The quotes that cracked this Home Health Care News list were not only memorable, candid and informative, but paint a complete picture of the home care landscape in 2022.
The words of industry leaders highlighted here weigh on everything from tensions with Medicare Advantage (MA) plans to staffing shortages that are stifling industry growth and more.
Perhaps most importantly, the statements shed light on what’s in store for home health and care in 2023 and beyond – as many of the issues raised remain unresolved.
“The main thing we are looking at is the 7.69% rate cut – will it happen or not? We did the most intense lobbying I’ve seen in my life. And I’ve been in the legal profession for a couple of years. The efforts we have underway involve all forms of advocacy.”
— William A. Dombi, President, National Association for Home Care & Hospice (NAHC) (10/24/2022)
This quote from NAHC’s Dombi provided the backdrop for the battle over home health insurance rates that would take place in 2022.
As things stand, the final rule included an estimated increase in home health care payments in 2023 of 0.7%, or $125 million, compared to total payments in 2022. The final rule also included a cap on negative wage index changes and a recalibration of case-mix weights and low-utilization payment adjustments (LUPA) thresholds for 2023.
But more importantly, the final rule included larger cuts in reimbursements.
NAHC and other advocates will continue to urge CMS to reconsider their plan. They also appeal directly to members of Congress. Litigation is another avenue NAHC may take, although it is not the organization’s first strategy.
“We didn’t score and were predictable in earnings, that’s why I’m back. We have to stand by what we say and stick to our numbers. And there’s no reason not to deliver on our numbers and beat our numbers with these initiatives.”
— Paul Kusserow, CEO and Chairman, Amedisys (6 Dec 2022)
The homecare world was rocked when it was announced that longtime CEO of Amedisys Inc. (Nasdaq: AMED), Paul Kusserow, would return to the helm of the company after then-CEO Chris Gerard served less than a year . The move even drew comparisons to the recent leadership change at mass media and entertainment conglomerate The Walt Disney Company (NYSE: DIS).
Those words show how many providers have struggled to meet their financial benchmarks despite the skyrocketing demand for home care services. This fight was mostly due to headwinds stemming from staffing shortages and reimbursement issues. Amedisys was not immune to these challenges.
The fact that the company was unable to meet its own expectations prompted Kusserow to quote this quote at his first major appearance after his return as CEO. More broadly, his statement also gave stakeholders clues as to what led to his return.
Looking ahead, Amedisys is attempting to recover by focusing on staffing and improving its MA contracts.
“I think we’ve accomplished a lot more with managed care [because of our JVs with hospitals], and I have really good relationships with executives. … But I think our biggest problem is the conveners right in the middle.”
— Keith Myers, Chairman and CEO, LHC Group (July 26, 2022)
With ties between MA and home health already shaky, many providers believe convenors are adding fuel to the fire. In other words, working with conveners isn’t always practical for vendors.
Conveners are said to act as a middleman between payers and providers, but providers have told HHCN – both officially and unofficially – that coveners are “siphoning off” their profits. This is particularly alarming as home health nurses struggle with low MA rates. For context, MA plans have paid up to 40% to 60% less than the Medicare fee.
This quote from the head of LHC Group (Nasdaq: LHCG) captures that tension.
“I think that’s the same reason why consumer brands are spending so much money on the younger segment where brand loyalty is seeded, right? … If we are not with our seniors when they begin to use their Medicare Advantage benefit, we will miss the opportunity to be with them when they exceed Medicare Advantage paid hours and require private payment.”
— Shelly Sun, CEO and Founder of BrightStar Care (11/17/2022)
Since 2019, the question has been whether MA is really an opportunity for nursing services. Rather than straining that debate, Sun’s statement goes further and explains why it’s imperative for vendors to plant seeds now as an investment in the future.
There is no question that the number of MA enrollments is increasing. As of 2022, more than 28 million people are MA enrolled. This is nearly half of the Medicare population, according to the Kaiser Family Foundation.
The signs only point to further increases in the future, which will make it impossible for home care to ignore MA.
“It’s not just about the clinics; now it’s about home and community.”
– Andrew Witty, CEO, UnitedHealth Group (01.12.2022)
As HHCN begins to look back at 2023, UnitedHealth Group’s plan to buy LHC Group is arguably one of the biggest deals to happen.
And while the coming together of these two giants in their respective sectors is a big story on its own, the news also represents a major shift in healthcare in general, and Witty’s testimony sums it up.
It speaks to where UnitedHealth Group is taking healthcare and the company’s investment in being at the center of that change.
“The challenges facing healthcare workers are not stabilizing, they are intensifying [in regards to] how companies experience recruitment and retention, wage pressures, incentives and are currently trying to manage staffing in this environment.”
— Joanne Cunningham, CEO, Partnership for Quality Home Healthcare (10/21/2022)
Looking at the issues faced by home health care providers, it seems like they are happening one after the other. Nevertheless, staffing remains the No. 1 topic.
In her statement above, Cunningham explains why the workforce landscape continues to deteriorate and explains how this has created a perfect storm of barriers to provider care delivery.
In October, the Partnership for Quality Home Healthcare conducted a labor cost study with Dobson DaVanzo & Associates. It turns out that in the first quarter of 2022, only 59% of agency positions were filled. In addition, ambulatory health authorities often reported that they often face competition from hospitals, which can pay higher wages for staff.
Additionally, 71% of those surveyed said that denying referrals changed the amount of care their organization was able to deliver.
“I think household health has historically [it] got a bit exploited because it was a very fragmented industry. … Some of the payers treated it like a commodity, knowing that if one agency didn’t care about the patient, others would be willing to step in.”
— Mark Tarr, CEO and President, Encompass Health Corporation (May 11, 2022)
Much has been said about the difficult relationship between MA plans and home health care providers. And Tarr’s comments speak to why he believes this has become the status quo between providers and payers.
Tarr isn’t alone in believing that vendors often lose out in these partnerships. But as more home care leaders speak out, and companies increasingly begin to shy away from MA deals that don’t make sense given capacity constraints, it’s likely that providers will slowly see change going forward.
In July, Enhabit Home Health & Hospice (NYSE: EHAB) completed its spin-off from Encompass Health. Tarr still serves as CEO of the latter, while Barb Jacobsmeyer is CEO of Enhabit.
Today, Enhabit is one of the largest home health companies in the country. Its presence spans 35 states and more than 350 locations.
“The biggest trend in 2023 is the rising cost of privately paid home care services. Over the past year, our rates have increased between 20% and 40%. So while the need for home care has increased, the market for people who can afford long-term care has shrunk.”
— Ryan Iwamoto, President and Co-Founder of 24 Hour Home Care (12/16/2022)
For all of the reasons discussed above, the cost of home care services has increased dramatically in 2022. Iwamoto, president and co-founder of Los Angeles-based company 24 Hour Home Care, captures that trend in his words.
According to Genworth’s annual Cost of Care Survey, the average monthly cost of homemaker services nationwide last year was $4,957, with the average monthly cost of home health care services being $5,148. These numbers are based on patients requiring 44 hours of care per week.
At least in 2022, skyrocketing home care prices have yet to outpace customers. Beyond Iwamoto, home care executives have told HHCN that their families have been able to dig deeper without halting service.
But if work dynamics, economic factors, and overall demand exacerbate the problem, more older adults could be released from home care in 2023 — causing the overall home care market to shrink. It’s a problem that more caregivers should think about.