Medicare Advantage Lacking In Home Care

A study in JAMA Health Forum stirred the pot ahead of a busy HIMSS week by suggesting that Medicare Advantage patients are getting skimped on home care.

Researchers conducted a cross-sectional study of 178k traditional Medicare and 107k Medicare Advantage patients, analyzing those who had care between 2019 and 2022.

Compared to their Medicare counterparts, MA patients:

  • Saw shorter home health lengths of stay (-1.62 days)
  • Saw fewer nursing, therapy, and aide visits (social work was the only exception)
  • Had 3% lower odds of improving mobility
  • Had 4% lower odds of improving self-care metrics
  • Were 5% more likely to be discharged to the community

While home health isn’t a massive focus for most MA plans, it’s an important resource for keeping patients out of nursing facilities or other long-term care.

  • MA beneficiaries are also more likely to live alone and without a large support network, so the fact that they’re getting discharged to the community more frequently – combined with less mobility improvement – isn’t a great recipe for success.

The study doesn’t dive into the cause behind the discrepancies, but whether the differences are due to the administrative burden or cost-limiting incentives of MA plans, the negative implications for patients are clear. Less functional independence, and more caregiver burden.

The Takeaway

With over half of Medicare beneficiaries now enrolled in MA plans, there’s a growing concern over how the plans are operated, and whether the fences they set up around coverage are limiting access to treatment. All-in-all, this study seems to validate that concern, and reinforces the need for keeping a close eye on outcomes as MA enrollment continues its upward trajectory.

7wireVentures: Home is Where the Health Is

Although in-home care has made some major strides over the last few years, a recent 7wireVentures perspective piece laid out why we’re likely still in the “nascent stages” of a shift that has a long way to go before reaching its potential.

7wireVentures sets the stage by defining four distinct segments of home health consumers: 

  • Chronic Care – Seeks ongoing virtual care tailored to their needs, often with an in-depth treatment plan and frequent support for symptom and medication management.
  • Preventative Care – Seeks routine virtual wellness appointments with a primary care physician, often desires convenient access to lab testing.
  • Recently Discharged – Seeks consistent access to virtual care for support when issues arise, often related to new medications or health problems following in-patient care.
  • Hospice Care – Seeks continuous in-person care to treat symptoms from the comfort of their own home, often facing a terminal illness.

The landscape of companies addressing those needs varies widely, but this market map does an excellent job grouping them across five primary categories: Preventative Care, Urgent Care, Chronic Care, Hospital at Home, Hospice and Palliative Care.

Using the above framework, 7wireVentures offers a trio of home health predictions:

Prediction 1 – As the industry shifts towards more home-based care offerings that bring a lower-cost site of care compared to traditional in-person settings, demand for such solutions will grow, thus setting in motion a virtuous cycle towards value-based care.

  • This would also increase the focus on synchronized care and aggregated data collection, favoring platforms that can support different clinician types / modalities and tie it all together with EHR integration.

Prediction 2 – As demand for healthcare continues to outstrip supply and access to preventative care in traditional settings remains costly, incumbent healthcare stakeholders will expand offerings into the home.

  • This would create the need for more partnerships to develop sustainable solutions, similar to Memorial Hermann’s joint venture with AccentCare that established the largest provider of in-home health services in the Houston area.

Prediction 3 – Given the increased ability to collect broader sets of user data, providers will be better equipped to develop deeper insights into consumers, and thus take a whole-person approach to care delivery.

  • This would push personalized care toward earlier stage interventions, reducing costs further down the line and ultimately making the promise of always-on, preventative healthcare possible.

Optum Competes for Acquisition of Amedisys

We’ve got a good ol’ fashioned home care standoff, with UnitedHealth Group’s Optum division throwing a wrench in Option Care Health’s takeover of Amedisys by submitting a competing offer of $100 per share, 100% cash.

Optum’s offer values Amedisys at about $3.2B, whereas Option Care’s already-accepted all-stock offer valued the home health and hospice provider at $3.6B barely over a month ago.

  • Amedisys shareholders now have the option to back out of the Option Care acquisition, which is probably tempting since the all-stock transaction would give them less liquidity, expose them to a ton of downside risk, and was met with pretty tough analyst reactions.
  • The Optum announcement prompted Option Care to reiterate its confidence in the acquisition, which it says could reduce costs by over $50M right out of the gate and lead to $9B in combined revenue by 2027 (vs. $6B today).

Besides showing that it can steamroll any would-be competitors’ moves, Optum is picking up home care providers left and right as a way to expand its margins by keeping patients in their homes and out of higher-cost healthcare facilities.

  • Amedisys operates close to 350 home health agencies, 160 hospice care centers, and is a major hospital-at-home figure thanks to its 2021 acquisition of Contessa Health.  

Here’s a look at the top five US home health providers and their current market share:

  • Kindred – 6.0%
  • Amedisys – 5.0%
  • LHC Group – 4.4%
  • Encompass – 3.9%
  • AccentCare – 1.7%

Kindred has already been scooped up by Humana. Amedisys is moments away from an acquisition. LHC group was recently acquired by Optum. It’s anyone’s guess who the next targets are, but there’s a pretty clear trend among the top players.

The Takeaway

Although Amedisys is still bound to its agreement with Option Care, Optum’s approach likely qualifies as a “superior proposal” that would let shareholders dissolve any existing obligations. The market currently looks like it’s picking Optum as its favorite to get the acquisition, with shares of Amedisys jumping over 10% on the new offer, and shares of Option Care also rallying since its investors weren’t too enthused about the acquisition in the first place.

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