June 9, 2023

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Home and community care is poised to grow. Restoring these services requires a range of capabilities and risk-based payment.
It is hard to believe that medical house calls used to make up 40% of all U.S doctors’ visits.1 Home visits used to be the norm, but somewhere in the mid-20th century something changed, and by 1980 house calls accounted for fewer than 1% of patient encounters.2 As a result, people have largely forgotten about the once-famous black medical bag that physicians used to carry from door to door.
Numerous developments were responsible for the shift of care delivery from the home to clinics and hospitals, but perhaps none more than the rise of third-party payers and fee-for-service medicine. In 1960, patients personally paid for 67% of the aggregate bills for medical consultations. By 2014, that number fell to 11% as private insurers and government programs began paying for a larger share of care.3 With clinicians having less control over the money flow, convenience for the patient became less important and acknowledgement of their preferences for house calls dwindled. Instead, volume-based medicine and fee-for-service reimbursement makes it hard to justify the amount of time required to do house calls. Home visits were deemed inconvenient for the provider and an inefficient use of medical resources.
Yet seeing a patient in their home has intrinsic value. It builds a different kind of trust with the patient and allows them to be comfortable and feel safe within a familiar environment. It also allows the clinician to assess the person’s home environment and better address social determinants/drivers of health. For these reasons, home-based care has remained an integral part of patient-centered care. Perhaps it was only a matter of time until a renaissance of home-based care happened.
Over the last couple decades, the advent of risk-based capitation and value-based care has revitalized the home care industry. By making the provider accountable for quality and total cost of care, value-based reimbursement has unlocked the provider’s time and has allowed for funding more intensive care. Financial incentives become unhinged from volume and instead are aligned with improving patient outcomes by providing the right care, at the right time, in the most appropriate setting.
Perhaps most important of all in the restoration of home care is the burgeoning popularity of Medicare Advantage (MA) plans and the care for dual-eligible populations. MA serves an older population that can most benefit from at-home care. In 2022, 28 million seniors are enrolled in MA, many of whom may have trouble getting transportation to a clinic or have mobility challenges that make leaving the home challenging. Dual-eligible beneficiaries often have complex physical, mental, and social needs and difficulty accessing clinic-based care; therefore, holistic patient care in the home is ideally suited for this population. Here, we define home- and community-based care to include all care in the home as well as post-acute care and transitions into the home.
The last couple years have generated a lot of change in the health care system. We have seen two categorical shifts that positively impact the care-at-home industry: regulatory flexibility that has paved the way to more appropriate reimbursement, and widespread consumer acceptance of new care modalities.
Over the last couple decades, the advent of risk-based capitation and value-based care has revitalized the home care industry. By making the provider accountable for quality and total cost of care, value-based reimbursement has unlocked the provider’s time and has allowed for funding more intensive care.
Beginning as early as March 2020, we began to see a flexible regulatory environment in which governmental agencies encouraged home-based care via demonstrations and expansion of home- and community-based waiver programs. The federal Hospitals Without Walls and Acute Hospital Care at Home programs provided broad regulatory flexibility for eligible hospitals to treat eligible patients in their homes. The Centers for Medicaid & Medicare Services (CMS) went on to say that, “treatment for more than 60 different acute conditions, such as asthma, congestive heart failure, pneumonia and chronic obstructive pulmonary disease (COPD) care, can be treated appropriately and safely in home settings with proper monitoring and treatment protocols.”3
In addition, CMS is planning to expand the Home Health Value-Based Purchasing model nationwide. This Medicare demonstration directly ties reimbursement to quality for home health providers, and since its inception in 2016 has resulted in an average of 4.6% improvement in participating home health agency–quality scores and average annual savings of $141 million.4 One of the authors (PC) helped lead the launch of this model during his time at the Center for Medicare and Medicaid Innovation. CMS is expanding this model nationally because it improved quality and lowered costs.
