Care at Home Is an Increasing Patient Demand—and a Win for Everyone
The market continues to shift toward care in the home as consumers report high satisfaction rates with care models such as hospital at home—an ultimate version of a patient- and family-centric care model. Studies demonstrate that care delivery in the home meets or exceeds patient outcomes in facilities. Compared to an inpatient stay, patients who received care in their home had more physical activity and better sleep, leading to fewer readmissions and reduced mortality rates.1
It's a win for everyone. Patients are more satisfied receiving care at home. Hospitals can cut the costs of an inpatient stay (including reduced overhead costs and shorter lengths of stay). And payers can share in these savings. Organizations that have intentionally focused on hospital at home care model development have demonstrated tangible results in patient satisfaction, reduced healthcare-associated conditions, and preventable hospital readmissions, to name a few.
It's expected that many commercial payers will integrate direct support for delivering care at home into their benefits.2 Some payers are actively investing in developing at-home services. For instance, Aetna has partnered with DocGo to provide mobile at-home healthcare, including episodic and emergency care for Aetna's Medicare Advantage and commercial members.3 Similarly, Humana has made a significant investment in DispatchHealth, a provider of in-home medical care.4 Other payers, home health companies, retail organizations, new healthcare delivery entrants, and technology vendors are focusing on care-at-home models to enable their own further growth.
New and nontraditional care delivery entrants are betting heavily on consumers’ growing demand for home-based care. Consider the most recent example of CVS, Amazon, and UnitedHealth Group accelerating their penetration into the home health market by submitting bids to acquire Signify Health, a company that focuses on activating the home as a key part of the care continuum and lessening dependence on facility-centric care.5 With massive companies such as Best Buy (which recently acquired the U.K.-based at-home care platform Current Health)6 and other disruptors such as Amazon investing in consumer-centric models that value self-care as the central premise to patient-focused and economically viable care delivery, the window to act on the current structural advantage is narrowing. As the number of well-funded players eyeing the home as a site of care grows, health systems risk ceding some of their historically reliable volumes and experiencing potential disruption of legacy patient-provider relationships.
Health Systems Are in a Stronger Position to Implement Hospital at Home But May Lose the Opportunity
Health systems are increasingly evaluating the role of the home within their delivery networks. For example, a few years ago, only a handful of hospital at home programs existed nationally. Now, 251 hospitals have already been approved for the Centers for Medicare and Medicaid Services' (CMS) Acute Hospital Care at Home waiver, with many others actively preparing their applications.7 In a recent survey, 78% of health system respondents indicated they have plans for hospital at home in the next 5 years, up from only 65% of respondents who indicated plans for that period just a year prior.8
Under the current CMS waiver, hospitals have a distinct structural advantage over other healthcare organizations (e.g., payers, home health organizations, retail organizations), given admissions must originate from an Emergency Department (ED) or inpatient unit for patients under the Medicare fee for service payment structure. The recent extension of the CMS waiver secures this advantage through 2024. Based on today's defined clinical use cases, as much as 25% of acute care volume may be eligible for hospital at home (estimates vary across peer-reviewed research). This volume represents a sizeable segment of market spend that could shift out of the hospital's 4 walls, not even considering future use cases enabled by advancements in technology and medicine and further evolution of the entire home-as-a-site-of-care continuum.
Although health systems are currently better positioned than competitors to move into this space, many are not prioritizing hospital at home. Health systems still may not fully appreciate the many opportunities a hospital at home capability can unlock. They may also feel intimidated by the perceived complexity of achieving sustainable economics and scale for such care models. Though hospital at home and other care-at-home models are set to be a significant disruptive force in the industry, many healthcare leaders are spending an outsized balance of their time firefighting today’s many unprecedented issues of running day-to-day operations.
