The Future Belongs to Home Health

Amid all today’s talk about integration, collaboration and serving a wider spectrum of patient needs, there remains a fundamental pearl of business wisdom necessary to delivering any quality product or service: Before you can be good at many things, you must be good at one.

Keeping that focus and avoiding the dilution of mission creep helped April Anthony build a faltering home health outfit into a pair of multimillion-dollar companies whose services now benefit thousands of patients across the U.S.

“I think what we’ve done well is just focus,” says Anthony, who acquired her first home care business in 1992 at age 25. “You find your niche and stay laser-focused on that so you can drive exponential quality in that area. We’ve had a zillion opportunities to branch out; people are always coming at you with, ‘Hey, maybe you ought to try this!’ One of the things we’ve been good at is saying, ‘No, I think we’ll just be the best home care provider we can be.’”

That first company ultimately evolved into Dallas-based Encompass Home Health & Hospice (www.ehhi.com), which now serves around 19,000 patients a day in a dozen states. It also later spun off software provider Homecare Homebase (www.hchb.com), whose roughly 140 users chronicle around 28 million visits a year. Combined, the companies produced nearly $500 million in revenue in 2014; Anthony is CEO of both.

It’s not that Encompass has eschewed partnerships; it works with other healthcare system players in a number of productive programs. It’s more that the company holds maintaining its leading role in its field as a primary corporate value.

“I think all the things we didn’t do over the years were every bit as important as the things we did do,” Anthony says. “Instead of being an inch deep and a mile wide, we were a mile deep and an inch wide, and really focused on how we could become excellent at what we do so we could build demand for our services and the quality of our product. Some companies diversify themselves into so many different silos, they aren’t really great at any of them. We didn’t try to be all things to all people. We knew who we were, stuck to it and perfected it in such a way that we gained a reputation as being the best in our niche.”

Transition and Community Care

That means keeping patients at home, or at least from requiring ever-increasing levels of institutional care. Encompass approaches that in several ways.

Alongside providers of skilled nursing and therapy services, the company’s home health workforce includes medical social workers who can help address patients’ social and emotional factors and refer them to counseling and other community resources. Beyond that it operates specialty programs focused on areas like care transitions and working with both independent- and assisted-living facilities.

The Care Transitions Program is intended to ensure continuity of care when a patient comes home from another care facility. Encompass providers handle all paperwork and coordinate subsequent care with primary physicians; coordinate the delivery of equipment and services; review medications; evaluate the home for safety risks and health concerns; and follow up with the patient within a day or two of their return to ensure all is well. They also help the patient communicate any other needs and get them met.

The Community Care Program helps residents of independent-living and assisted-living communities stay where they are, delaying the need for a nursing home or other more-comprehensive care. Encompass providers visit these institutions to offer help with disease management, therapy and wound care for fragile patients, and can work with staff to help them recognize changes in patients’ conditions.

“Home care can easily come in and be an ancillary provider in those types of environments,” says Anthony. “Independent living is really nothing more than an elderly community—there’s no care being provided, so home health agencies can come in and provide nursing and therapy services to those residents just like they could in an apartment building or private home. We can do the same thing in assisted living, but we can’t duplicate the services already being provided.”

The overall migration of sick people to less-intensive environments creates these kinds of opportunities, Anthony notes.

“Everything’s sort of moving downstream,” she says, “which is raising the demand. The need for home care services to keep those residents safely independent in those settings is essential. Elderly patients don’t want to end up in nursing homes, and they’ll do whatever they can to stay in their assisted-living-type communities. So we’ve found a real niche where we can provide a great service for the residents and a great benefit to the facilities by helping maintain those residents in place.”

There are no up-front costs for Encompass in this; it’s just a service provider that visits the facilities. But as the facilities benefit from keeping their residents who might otherwise move on to higher-level care, it’s a win for them too, as well as a savings to Medicare and Medicaid, which don’t reimburse assisted living.

The Future of Home Health

The larger trends influencing patient care strongly favor home health. The average cost of home care to Medicare is around $50 a day—a fraction of other settings.

“There’s no doubt that at $50 a day, home care’s going to have to be an important part of the solution,” says Anthony. “Look at the wave of baby boomers who have just now begun to turn 65. The average patient in home care is 79. As these people age, we’re going to see this huge wave of baby boomers, and as we approach that peak, we’ll really have no choice but to reenvision the way we deliver care to these people. Home care is right at the sweet spot of that, because we’re the only viable solution from a cost perspective, and frankly, you couldn’t build enough beds to institutionalize the care of all of those people if you started right now!”

That portends a substantive opportunity for home care to help change the paradigm of healthcare delivery, and do it in a way patients prefer. “There’s not a single patient I can think of,” Anthony adds, “who’d choose to go to a hospital rather than have the nurse come to them at home.”

Company Metrics

Encompass

• 5,600 employees
• 19,000 patients seen daily
• $405 million in 2014 revenue

Homecare Homebase

• 140 customers; 70 of largest 100 home care providers
• 28 million visits a year tracked
• $80 million in 2014 revenue

Take-Home Points

PAYERS—Medicare costs for patients at home are a fraction of what they can be elsewhere.

HOME HEALTH—Patients prefer to remain at home; the right services can help enable it.

ASSISTED LIVING—Home health can help keep patients in ALFs, out of nursing homes.