Home health services are becoming more popular, and on the surface it's easy to see why: Care is delivered inside a person's home, avoiding rehospitalization. But as health systems are starting to invest more in these types of services, staffing issues remain.
Slava Girzhel, managing director of healthcare investment banking at KeyBanc Capital Markets, has been carefully eyeing the growth of home health services and sees patient demand as one reason why insurance companies and the federal government are willing to support these kinds of models.
"It creates a link to the patients," he said. "When you have a bundled service, a patient undergoing an expensive treatment and then released to the home, home health is a way to make sure the patient is staying healthy and compliant."
Girzhel expects continued growth in the sector, and as a result he's seeing meaningful interest from various public and private sources. But with a backlog of patients, home health services are limited by their ability to attract and recruit quality staff.
"Part of the issue is certainly reimbursement related," said Girzhel. "It has limited home health companies' ability to pay living wages. There are less skilled individuals going into the home taking care of a person who can't take care of themselves. That's basically a minimun wage type of position. If they were able to pay more, they would be able to attract higher quality workers"
According to Girzhel, home health agencies need experienced nurses with the ability to work independently. "That setup is somewhat unique because they're on their own. There's no doctor nearby, there's no supervisor, there's nobody right there. It's probably for more experienced nurses. Or you have to do a lot of training, and that takes time."
That's not to say that people aren't getting hired. Susan Salka, president and CEO of AMN Healthcare, a San Diego-based staffing and workforce solutions company, said healthcare is quickly becoming the dominant employer in the U.S. economy. Of the country's 10 fastest-growing industries, healthcare sectors account for six of them -- and home health is leading the way.
Still, these professions are currently experiencing shortages, and this trend could get worse over the coming decade, said Salka. According to the U.S. Bureau of Labor Statistics, there were more than 1 million healthcare related job openings in 2015, but only 550,000 of them were filled.
"Failure to hire needed staff will threaten the viability of home healthcare services, which in turn can undermine quality gains and healthcare outcomes. A study last year in Health Affairs showed that Medicare home health reduced hospital and nursing home admissions. A 2011 examination by the Joint Commission concluded that home care, which is the preferred setting among patients, contributes to fewer sentinel events and safety issues."
The data-driven solution
With big data, predictive analytics and advanced labor management techniques, precise staff planning is now possible, said Salka. The analytics-driven approach that now powers clinical recruitment is a far cry from the Rolodex, email and phone recruiting of just a decade ago; solutions once used in the tech industry are now widely available in healthcare.
Perhaps due in part to these staffing issues, most of the players investing in home health are the big guys -- the ones who have merged or consolidated. Girzhel expects that trend to continue.
"With the bundling of our payments, you need a more diverse, continuum-of-care delivery mode, and take care of the patient more holistically," he said. "And that's good news, not bad news. That's probably how care should be delivered. Small agencies are just not going to be able to provide those types of services. Larger folks need staff, and that's driving some consolidation itself."
On the reimbursement side, Girzhel doesn't necessarily expect Medicare or Medicaid to continue to increase compensation, "but maybe progressive home care companies are willing to invest on continuum-of-care-type access. Insurance should begin to understand that supporting home health models is a way to continue to make that available and drive down net cost reduction."
Managed care companies are now investing in their own models. Humana's acquisition of SeniorBridge Home Care and Care Management serves as an example; SeniorBridge provides assessments of care management in the home, and now Humana is directly investing in that. They contract with providers, or make the investment directly.
Girzhel sees the trend continuing, but is assured that it will likely be the big players leading the charge.
"Providers need to be scaled up, and have a home care company with a broader set of service offerings tailored to an insurance company's needs," he said. "Big groups will probably get bigger. If you're contracting with insurance companies, that's a complicated relationship, so by definition you have to be a certain size."