In Medicaid, the Biden administration and Congress increased the federal matching rate to expand access to home- and community-based services to 10%.5 As a result of this trend in increased reimbursement, insurance offerings in the market are beginning to change their benefits. In 2022, 1,172 MA plans will be offering Special Supplemental Benefits for the Chronically Ill (SSBCI), representing almost a fourfold increase compared to the 239 plans to do so in 2020.6 SSBCI reimbursement includes in-home supportive services, transportation help, nutrition assistance, and other services that help individuals stay out of the hospital.7
While public health concerns certainly have driven much of the regulatory and reimbursement changes over the past 2 years, individual patient preferences have also changed the way care is being delivered. Consumers have shown increased acceptance for digital tools and virtual care after being exposed to these modalities during the Covid-19 pandemic. Recent studies highlight some key developments in how consumers think about health care:
In 2020, 84% of physicians were offering virtual visits, and 57% would prefer to continue offering virtual care after the pandemic.8 Consumers may prefer virtual health care for mental and behavioral appointments, with 47% reporting a recent appointment virtually.9
When asked how willing a person would be to have a clinician visit their home, 77% of respondents responded very or somewhat likely for a sick visit or injury, 75% for a wellness visit or physical, and 78% for a chronic care visit.10
When asked how willing a person was to participate in “do-it-yourself care” at home (e.g., strep or flu test, remote patient monitoring), 85% of respondents responded very or somewhat likely.10 In general, adoption of apps and at-home self-diagnostic and genetic tests is accelerating.11
During the pandemic, consumer willingness to share data increased. Among consumers who track their health, 77% say their health devices changes their behavior at least moderately.11
The increased adoption of digital tools and virtual care is enabling care in the home like never before, a trend that is likely to persist post-pandemic as we see greater consumer preference for aging in the home.12
With all the new technology-enabled services and modalities of care, the definition of home- and community-based care continues to expand. The home and community care continuum encompasses primary care with care navigation, urgent and emergent care, acute and post-acute care, home health, behavioral health, palliative care and hospice, in-home dialysis, home infusion, virtual services and telehealth, remote monitoring, social determinant of health (SDOH) interventions, and pharmacy and medication services.
The vision is to unite modular point solutions around the patient to enable timely interventions and care coordination that is supported by data and technology for a seamless experience and optimized care delivery across providers and care settings, including in coordination with primary care clinicians in clinics.
As of 2018, U.S. home health care spending is projected to grow about 7% annually from $103 billion to $173 billion by 2026. This increase is supported by rapid growth in adjacent markets such as remote patient monitoring ($4.6 billion in 2021, with 16% compound annual growth in 2021–2026), telemedicine ($55.9 billion in 2020 and 22% CAGR in 2021–2028), at-home diagnostics ($13.8B in 2020 and 3.4% CAGR in 2021–2028), and portable X-rays ($6.2B in 2021 and 14.6% CAGR in 2021–2026).1317 Looking across the current market landscape, we see that standalone services and point solutions remain common with limited instances of full-scale integration. Most solutions still have narrow geographic footprints and are focused on a single line of business, primarily MA. As the market continues to grow and transform, we expect a bifurcation between traditional fee-for-service solutions and value-creating innovators — namely, organizations that put together comprehensive solutions to improve access to care and outcomes while reducing costs for populations of patients, including the most complex patients.
This is the backdrop in which a new, holistic platform of home- and community-based care can be developed: a platform that serves the physical, mental, and social needs of people according to their personal care preferences. The vision is to unite modular point solutions around the patient to enable timely interventions and care coordination that is supported by data and technology for a seamless experience and optimized care delivery across providers and care settings, including in coordination with primary care clinicians in clinics.
As we set out to create a home- and community-care platform that delivers superior outcomes at a lower total cost of care, we have identified critical capabilities that are necessary to effectively deliver an integrated clinical model for full-population longitudinal patient-care management that follows a patient’s journey through the health system and addresses their physical, mental, and social needs.
This is the pivotal first step to identifying, engaging, and stratifying your patient population through annual in-home comprehensive clinical examination of people’s medical, behavioral, and social needs. During this home clinical visit, an advanced practice clinician (APC) identifies gaps in care and untreated conditions and educates members on their individualized wellness and disease management activities necessary to improve their health and well-being.
It is critical to complete these initial assessments to ensure that a personally tailored care plan is created. The results of Optum’s HouseCalls program speaks to the necessity of this capability. In 2021, HouseCalls closed more than 2.1 million gaps in care, generated over 600,000 referrals to follow-up care, and made over 320,000 referrals for SDOH needs, including 158,000 for low-income support, 85,000 for transportation needs, 37,000 for medication affordability, and 43,000 for food insecurity. Trust built during the HouseCall visit between clinician and member increases patient engagement in longitudinal care and condition-specific management programs.
