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Homecare Software Blog – Partnerships in Home Care

Growth through partnership, Hospitals & Homecare Agencies

In this edition of the Alora Home Health Care Software blog, we highlight a rising growth opportunity for Home Care agencies nationwide.

Homecare agency owners small and large have recently had good reason for optimism over a provision in the health care reform bill related to the home care industry’s opportunity with hospitals. Thanks to a provision in health care reform legislation that penalizes hospitals that fail to reduce their hospitalization rates for three specific diagnoses, Homecare agencies have the opportunity to be more than just a provider.They can actually come to the rescue of hospitals and develop mutually advantageous relationships that keep the hospital in compliance, and increase business for the Home care agency.

It is no industry secret that hospitals nationwide have been losing significant money with regard to their Medicare business. A poll conducted in March of 2010 by MedPac suggests that hospitals have been losing money over all of the last five years that reporting has been measured. Dating back to 2008, the percentage of Medicare dollar loss has peaked, reaching its greatest level in a quarter of a decade.

Because of the federal government’s mounting frustration over the out of control costs of care, health care reform has included a provision that mandates hospitals lower readmission rates for in particular three primary diagnoses, or face a penalty that will rise annually. As of late 2012, the rules stated that if hospitals don’t lower hospitalization rates within these three areas, they will lose 1% the first year, 2% in the second year and 3% the third year. CMS is also tossing around the idea of considering adding additional diagnoses areas starting this year (2015). This represents a monumental opportunity for Home care agencies.

The three primary diagnoses that are included in the regulations are diagnoses that home care agencies and caregivers routinely hold experience in treating: AMI (Anterior Myocardial Infarction or Heart Attack), Pneumonia, and Congestive Heart Failure.

It is worth pointing out that statistically, most of these patients with the aforementioned conditions ultimately end up in home care. Based on MedPAC’s data, two out of five discharges are sent to post-acute services. Upwards of 15% end up going to home care. Once a patient is transferred from one type of post-acute setting to another, more than half of those patients end up being referred to home care agencies. Home care is the inescapable and preferred setting once a patient has been discharged from a hospital. Home care is the one setting with a relevant level of expertise within the three diagnoses types where hospitals face a heightened risk for the federal government’s financial penalties.

So how does this affect the approach of the Home care agency owner? The go-to approach to hospitals should not be soliciting them for more referrals, but rather should be establishing a partnership with hospitals, to develop a hospitalization re-admission reduction program that targets these three diagnoses and any others, that increase business for the agency while simultaneously reducing the risk of penalty for the hospital. Home care agencies need to understand and approach hospitals with a new collaborative attitude. Partnering with and establishing relationships with key figures in the Hospital administration will go a long way in addressing this problem so that all participants, hospitals, homecare agencies, and patients come out ahead.

The Alora Homecare Software Blog

Read the Alora blog to learn more about the Home Health Software industry, including recent news, articles and commentaries, as well as other issues that pertain to Homecare in the U.S and beyond. For more information on our blog, or for questions or feedback, please send us an email to HomeHealthSoftware@AloraHealth.com.