What’s on the horizon in home healthcare?

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HIMSS checked in with two Healthbox subject matter experts—Jeff Ries, managing director, strategic investing, and Evan Cohen, associate principal, strategic investing—for a Q&A about the latest developments in home healthcare.

Note: This interview was conducted prior to the COVID-19 outbreak.

What’s your focus at Healthbox as it relates to home healthcare?

Evan: Healthbox is an innovation and digital strategy consulting firm as well as a venture fund. At Healthbox, Jeff and I are part of the team that manages a venture fund that invests in healthcare services and technology companies. As more care shifts to the home, we are looking to identify leading solutions that can enable high-quality care that lowers costs and improves the patient experience.

A lot of venture capital money flowed into the home care space over the last five to seven years. How have those companies fared?

Jeff: There are many segments in the home healthcare space, ranging from non-skilled caregiving to hospital care at home. In the non-skilled home care segment, several new players—including Honor, Hometeam and HomeHero—entered the industry around 2013 and 2014, betting it was ripe for change and filled with potential to improve experiences for families, caregivers and healthcare professionals. Each company attempted to disintermediate the market by selling directly to families and undercutting home care agency pricing.

However, in 2015, the U.S. Department of Labor upheld a federal rule requiring home care workers to be treated as W-2 employees, which eliminated new entrants’ pricing power achieved through 1099 contracting. As new entrants pivoted their labor models, they moved to align with health systems under the belief that better technology would thaw existing alliances with incumbent agencies.

While HomeHero decided to shut its operations in 2017 (its technology was acquired by Family Directed in 2019), Honor and Hometeam pivoted into technology-first businesses supporting the existing home health agency infrastructure. Honor shifted to support the back-office duties of small to mid-size home care agencies, while also managing their growth strategy.

Hometeam, now named Vesta Healthcare, partners with health plans and home care agencies to empower home caregivers with technology to monitor their loved ones and refer to the company’s clinical workers when appropriate. While Vesta is in the early stages of its pivot, Honor has demonstrated traction in the small to mid-size agency market.

Evan: What was realized was the difficulty of displacing robust incumbent relationships with health systems and home care agencies. This led to a pivot to sell solutions for the marketplace rather than an orientation toward displacing existing incumbents. It’s interesting that the three companies all still exist, albeit with different characterizations than when they came into the market.

What types of innovation show the most promise to advance non-skilled and skilled home healthcare today?

Evan: Educational tools are key in order to upskill nurses and non-clinical caregivers and decrease turnover.

CareAcademy is one example; they’re a company that provides a digital training platform for home care agencies. The platform includes evidence-based online classes, as well as real-time tracking and reporting tools designed to meet state mandates, assessments and certifications. The solution covers 100% of the compliance and regulatory burden for state and federal employer-mandated learning.

Another example is IKONA Health, a virtual reality (VR) solution that helps post-acute care organizations and senior living communities prepare, educate and train their workforce through five to 10-minute training modules delivered in an immersive VR approach.

Jeff: Outside of those employed by home health agencies, there are others that focus on care delivery at the front lines by addressing family caregiver burnout. Family caregiving is particularly important, given the fact that the home care industry turnover has reached an all-time high of 82%, and family members may administer patient care plans.

An example of a newer solution in the market is Rezilient—a mobile app-based, specialized skills-building solution aimed at preventing family caregiver burnout and reducing chronic stress with self-monitoring tools and coaching.

Conversational AI applications—chatbots, in particular—can enable family member to better surveil their loved ones by using patient-reported outcomes to flag elevated risk to a clinician. There are also remote patient monitoring solutions that put family caregivers in the driver’s seat by adding additional clinical parameters into a virtual avenue inside the home.

I expect solutions like these will only continue to emerge so that patients, their families and caregivers are increasingly connected.

What are the opportunities and barriers to success in the market?

Evan:For patients that are more acute, payers will push care providers toward more progressive risk models. Technology companies will have the ability to enable health systems to succeed in hospital-at-home programs. For example, Contessa Health provides protocols, care coordinators and technology that has enabled Ascension, CommonSpirit Health, Highmark Health and others to oversee and manage risk for patients recovering from an episode of care.

Payers are also interested in bringing care delivery in-house. The best example of that is Humana buying Kindred at Home (home care service provider) and Curo. Curo enables more patients to receive end-of-life care in their preferred setting. The thesis around that is driven both by cost and patient experience; being able to provide a higher level of care in the home ultimately also provides a better patient experience.

Jeff: Recently there have been significant milestones in telehealth legislation, which is great news for the industry. The expanded definition of “qualified settings” for telehealth by the Centers for Medicare and Medicaid Services will have a major impact on the future of home-based care delivery.

Evan: Telehealth and remote patient monitoring will be important, particularly in the home healthcare agency market, given the transition to the Patient-Driven Groupings Model (Medicare reimbursement limited by case-mix, not visit quantity). More efficient care delivery will be essential for smaller operators to sustain. However, we anticipate that consolidation will occur among agencies as a result. This will serve as a challenge for some and an opportunity for others.

What are the big takeaways for startups participating in this market?

Evan: Building on my comment about changing payment models and shifts in the home healthcare industry in particular, I think for any entity in the market, making sure that you can show immediate operational or clinical outcomes and ROI are key. If it’s not clear, it’s going to be hard to get in the door. This also prevails for companies that are enabling episodic risk in the home, given the nature of the intervention that should dictate near-term ROI by lowering utilization.

Jeff: This is a really important moment as organizations accelerate the shift to more patients in the home setting. So yes, there are currently very interesting products and services in the market that can help hospitals and payers shift patients to the home and help home healthcare agencies treat patients more effectively—but the industry still needs more innovation in the space. I’ll be interested to see some of the new innovations that come into the market over the next few years as these trends continue.

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