In challenging economy, home health still growing
August 6, 2012By Jenny Callison
A swelling older adult population and cost-cutting changes in the health care industry mean growth opportunities for providers of home-based health care.
Three Wilmington-based companies are well situated to benefit as more post-acute patients recover at home, and more elderly people choose to age in place.
Well Care Home Health and Home Care, whose services are concentrated in southeastern North Carolina, acquired an underperforming home health care agency in Raleigh in March, giving it a strategic presence in the Triangle.
Liberty Home Care & Hospice Services operates 30 offices in central and eastern North Carolina, southern Virginia and northeastern South Carolina.
And Monarcares, whose online program allows caregivers to track and manage their aging loved ones’ needs, has finished its beta trials and is ready to offer its services commercially.
“Home health care and hospice will be a growing market as baby boomers get older,” said Glenn Wells, director of business development for Liberty Home Care. “Staying well is important. Our average patient now is 82, thanks to better procedures, better medications and shorter hospital stays.”
Wells explained that short hospital stays are not necessarily a bad thing. “A short stay keeps costs down and prevents infections,” he said.
Recuperating at home is also less expensive than doing so in an institutional setting.
“If somebody has to have a registered nurse 24 hours a day in their home, it is actually less expensive than going into the hospital,” Well Care CEO Wayne Long said in a
prepared statement.
Skilled intermittent care, with a visiting nurse or therapist, can now be complemented with technology, such as telehealth equipment in the home.
“Our telehealth program monitors vital signs daily,” said Wanda Coley, Well Care’s chief operating officer. “For instance, if a chronic heart failure patient’s vital signs fall outside normal parameters, we can do triage.”
Key to a successful post-hospital recovery at home, however, is preventing the need for a readmission. That means teaching the patient and family member or caregiver how to provide the right care. It also means guarding against the two primary reasons for hospital readmissions: falls and medication interference. Wells said that his company’s home health providers review all prescription and over-the-counter medications in a patient’s home.
The fact that provider networks are increasingly sharing patients’ medical information – such as what prescriptions they are taking – increases the effectiveness of home health care, Coley said.
Sharing information electronically within a personal network is the name of the game for Monarcares. The web-based system, born from the first-hand experience of owners Robert and Charlotte Rosenberg, is designed to enable one or more caregivers to coordinate and manage their loved one’s medical, legal and financial affairs, even at a distance.
“Monarcares broadens the caregivers’ reach, creating a circle of care,” Robert Rosenberg said. “Various members of the circle are involved in different aspects of care monitoring.
It’s a ‘village’ mentality.”
Despite all the apparent growth opportunities in the home health industry, significant challenges loom, most related to supply, demand and reimbursement.
Both Well Care and Liberty Home Care are certified agencies, qualifying them for Medicaid and Medicare reimbursement, which means that they must operate within pertinent federal and state guidelines that exist to control costs. The companies can grow only by acquiring an existing certified agency, as Well Care did in March, or by a successful application to open a new location when state regulators allow for additional services to be provided in a specific county or metro area.
In North Carolina, the Division of Facility Services determines where need for home health care exists, based on population growth and related data, when looking to grant a so-called certificate of need that providers vie for by applying to the state.
“We had an opportunity in March in Raleigh,” Coley said. “We had wanted to get into that area because it is contiguous to our current market. The state now shows a need [for home health care] in Wake County. In 2013 or 2014, there will be a need in Forsyth County, and there will be a need for two home health agencies in Charlotte. Brunswick County is close to having a need.”
Costs to operate a home health agency rise with staffing costs and other business expenses. Yet Medicare and Medicaid reimbursements are limited, and might be further reduced because of besieged state budgets and, possibly, provisions of the federal Affordable Care Act.
“What concerns me is that there’s a finite amount of money that government pays or people pay out of pocket to an insurer,” Wells said. “As more people demand [home health care], how will they be paid for? Do we provide fewer services? Will there be fewer innovations?”
“To reduce costs, you have to have economies of scale,” Coley said. “Changes – reductions – are coming in reimbursement. You have to have opportunities to spread out fixed costs, which means serving more patients in different markets.”
