As more care moves into the home setting, more hospitals and health systems are throwing their hats into the ring.
Coupled with the entry of more payers into the space, the influx of health systems into home health, hospice and community-based palliative care stands to change the competitive dynamics in markets nationwide.
This is the last of three articles that explore some of health care macro-trends that could impact hospices. The first addressed the intersection of hospice care, behavioral health and chronic disease management, and the second focused on the rise of managed care.
California-based Kaiser Permanente, one of the nation’s largest integrated health systems, is among those making big investments in the home setting, including hospice and palliative care.
The nonprofit in 2021 consolidated its home-based care services in Southern California and Hawaii into a single division, branded as Care at Home, with Vice President Angel Vargas at the helm. The division offers home health care, palliative care and hospice in addition to high-acuity services like hospital-at-home.
“We continue to focus on growth and becoming a reliable alternative to the hospital setting in any way regulatorily possible,” Vargas told Hospice News. “Our growth path is still there. We’ve had near double-digit growth over the last two years in volume.”
Initiatives like these allow health systems the opportunity to not only capitalize on the growing demand for home-based care but also to address a more comprehensive range of their patients’ health needs in the setting that many of them prefer, Vargas explained.
The “3 Cs”: Care Continuum, Coordination, Capacity
By 2050, adults 65 and older in the United States will comprise an estimated 88 million, representing 22.1% of the country’s total population, according to a 2015 report by the U.S. Census Bureau.
The vast majority of these will have multiple chronic conditions and, within our current system, will likely be high utilizers of hospital- and facility-based services.
The number of seniors in need of specialized, high-acuity inpatient care is anticipated to climb by 17% during the next decade, according to recent research from Vizient and subsidiary Sg2. Outpatient volumes will grow as well, by 16%, the research indicated.
This not only drives up health care costs, but it also strains hospitals’ limited capacity — particularly in a time of ongoing labor shortages. This paradigm flies in the face of patients’ wishes. As early as 2011, more than 90% of U.S. seniors indicated that they wished to age in place in their residences, AARP research found.
“From what I’m seeing from the major players, they also realize that home is the future. I think there’s still a little resistance from the fee-for-service hospitals, and that makes sense,” Vargas said. “But I think due to the capacity crunch, more and more will be coming. It’s better than having people receiving care in their homes rather than waiting for hours or being boarded. I think everyone’s gonna go into the home care space.”
From what I’m seeing from the major players, they also realize that home is the future … I think everyone’s gonna go into the home care space.
One of the biggest motivators for hospitals is to expand their continuum of care, which further complicates the competitive environment for legacy hospices — both in terms of market share and staff recruitment.
Case in point, earlier this year the Adventist Health system last summer expanded its hospice footprint to Mendocino County, California.
Also last year, Hoag Memorial Hospital Presbyterian formed a home care and hospice venture, branded as Hoag at Home.
Going back further, Wisconsin-based Aspirus Health System expanded with hospice and palliative care programs in Michigan’s Upper Peninsula. That same year EmpRes Healthcare subsidiary Eden Health began offering hospice and palliative care in Idaho Falls.
Health systems are heading into the home by a number of pathways. Some have launched their own completely new programs or reorganized an existing suite of services, whereas others have pursued acquisitions or joint ventures.
Among the highest-profile acquisitions was the hospital system HCA Healthcare’s (NYSE: HCA) $400 million acquisition of an 80% stake in Brookdale Senior Living’s (NYSE: BKD) home health and hospice segment in 2021.
HCA later sold a portion of the former Brookdale assets to LHC Group, which, in turn, the UnitedHealth Group (NYSE: UNH) subsidiary Optum acquired for $5.4 billion earlier this year.
Additionally, Texas-based St. David’s HealthCare, which was formed through a partnership between HCA and two nonprofit organizations, recently launched a new home health and hospices business, branded as St. David’s HealthCare at Home and St. David’s Hospice & Family Care.
“When other health care systems invest in services like hospice care, everyone benefits,” David Huffstutler, president and CEO of St. David’s HealthCare, told Hospice News in an email. “It allows us to discharge patients when they are ready, and enables patients to choose a setting in which they are most comfortable – whether that’s in an assisted living facility or their own home.”
By: Hospice News
