COVID-19 woke up the home health industry — and the health care sector at large — to a lot of problems that were lying beneath the surface.
Providers spent last year attempting to adapt to an evolving landscape, but also saw new opportunities arise after health care systems in the U.S. were caught with their “pants at their ankles” when things went awry, Bill Miller, the CEO of WellSky, told Home Health Care News.
“We weathered it. And in some ways, it has created tailwinds,” Miller said. “It’s created some opportunities for us because I think it has woken our country up to how the home can be a landing spot to take pressure off of health systems.”
The opportunities are also related to “dealing with more patients at home, in general,” he added.
Overland Park, Kansas-based WellSky offers technology solutions, analytics and services to post-acute and community care providers. Its clients include home health, hospice and personal care agencies, among other operators.
WellSky recently acquired CarePort — a platform that helps health systems and hospitals connect with post-acute care providers — for $1.35 billion. It was a company that Miller had his eyes on for years, and one that he thinks will help WellSky continue on its path of annual double-digit growth.
That acquisition aligns with one of the major shifts that has taken place in the last year: seniors wanting to avoid the hospital at all costs. WellSky’s goal is to leverage its data and analytics to help bridge the gap between health systems and post-acute providers.
“We’re trying to put science back into the discharge process,” Miller said. “What I would argue has been happening historically is that the discharge process has largely been a function of convenience, history and contracts — and not science.”
In other words, if more was known about the patients, their next location may be altered. With more information, a patient that normally would be sent to a nursing home may go straight into hospice, for instance.
And if discharge goes the way it should, home health providers could benefit.
The precursor to COVID-19
Once COVID-19 hit, the Patient-Driven Groupings Model (PDGM) was put to the side — at least for a while.
But the post-acute providers that geared up for PDGM — which, in design, ties reimbursement to patient characteristics and complexity — may have been more prepared than those that did not.
“With PDGM, that actually drove some adoption because people knew they had to have a better system to adapt to it,” Miller said.
The legwork put in on the front end positioned providers in a place where they could deal with the strain that COVID-19 put on their businesses.
“That created more sophistication in the system, in general,” Miller said. “When you could ensure that you were going to get paid as fast as humanly possible under the new payment model, you [subsequently] could weather the storm of the decreased volume that ultimately happened in March, April and May.”
The fastest growing businesses
WellSky works with a lot of health care providers, but it’s home health, hospice, home infusion and personal care provider clients are among the fastest growing, Miller said.
“That’s representative of investment coming into the space and the opportunity,” Miller said. “And, frankly, the regulatory changes are helping as well.”
More capital is flowing into the home health space. Private equity and venture capital leaders have set their eyes on home-based care as a market worth investing in.
That’s likely to be a tailwind for operators in 2021, as is the precarious position that hospitals find themselves in.
As hospitals sign value-based agreements with payers moving forward, they want to make sure that they’re keeping their eyes on patients throughout the care process.
“Hospitals can have a perfect experience while they’re doing the knee operation or a heart transplant and be on an economic path where they’re going to get paid [well] on a value-based contract,” Miller said. “And then they discharge [their patients] into the wild, wild west and they don’t have any visibility. They can’t control what happens and they can’t guard against readmissions, which would hurt their profitability in any transaction or episode.”
That’s where the home health providers step in.
They can enter into agreements with health systems in order to ensure that each patient is being taken care of and that the hospital is not losing money based on what happens after they leave an institutional setting.
“That’s why they’re wanting to look downstream,” Miller said. “Of course they want their patients to do well, but it helps that they also will do better economically if they do.”