. RJ talks about the importance of getting it right in the last mile of care and services: into peoples' homes. R.J. talks about how companies like Unite Us, Season and WellTheory think about service design that truly makes a difference, and why they are differentiated from the way health plans traditionally operate.

Shaminder "Shammi" Gupta, MD (Voyage 23 ) shared his perspectives on different barriers to education and treatment selection for people with kidney disease (CKD) and kidney failure (ESKD). Shammi shares how the current dialysis education approach often scares patients away from home dialysis due to a lack of available hands-on education and shortened time to make a decision. We also chat about how Monogram Health leverages experiential learning to help their patients to feel more empowered to pursue new treatment options like home dialysis.

Raihan Faroqui, MD (Voyage 22 ) joined me to talk about bringing dignity and technology to the end-of-life care experience through his work at Guaranteed. We also talk about opportunities for supporting and upskilling the family and caregiver roles, and what it means to allow families to practice at the top of their license.

Rich Wood, PhD (Voyage 13 ) chat about how Rich has leveraged education and his teaching skills to impact his networks and colleagues, from academia to Virta Health, and now in his current role at CVS Health. Rich also touches on how physicians and clinicians can help educate patients during their patient care journey, especially around nutrition and healthy behaviors. Rich serves on IKONA's Scientific Advisory Board.

Key Terms

Home healthcare is a general term that encompasses all types of medical and non-medical care provided in the home. Hospital at home refers specifically to hospital-level care that is provided in the patient's home, rather than in a hospital. At-home care generally refers to non-medical assistance provided by family members, care partners and hired caregivers.

Aging in place is a term used to describe the desire of many older adults to remain in their own homes as they age, rather than moving to a nursing home or other institutional setting. For purposes of brevity, this piece focuses on medical care delivered in the home, rather than a broader view on non-medical home services, aging in place, and healthspan.

Remote patient monitoring is a technology that allows healthcare providers to monitor patients' health remotely, typically using sensors and other devices that collect and transmit data to the provider.

Top-Down And Bottom-Up. How do we pay for home health in the US? Making sense of how public and private payers think about paying for homecare services is a useful (albeit dizzying) exercise. Here are two basic approaches that were helpful for me to understand.

• Medicare currently pays for Hospital at Home using a top-down (hospital-centered) payment—the payment is made to hospitals, and the amount is based on Medicare’s payment system for acute inpatient admissions.
• A bottom-up approach could generate a payment amount on the basis of existing home-based care payment systems (typically less, hence the cost savings), with additions for the expanded services needed for the more acute patients in a Hospital at Home model.

Technology and disruption. In their review of the UK National Health Service for use of AI and digital technology in 2019, Dr. Eric Topol and his co-authors identified remote patient monitoring and hospital at home to be the most transformative potential technology in the next 2 decades. The graph below shows their consensus ranking of the different tech on the horizon and its magnitude of workforce disruption.

Benefits and costs of care at home. McKinsey's From Facility To Home report mentioned in the intro also has a great table that lays out potential benefits and costs by segment, including payers, facilities and physician groups, tech companies and their investors, and patients (below). [5] Within that bucket of services shifting home, it's interesting to think about the more complex sides of distribution and services in areas like home infusion, RPM, and home dialysis (right). If you're looking to dive deep into healthcare at home and want to feast your eyes on the majesty of more charts like these, look no further than McKinsey's future of care report. [29] H/t and a special shout out to Dalglish Chew for your fiercely, quiet opinions and authorship.

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References

1. National Association for Home Care & Hospice (NAHC )
2. Monthly Labor Review, Projections overview and highlights, 2021–31 (BLS )
3. Demographic Turning Points for the United States: Population Projections for 2020 to 2060 (US Census )
4. National Home Health Spending Dips to $129.1 Billion as Health Care Sector Normalizes (Home Health Care News )
5. From facility to home: How healthcare could shift by 2025 (McKinsey )
6. Hospital-Level Care at Home for Acutely Ill Adults: A Randomized Controlled Trial (Annals of Internal Medicine , 2020)
7. Rethinking the home health strategy (EY , 2021)
8. The Hospital-at-Home movement (Ground Truths , by Dr. Eric Topol)
9. The Home Healthcare Boom is Upon Us (MedCity News , 2023)
10. CVS Health completes acquisition of Signify Health (CVS Blog )
11. Amazon scoops up primary care company One Medical in deal valued at $3.9B (Fierce Healthcare )
12. Walgreens steps up focus on home health with $330M CareCentrix deal (Fierce Healthcare )
13. Mayo Clinic, Kaiser Permanente announce strategic investment in Medically Home to expand access to serious or complex care at home (PRN )
14. UnitedHealth to acquire home health provider LHC Group in $5B deal (Fierce )
15. Description and Early Results of the Kaiser Permanente Southern California COVID-19 Home Monitoring Program (The Permanente Journal , 2021)
16. "Hospital at Home" Programs Improve Outcomes, Lower Costs But Face Resistance from Providers and Payers (Commonwealth Fund )
17. 2022 Tech Trends and The 50-Plus (AARP Report )
18. Hospital At Home Is Not Just For Hospitals (Health Affairs , 2022)
19. Why Home Health Providers Are Producing High Referral Rejection Rates (Home Health Care News )
20. Improving Access to Home Dialysis Act, H.R. 5426 (NKF )
21. DaVita, Medtronic raise the curtain on tech company, Mozarc Medical, aiming to bring innovation to kidney care (Fierce Healthcare )
22. Allina Health, Flare Capital spin out startup to enable at-home care models (MedCity News )
23. Alio receives second FDA Clearance (Alio blog )
24. Philips and Northwell Health partner to standardize and future-proof patient monitoring across the enterprise (Philips blog )
25. Best Buy Partners with Atrium On Hospital-at-Home Program (AHA )
26. Partnership to Launch Hospital-at-Home Program in Florida (mHealth Intelligence )
27. Virginia Health System Creates Hospital-At-Home Program (mHealth Intelligence )
28. New York Times: Your Next Hospital Bed Might Be at Home (CHIBE )
29. Regulatory, safety, and privacy concerns of home monitoring technologies during COVID-19 (Nature )
30. The Next Frontier of Care Delivery in Healthcare (McKinsey )

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