Seven guided questions for strategic planning. Six external trends for home care companies to keep an eye on. 10 challenges ahead for home care companies.
We explore how your organization can strategically plan based on predictability, and how your organization can respond effectively with flexible and agility to move quickly based on evolving trends. Important to both plans is an external and internal approach.
By: Lisa Remington, President Remington Health Strategy Group, Publisher The Remington Report
Developing short and long range strategic plans for home care companies can be complicated and complex by changes impacting the healthcare delivery system. Strategies for short and long-term plans can be accomplished by assessing clear trends that are driving a more predictable future in healthcare, and developing a plan to keep ahead of evolving trends that impact the future.
In this article,
Identifying “Predictability” Falls Into Two Broad Areas:
1) How healthcare’s infrastructure and payment reform support the move into value-based payments.
2) How dynamics of provider relationships are creating a clearer roadmap.
How Healthcare’s Infrastructure and Payment Reform Support the Move Into Value-Based Payments
The roadmap transforming the healthcare delivery system takes shape with five key examples affecting home care company’s future.
- Payment reform transitions to support value-based care models. The healthcare infrastructure and payment reform is accelerating value-based care payment models from fee-for-service. Provider readiness for value-based care is across the industry. For example, the home care industry is preparing for payment reform that replaces therapy-driven payments, the reduction of 60-day episodes of care to 30-day episodes of care, and home health value-based purchasing. Physician reimbursement under Advanced Alternative Payment Models (APMs) is incorporating risk to drive lower costs and an increase in quality. The final rule for Medicare Shared Savings (ACOs) accelerates timeframes and shared risk and reward in the future. The talk of mandatory bundled payment models is back on the agenda. Medicare managed care is embracing alternative payment models, and more cost-effective payment models. Health systems are preparing for greater competition and more risk by expanding the scale of their organizations.
- Physicians moving into more risk/reward payments. The shift from voluntary participation to mandatory payment models under MACRA is here. In 2019, expect to see more physicians participate in APM models. An Alternative Payment Model (APM) is a payment approach that gives added incentive payments to provide high-quality and cost-efficient care. APMs can apply to a specific clinical condition, a care episode, or a population. Examples of an APM are accountable care organizations, bundled payment programs, or patient centered medical homes. MACRA and APMs are game changers. Medicare, Medicaid and managed care organizations are moving quickly to support APMs. 34% of total U.S. health care payments made in 2017 were tied to alternative payment models (APMs) such as shared savings, shared risk, bundled payments or population health payments.
- Population Health Models Begin to Accelerate. Population health takes a broad look at the management of outcomes. Components includes lifetime health, disease prevention, promoting health and wellness, and a focus on determinants of health. It’s the model where all providers are at risk/reward and the true Rolls Royce of a value-based payment model where the patient is at the core of care.
- The Changing “Care Continuum Ecosystem” for Payors, Providers, and Insurers. The playing field for payors, providers and insurers is leveling out. The common goals each have are indicators of how home care companies will be developing partnerships and how they will need to build their internal infrastructure to effectively respond.
- More patients moving into Medicare Advantage Plans. The support to move Medicare fee-for-service benificiaries into Medicare Advantage plans is well thought out. The payers are offering expanded benefits. The recent announcement of five new physician models will move about 11 million Medicare beneficiaries into Medicare Advantage Plans.
It’s important to keep this in mind: How can your organization create a plan of action around predictability tomove into value-based care. For example: how will your organization shift from fee-for-service to value base models? How does this change the culture of your organization? What operational and financial changes need to occur. What technology investments become the most important? If you take the action from other stakeholders such as ACOs and physicians, they are funding value-based models through risk-shared contracting. That's how the leap from fee-for-service to value-based care is being funded.
Nine Key Ways the "Care Continuum Ecosystem" is Changing
All providers, payers and insurers are on the same page
- Social determinants
- Population health
- Behavioral health
- Wellness vs. illness
- A revenue shift from inpatient to outpatient
- Investments in technology
- Shift to value-based payments and models
- Shift from Medicare fee-for-service to Medicare Advantage Plans
- Building continuum of care models
The “ecosystem” of value-based care is firming-up into four key areas. Behavioral health, social determinants, population health, and managing the chronic care population. Technology investments in clinical support systems, predictive analysis, artificial intelligence, EHRs, data analytics, remote patient monitoring, digital technology, and complete suites of software solutions are important for home care organizations to consider.
How the Dynamics of Provider Relationships Are Creating a Clear Roadmap
The industry market signal for all providers is the movement from “siloed” care management to integration across the continuum. This requires a relationship based on risk-sharing, clinical integration, and an increase in preferred provider relationships. Providers to work together to manage quality, cost and outcomes. Here are a few examples.
