Home-based healthcare can deliver better outcomes, at lower cost, and with a better patient experience. Technology exists to enable the most sophisticated solutions, yet, post-pandemic adoption of virtual services, including hospital at home and many consults, has waned. The challenges seem to be a mix of reimbursement, policy and cultural expectations.
Traditional home health services such as home health aides providing support around activities of daily living have historically had low reimbursement, relative to the value they can provide. However, conversely, many providers are reluctant to deliver virtual services at prices that may undercut their traditional in-person and facility-based services.
Like many changes in healthcare, government programs often lead and policies around virtual services have yet to be clarified or agreed.
Culturally, there is inertia toward change away from in-person and facility-based care. Individuals, particularly seniors, may find visiting a doctor's office comfortable and appealing.
Given this backdrop, payers have a unique position to address reimbursement and consumer behavior through network, benefit design and consumer engagement.We believe payer leadership around home-based healthcare starts with four key imperatives.
- Expand the definition of home-based
health
Home-based health includes any service that can be delivered in an individual's home setting, including traditional home health aides, hospital at home/remote monitoring, virtual services, home delivery and house calls. It is important to view these services holistically aligned to consumers' perspectives and maximizing value through integration and coordination. Remote monitoring needs to connect to virtual consults, and potentially in-person house calls, to achieve the expected outcomes. Too often siloed perspectives of a single dimension of home-based services, e.g., virtual consults, results in marginal value without an expanded vision of the possible.
- Align home-based delivery to value
Payers need to align internally against specific member segments to drive the intended value. First, payers should work across internal silos to achieve the needed integration. For example, care management may coordinate home health workers for post-acute care, while Network manages virtual visits and IT may manage technology vendor solutions, and in some cases, Clinical teams manage owned assets (certainly with provider-owned plans). Consumers expect integrated delivery, and to maximize the effectiveness of home-based delivery, these teams need to work together. Second, payers need clarity on the value being delivered to specific members. In some cases, the value is about access and prevention, and in others, it is about price point. For the highest need members, integrated payer-sponsored clinical models, inclusive of many home-based components, have proven successful. The value proposition in these cases is managing total medical cost, reducing in-patient days and ER visits. For these members, integration is critical. For another segment of members, in-home delivery of certain services as alternatives to facility-based and in-person visits provides equal quality at greater convenience and lower cost. A few examples may be in-home infusions, virtual physical therapy, virtual primary care consults, cardiac rehab, and hospital at home. In these instances, payers may need to facilitate the interaction of home-based services with the broader network in order to make it work. Value of in-home services is not uniform and clarity of how value can be realized will drive decisions on how to deploy services most appropriately for the right populations.
- Enhance network
With an expanded view of in-home health services, many payers will find multiple contracted providers and vendors already supporting various components. Some of these partners may be overlapping, in competition, or adding little value. Rationalizing the provider landscape is a first step. Second, contracting with a view toward in-home options can align incentives. It is insufficient to add virtual option price points that only drive providers to use traditional channels at higher reimbursement. The lower cost to deliver virtually is undeniable, yet pricing can be a challenge. Payers must work with their network providers to share in the lower cost or provide alternatives that can deliver that lower price point. Payer promoted or owned assets delivering virtual options can address some of these cost opportunities by creating alternatives as well as addressing access issues in rural areas. This is rarely a network only answer, rather it will require care management, network, and often IT, Product and/or strategy and corporate development teams to address.
- Engage members
Demand pull from members can be one of the best catalysts for change. In many cases, awareness of in-home options is lacking. Payers need to develop promotion and engagement plans and tactics to drive awareness and make utilization of in-home services seamless. Benefit design can also contribute to adoption with lower cost share for targeted services.
There is likely more than $300 billion annually that can be shifted to in-home delivery while delivering better customer experience and equal or better clinical quality.1 Payers, especially provider owned payers, are uniquely positioned to drive further adoption and acceptance of in-home services given existing financial incentives. The time is now to start executing more effectively to capitalize on emerging technology and the value promise of in-home services.
Footnote
1. A&M Analysis, Robert Pearl and Brian Wayling, "The Telehealth Era is Just Beginning", Harvard Business Review, May-June 2022 The authors estimate 15 – 20% reduction in overall healthcare cost with marked improvements in quality and access to care
Originally published 28 August 2024
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