Patients discharged from hospitals and other care settings regularly encounter a fragmented system of care that frequently leads to unmet needs, conflicting medications, and a poor patient experience. Appropriately managing a patient’s transition from acute care facilities is essential to keeping them safe and on track to achieving functional recovery as they return to the community. Engaging the patient at discharge with clear instructions will lower the likelihood of high-cost follow-up care and readmissions.9 In fact, comprehensive transitional care programs including detailed discharge planning and 90-day home follow-up have been shown to reduce the number of readmissions, reduce deaths, and decrease health care costs.18,19 Discharge to the appropriate location, whether that be the home or a nursing facility, is a critical component to successful outcomes and lowering cost. An appropriate balance, which can now be algorithmically driven through data, must exist between the cost and intensity of the location of discharge.
No matter how many of these capabilities your organization can build under one roof, there will always be a need for deep, trusting partnerships at the local ecosystem level to effectively deliver seamless care across the patient care continuum.
naviHealth, a Nashville-based post-acute care organization that is part of the Optum Home and Community platform, focuses on connecting patients to “the right care, in the right setting, for the right amount of time.” Using its proprietary data and technology, naviHealth has been able to improve the quality and outcomes of these care transitions. At the same, they are achieving an average of more than 20% cost savings per episode of care and reducing average length of stays in skilled nursing facilities (SNFs) by 15–25% and allowing patients to go home sooner.
Providing solutions for at-home emergent care or acute care is convenient for patients and can help avoid unnecessary visits to emergency departments and hospitalizations. Additionally, emergent and advanced care at-home programs have been shown to deliver similar, if not better, quality outcomes compared to regular inpatient care. A 2018 study on hospital-level care at home bundled with a 30-day episode of post-acute home-based transitional care showed that patients in the bundled home-care model had shorter lengths of stay, lower rates of readmissions, and better satisfaction with their care than those in in-patient settings.20
One can also look to DispatchHealth to see a successful at-home emergent care and advanced care model. Since 2013, this company has been providing at-home emergent care for Medicare, Medicaid, and commercial insurance patients using APCs. In 2019, DispatchHealth began to offer advanced care (hospital and SNF level) in the home model. The initial results of the model are positive. For example, preliminary DispatchHealth data reported that 200 patients were treated in their homes with fewer than 6% readmitted (compared to the national average of 16%), and none dying unexpectedly or experiencing a serious safety event. Additionally, the model saved on average $6,200 per individual compared to treatment in a traditional hospital setting.21 Important benefits of the program include increased acceptance rate with community-based admissions in the home, increased goals of care and quality of life addressed in the home, and poly-pharmacy reduction. DispatchHealth has since expanded the model substantially, with positive outcomes.
With the advancement of technology and medical equipment, patients suffering from serious illnesses and chronic conditions can now be effectively treated in the home by physicians and APCs. By creating home-based medical groups, we can provide the highest quality of care to the sickest populations without them having to leave the comfort of their own home. Services such as primary and advanced care, infusions, wound care, mental health care, and dialysis can now be successfully provided in the home at lower costs. We have found these medical groups are at their best when staffed with interdisciplinary care teams that can treat the whole person. In addition to the physician, bringing care coordinators, behavioral health providers, APCs, RNs, pharmacists, dieticians, and social workers to the home is critical to addressing the needs of the whole person. In fact, a recent survey showed that respondents with multiple unmet social needs and poor mental health were 2.75 times as likely for high health-care utilization than those with no unmet social needs.9
Landmark Health, a home-based medical group founded in 2013, has shown how successful this interdisciplinary care model in the home can be. Landmark treats the sickest patients, typically with multiple chronic conditions, and has proven to reduce hospital admissions, ER visits, and SNF days by 15–25% while simultaneously reducing medical expense by 20–30%. Landmark can provide and fund this level of intense primary care through use of value-based care arrangements. Landmark is now part of the Optum Home and Community platform.
To make the set of capabilities outlined here as effective as possible in supporting the patient journey, the home and community care platform must support critical technology-enabled capabilities. Virtual care through primary and specialty telemedicine is key for providing maximum access to homebound patients. Remote patient monitoring capabilities are essential in continuous monitoring of the chronically ill. By utilizing these devices effectively, care teams can complete timely intervention before a serious adverse event occurs. At-home pharmacy capabilities are fundamental to ensuring home-based care is effective. Pharmacy accounts for a large portion of the total cost of care, and medication adherence can have an outsized impact on outcomes. Creating capabilities that allow for easy online or telephonic ordering and home delivery of medications will help guarantee your patients get the medications they need in a timely manner.