- Payor and Health System Relationships. Health plans are forging closer relationships with health systems to share risk and partner in value-based payments. In turn, this means health systems will need to have a strong continuum of care model. The impact of a value-based model for health systems and physicians is a full “cradle to grave” care model within a fixed premium payment (eg: shared-risk, capitation, or global payments). To better control outcomes, more focus will be on population health. The financial pressures of readmission penalties, ED visits, and managing length of stay requires a more intensive look at population health. At the top of the list is managing chronic illness, social determinants of health, and the shift from illness to wellness. Innovative partnerships will re-think how providers across the continuum can work together to manage quality, cost and outcomes.
- Payors and Home Care Companies. The blurred lines between payors and providers will continue in 2019. The deals we saw in 2018 were about market positioning for payors to either merge or acquire companies to develop a post-acute care continuum strategy. It was also a signal that payors are investing in population health management models especially in chronic care. Payors will continue to seek out home care companies as partners for Medicare Advantage strategies. Eighty-six percent of all healthcare spending is on people that have multiple chronic conditions, and payors understand a lot of those multiple chronic conditions can be cared for in sites that are outside of hospitals.
- ACOs and Home Care Companies. The recent rule for Medicare Shared Savings ACOs to take on more risk signals a few things for home care companies. ACOs will partner with more home care companies, or they will build-out their own care management models and sub-contract out home care company’s services. Next Generation ACOs, the model at most risk, can use telehealth and post-discharge home visits. As the risk side accelerates for ACOs, a care continuum strategy to manage quality, cost and outcomes becomes a key strategy.
- Medicare Advantage Plans will continue to grow and provide greater supplemental benefits. Over the next few years, expect to hear more announcements about expanded supplemental benefits under Medicare Advantage Plans. CMS’s CMMI is testing hospice benefits, telehealth, and wellness and health care planning. This is driven by The Bipartisan Budget Act of 2018.
Securing Your Future: Effective Responses to the New Paradigm
Flexibility and Agility Reponses
As other stakeholders transform their organizations into value-based care models, how flexible is your organization to respond? Do you have internal strategies in place to meet the new demand? Is the culture of your organization based on accountability? How can you “hedge” the workforce shortage by increasing technology? What is the plan to move into greater risk?
Below are examples of seven guided questions for strategic planning.
- Is your organization prepared for risk-shared models? At the very top of the list is: does your organization understand the total cost of care per patient? You can’t take on risk, if you don’t know what your risk is.
- Does your organization have the right technology solutions in place to evaluate your risk? Stakeholders that have increased risk will have expectations of working with organizations to partner on shared risk.
- How is your organization responding to the changing landscape of value-based care? Is your organization prepared to partner with a changing care ecosystem?
- Is there a conscious effort to stay small, or expand your geographic footprint? Scale/size matters. Value-based payments require scale to undertake quality initiatives that incorporate standardized clinical processes and to eliminate variations. It’s a competitive move to future partnerships.
- Are service lines and quality measures aligning with other stakeholders? Review your service lines. Are they in alignment with referral sources? Volume matters. Eliminate service lines that do not create enough volume.
- How is your organization expanding value and new models of care to contract with payors? How are future partnerships based on risk-sharing, clinical integration, technology and data analytics? How is your organization “de-risking” the risk for payors? What’s your value proposition?
- Has your organization identified key technology investments in your strategic planning? For example, is your organization looking to invest in: clinical support systems, predictive analysis, data analytics, remote patient monitoring, EHR, digital technology, and complete suites of software solutions? This is the new era of technology for sustainability. What leading-edge technologies for population health, care coordination, data management and analytics will competitively drive your organization?
Six External Trends For Home Care Companies To Keep an Eye On
Included in your strategic planning are trends to keep an eye on. Here’s a few examples.
- Expanded requirements/payment reform for social determinants.
- Mandatory bundles vs. volunteer.
- Greater supplemental benefits under Medicare Advantage.
- Alternative payment models (APMs) accelerating value-based payments.
- ACOs – expecting shared-risk models
- Partnerships between payors and providers based on accountability and risk.
10 Challenges Ahead For Home Care Companies:
- Shared-risk contracting
- Market share and positioning
- Performance improvement
- A culture of accountability
- Consolidation/mergers and acquisitions
- The IMPACT Act
- Moving from fee-for-service to value-based care
The evolving market signal for all providers is the movement from “siloed” care management to integration across the continuum. This requires a relationship based on risk-sharing, clinical integration and an increase in preferred provider relationships. The healthcare industry’s common goals is for providers to partner on managing quality, cost, and outcomes.
The clear market signals represents a paradigm shift for home care companies to explore new ways to deepen the value of their services, optimize efficiencies, reduce the cost of care, invest in technology and focus on quality and patient outcomes. Participating in risk/reward models is key to future sustainability.