This is the golden age of older people. Between 2020-2060, the number of people age 65 and older is expected to skyrocket from 56 million to nearly 95 million, amounting to a whopping 69% increase.[i] Ask older Americans (ages 50-80) where they want to live as they age, and 88% say they prefer aging in place, living in their own homes for as long as practical.[ii]
To support this challenge and opportunity, key stakeholders ─ including providers, agencies, insurers and others ─ must adopt emerging digital technologies. Virtual care is poised to offer proven solutions that fundamentally change the traditional post-acute care patient journey, increasing convenience and access and the potential to improve cost and outcomes.
Let’s briefly examine the facts fueling four big “aging in place” market trends: Preparing for HHVBP quality measures in 2023, the growing home health segment, expanding patient acuity, and the significant home health labor shortage.
Value-based purchasing is coming. Are you prepared?
Kicking off Jan. 1, 2023, home health agencies’ performance will be subject to the expanded Home Health Value-based Purchasing (HHVBP) Model. This approaching year is all about collecting the required quality measures for which, in turn, will impact year 2025, HHVBP’s first payment year.3
The HHVBP Model is modeled after the CMS hospital readmission program in which funding is based on how well the organization ranks relative to its peers. Under the expanded initiative, agencies receive adjustments to their Medicare fee-for-service payments based on their performance against a set of three quality measures relative to their peers’ performance: the Outcomes and Assessment Information Set (OASIS, ED and hospitalization claims and Systems (HHCAHPS) surveys.
The quality measures are used to calculate home health agencies’ performance. In a payment year, reimbursement can increase or decrease up to 5%, depending on how organizations perform on a combination of operational, utilization (ED and hospitalizations), and patient experience. Most home health agencies are rated “in the middle” with 3 or 3½ stars being the average rating across the 7 measures.4
Increasing demand for home health
Analysts estimate the size of the U.S. home health market at $120 billion in 2022. The home health segment is growing faster than the economy overall, notes IBISWorld.5
Through 2030, the market is expected to expand by a compound annual growth rate of 7.9%. Talk about an increase in aging in place.
Not too many years ago, home health was seen as the care setting after a post-acute care facility such as a rehabilitation center or a nursing home. With value-based care and bundled care options, however, more acute-care discharges are directly home — with the personnel and ancillary services that home health can provide.
Rising patient acuity
Even before the pandemic, the Centers for Medicare & Medicaid Services (CMS) was actively working to divert patients from nursing homes and acute care facilities to the home. As a result, home health agencies have seen a shift in payer mix, away from private insurance and more toward Medicare and Medicaid, which reimburse at significantly lower rates than private insurance pays.
Traditionally, Medicare home health users are older, sicker, frailer, and poorer than Medicare beneficiaries overall, according to the Alliance for Home Health Quality and Innovation.
Medicaid patients and dual-eligible patients often have complex medical and social determinants of health needs. In fiscal year 2020, Medicaid spent $116 billion on Home and Community-Based Services (HBCS), serving 3 million Medicaid recipients through waiver programs and 2.5 million as part of the state plan benefit package. The latter group primarily received home health and personal care services.6
While expanding the universe of potential home health recipients, HBCS waivers can create staffing and care challenges for agencies.
Worsening staffing shortages
A 2022 survey of home health operators found that 80% said staffing was their biggest non-COVID-related challenge. Nearly 6 in 10 said recruiting was their main concern for the foreseeable future, while 32% said staff retention was a concern.7 It’s no wonder, then, that the home health industry’s rejection rate in January was 58%, significantly higher than the 42% rejection rate routinely seen prior to the pandemic.8
According to the Bureau of Labor Statistics (BLS), home health agencies will need to find nearly 1 million additional home health and personal care aides by 2031 — in addition to replacing those who leave. Job growth of 25% is seen over the decade, which the BLS categorizes as “much faster than average.”9
We have a unique opportunity
Expectations are high for home healthcare stakeholders. These primary “aging in place” trends reveal a growing appetite for solutions that enable older adults to age in place. We have a unique window of opportunity for digital-driven transformation to close inequity gaps and actually provide better and more affordable care delivery services.
This shift in the post-acute patient journey has been coming for a long time. In my next blog we will explore specifically how digital technologies can bring accessible and scalable care support digital solutions into the homecare setting.
Krishna Kurapati is the founder and CEO of QliqSOFT. He has more than two decades of technology entrepreneurship experience. Kurapati started QliqSOFT with the strong desire to solve clinical collaboration and workflow challenges using artificial intelligence (AI)-powered digital technologies across the U.S. healthcare system. He is actively involved in early-stage financing of startups in both the U.S. and India.