To be successful, the risk-bearing entity must design and deploy a truly integrated clinical model through the patient lens across providers and throughout the care continuum.
Many of the above capabilities require relationships and coordination with external parties to successfully deliver integrated, patient-centered care. For example, pharmacy home delivery requires partnership with pharmacy benefit managers, and effective SDOH referrals and interventions require partnerships with networks of community-based social support services. Effective care transitions require partnership with hospitalist groups and hospitals to be engaged in discharge planning. No matter how many of these capabilities your organization can build under one roof, there will always be a need for deep, trusting partnerships at the local ecosystem level to effectively deliver seamless care across the patient care continuum.
Now that we have laid out the necessary capabilities for a longitudinal home- and community-based care delivery platform, we need to build a financial model that can support it. As mentioned earlier, the intensity level of this care is not feasible in a traditional fee-for-service model as time becomes too much of a limiting factor and not enough revenue can be collected. Instead, a risk-based arrangement is needed to support the model. Ultimately, a fully capitated arrangement unleashes the full impact of the home and community model. But for many organizations, shared savings and partial two-sided risk arrangements may help support a progression to value-based care in the home. The risk-bearing entity needs to be accountable for both quality and cost. Alignment of payer and provider is essential.
The ultimate risk-bearing entity should, when possible, receive the full payment from the payer and work with partners to provide the various capabilities if/when needed. For example, if Landmark Health manages the total cost of care for a patient, they coordinate activities such as initial patient assessments with Optum HouseCalls or care transitions with naviHealth. However, to be successful, the risk-bearing entity must design and deploy a truly integrated clinical model through the patient lens across providers and throughout the care continuum. Payers typically prefer a single entity that can provide end-to-end risk-based care to the whole targeted patient population. Home and community services also can wrap around risk-based, clinic-based provider groups taking full risk. This is currently being done with OptumCare practices and with other risk-based provider groups.
Effective management of fully capitated risk takes time to develop, as there are many factors to account for along the entire patient journey (e.g., member behavior, unforeseen utilization, poor network performance). As an organization works over time to build out all the necessary capabilities to handle fully capitated arrangements, certain capabilities can be bundled in other value-based arrangements. Episodic care such as post-acute transitions or hospital at home can be serviced through bundled payment arrangements, while other longitudinal care management can start with upside/downside shared savings. These shared savings arrangements can limit the downside on organizations that are still building out their value-based capabilities while allowing them to move away from fee-for-service. Ultimately, to be successful in delivering this high-intensity care model in the home, you need to create a financial model that adequately compensates all partners for their time. Medicare Advantage and Dual Eligible Special Needs Plans (DSNP) are uniquely positioned to finance home- and community-based care models.
While it is clear from a funding perspective that the initial focus of home- and community-based care is on seniors and people with complex needs in all individual MA and DSNP plan types, we need to look toward expanding access to this care model in the future. Currently, community MA, DSNP, and Chronic Condition Special Needs Plans (CSNP) can sufficiently fund intensive models of care for high-risk populations as well as community-centric care for emerging-, rising-, and stable-risk members. The Medicaid opportunity is most likely to come next as many states begin to have specific home-based programs and waivers that fund services. It is clear that for this population, which typically suffers from the most challenges with health equity, a holistic model of care for the whole person would be beneficial.
The overall societal trend of more being done in the home will continue to spill into health care, and not just for the sickest populations.
The Biden administration and Congress have demonstrated support for care in the home. The last hurdle for broad access to home and community care is the commercial market. For select high-risk populations in the commercial market, an intensive home and community risk–based model is appropriate. Generally, for all commercial populations, there is rising consumer demand and a growing market for direct-to-consumer offerings with convenient, on-demand access to high-quality services and concierge-like navigation including virtual care in the home. Additionally, employers like offering the convenience of home-based services for the potential of less absenteeism. The overall societal trend of more being done in the home will continue to spill into health care, and not just for the sickest populations.
As the popularity of home and community care solutions and platforms continues to rise, differentiation will be key for any organization to effectively capitalize on these trends. Organizations and local context will vary, but the ability to engage patients, wrap around primary care in the clinics, and build a holistic model centered around the individual’s needs will be critical.
Innovation continues to push care in the home and community forward. Our health care delivery system needs to achieve the goal of creating a comprehensive care model that can serve all people, anytime, anywhere, including in the home, for their physical, mental, and social needs.
Patrick H. Conway, Alex Rosenblit, and Scott Theisen have nothing to disclose.
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