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Greater Market Share for Home Health: Challenges and Opportunities

    The Medicare Payment Advisory Commission’s (MedPac) July 2022 data revealed that the home health industry gained a more significant share of post-acute care admissions following the COVID-19 pandemic onset. This confirms the assumption that home health agencies were gaining more patient admissions that may have previously gone to skilled nursing facilities (SNFs).

    The Shift to Home Healthcare

    MedPac’s data highlighted that the share of inpatient hospital discharges referred to SNFs declined to 16.6% by March 2020 at the onset of the COVID-19 public health emergency (PHE). By October 2020, it decreased further to 14.9%. On the other hand, the share receiving home healthcare services increased to 20.9%.

    This change was mostly due to the challenges that SNFs faced throughout the first year of the COVID-19 public health emergency. According to the COVID Tracking Project, nearly 1 in 10 nursing home residents had died of COVID-19 as of March 2021. This whole scenario illustrated the experiences of SNFs in the face of the pandemic and the reluctance of beneficiaries to utilize them.

    Despite the reality, many NSF operators still held out hope that trends would readjust once the COVID-19 situation would normalize.

    The Struggle to Meet the Demand

    According to MedPac, the number of home health agencies in the U.S. declined despite the increasing demand for their services. In 2021, there was a 0.8% decline in that there were 91 fewer agencies than there were in 2020, which actually has been ongoing since 2013.

    Even if the market share for home health providers has been growing, care was still disrupted. MedPac wrote that total spending declined by 4.7% and beneficiaries using home health care declined by 7.3%. In addition, the number of beneficiaries declined by more than the drop in total spending, which means the average payment per home health user increased by 2.8% in 2020.

    Leveraging Support Solutions

    Various studies and data reveal a very strong demand for home health despite the intimidating changes in care delivery standards, payment mechanisms, and staffing challenges. Home health businesses need to find the right strategy to take advantage of these growth opportunities. The key is to leverage available support solutions to gain focus on the main objectives for patient care and business growth. Partnering with an outsourcing company that can cover operational and administrative functions is an effective way to maneuver through the home health landscape successfully. This way, in-house clinicians can hone in on delivering quality patient care.

    See MedPac’s July 2022 Data Book, Section 8: Post-acute care >