This is not entirely surprising if one considers Clayton Christensen’s Theory of Disruptive Innovation, in which incumbents don’t respond to the new entrants but instead continue to focus on their more profitable segments and pay less attention to the initially less-profitable segment.9 Constantinos Michaelidis, MD, Medical Director of the Hospital at Home Program at UMass Memorial Health, explains further:
“It is hard to self-disrupt. Because our existing hospital-based delivery system is designed to focus on higher-contribution-margin surgical admissions, it is not an initial instinct for many executives to suddenly shift their attention to lower-contribution-margin medical admissions that are better served by hospital at home,” Dr. Michaelidis said. “Even if there is a good argument to be made that caring for a patient with a routine pneumonia in a home hospital program, for instance, it is simply the starting point for a much broader movement of medical and surgical care into the home.”
“This is why when you see hospital at home launch and scale successfully, it is almost always a combination of a severely capacity-constrained tertiary care hospital and a forward-thinking executive leadership team that believes the hospital of the future looks very different from the hospital of today,” he said.
As we enter an immediate post-pandemic phase and executive leadership teams are grappling with the demanding operational challenges of today, it is not surprising that longer-term transformational strategies like hospital at home are now being deprioritized—despite ample evidence that this care model is a valuable lever to address such challenges. Health systems should recognize hospital at home as an opportunity to not only compete in the future healthcare context but also as a useful tool to address current operational challenges.
Operational Considerations for Hospital at Home
As healthcare is being reshaped by nontraditional players, wisely choosing a strategic direction and areas of focus is as important as realizing that the operational challenges of the moment are not going away any time soon. As such, hospital at home models can provide several opportunities for impactful solutions that address the immediate issues facing healthcare leaders today.
| COMMON CHALLENGES for Health System Leaders | POTENTIAL IMPACT Of Hospital at Home |
|---|---|
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“Inpatient demand is high, but we don't have the capacity to quickly accommodate care.” |
Health systems can direct lower-acuity patients who need hospital-level care to their hospital at home program and backfill hospital beds with patients who truly require traditional in-hospital services. |
|
“Our ED is consistently overcrowded.” |
After the evaluation in the ED, the ED can redirect eligible patients back home to hospital at home care, improving ED wait time and reducing boarders. |
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“The labor shortage has everyone strained, and our providers are burnt out.” |
Health systems can deploy a flexible workforce as a result of a more responsive physical and virtual footprint for care delivery. Clinicians are energized and engaged by the more innovative model, which is patient- and family-centric, is progressive, and allows for better work-life balance. In turn, that increases overall satisfaction. |
|
“We continue to struggle with delays in throughput and the extensive demands of care coordination for our patients.” |
Health systems can improve throughput and reduce avoidable medical errors with technology-supported care coordination and reduced patient length of stay. |
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“More and more of our patients are seeking care in outpatient settings.” |
Health systems can orient care offerings toward consumers who are demanding more accessible, convenient, and timely care in the comfort of their homes. |
Is Hospital at Home the Right Solution for Your Organization?
Given the many opportunities to drive value, health system executives should consider hospital at home models to manage, survive, and even thrive amid their many challenges. However, the relative impact of these levers will vary by organization. Therefore, as a next step, we recommend first assessing the potential impact of hospital at home on your clinical network to determine the right time and a thoughtful approach to launching such a transformational model of care.
For example, here are some questions to consider for a hospital at home program:
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Are you experiencing acute care capacity constraints and/or ED overcrowding?
- Is the nursing shortage or provider burnout significant at your organization? Is your use of contracted labor having a material impact on economic return per episode of care?
- Are you pursuing ways to reduce your total cost of care?
- Is your organization located in a competitive market, in which you need to reach consumers by offering more convenient care options?
- Are you engaged in facility planning, such as building a new inpatient tower?
If any of these considerations speak to you, hospital at home warrants a more in-depth exploration as part of a broader strategic and operational plan. Although hospital at home is arguably the most talked about example of care at home, progressive health systems view it as a gateway to a more comprehensive and multi-modal care-at-home ecosystem that unlocks a spectrum of new models of care, such as skilled nursing facility at home and palliative care at home. As more healthcare providers realize the many benefits of bringing care to the patient's home, it stands to become another standard option for appropriately selected patients to receive care safely, efficiently, and cost-effectively.
© 2023 The Chartis Group, LLC. All rights reserved. This content draws on the research and experience of Chartis consultants and other sources. It is for general information purposes only and should not be used as a substitute for consultation with professional advisors.
