The Opportunity for Home Care Lies in Tech Trends
Capitalize on industry innovation to achieve success for years to come
by Sam Smith

At the Alliance for Home Health Quality and Innovation's Future of Home Health Symposium earlier this year, the focus was on the growing role of home care and the impact of technology on the industry. The general consensus was that home health care is changing, and that successful providers must make the decision to change as well.

Growing Demand

We've said it time and time again: the American population is aging. According to the U.S. Census Bureau, by 2030, there will be 71 million Americans—baby boomers—above the age of 65. That's a 73 percent increase from today's number. With this shift in demographics, there is a change coming in the way that health care is perceived and delivered in this country. A recent study by AARP showed that 82 percent of the people who require ongoing, consistent health care during retirement want to live in their own homes for as long as possible, a trend referred to as aging in place. Also fueling this trend is the fact that home care is often significantly less costly than hospital care or even skilled nursing facility care. According to, the average cost per day in a nursing home is $205, while home care costs an average of $21 per hour ($168 for an 8-hour day). (This site also reports that 70 percent of people turning age 65 can expect to use some form of long-term care in their lives. It's also worth noting that fewer than one-third of Americans ages 50 and above have started saving for long-term care.) In addition, home care can significantly reduce hospital readmission rates, which currently is a hot-button issue in our industry. The demand for more services in health care, spurred by retiring baby boomers, is beginning to exceed supply; this, too, is contributing to fundamental changes in the way health care is delivered. One emerging trend is the phenomenon of naturally occurring retirement communities. In these communities, retirees rely on each other for support to supplement the professional health care they receive. In this model, home care is a popular method of delivery, because it allows the community members to remain in place with their existing support group.

The Impact of Diseases

As much as the method of care delivery will impact the future of health care, the very diseases being treated will also have an effect. According to the Milken Institute, the population groups affected by every one of the seven major chronic disease—cancers, mental disorders, diabetes, heart disease, hypertension, pulmonary conditions and stroke—are projected to grow at a rate that significantly exceeds that of the total population. The Milken Institute also reports that the implementation of these preventive measures, such as daily exercise, not smoking and limiting alcohol consumption, have increased modestly, which should help improve overall health. But when these diseases do affect people, treatment options can be costly. A slowing increase in health care costs, supported by the growing role of home health, can improve the health care landscape and significantly reduce overall health care costs.

The Regulatory Environment

Future health care regulations in the United States are currently focused on accomplishing the Centers for Medicare & Medicaid Services' (CMS) triple aim:

  • Improving the patient experience of care (including quality and satisfaction)
  • Improving the health of populations
  • Reducing the per capita cost of health care

To achieve these goals, we will see an increased emphasis on systems and methods to enhance quality of outcomes, rather than just quantity of services. These run through the entire continuum of care, including delivery of care, monitoring techniques and reporting patient outcomes. CMS is also examining the efficiency of health care. The effectiveness of more cost-containment methodologies, such as Bundled Payment Care Initiatives (BPCI), are being evaluated to help move patients along the long-term care and post-acute care continuums, while also keeping costs low.


The International Classification of Diseases (ICD) system is integral to ensuring proper care for patients. The upcoming transition from the ICD-9 to ICD-10 coding system (October 2015) is approaching quickly. This change will increase the number of codes from 7,000 to 70,000, allowing health care providers to be much more specific with their diagnostic descriptions. However, it also means that the codes will be more complex, increasing the chance for errors. With the ICD transition, the implications for home health reimbursements are significant. The erosion of the Medicare 60-day episode gives way to outcomes-based discharges and cost containment, as well as other models created because of changes in the industry; HIPAA compliance audits and enforcement actions are likely to continue to ensure privacy of patient information. Regulators and insurers, as well as Medicare's BPCI conveners, are expected to rapidly recognize the value of home health due to the cost difference as compared to hospital and nursing facility-based care.

The Importance of Technology

With reduction of costs being one of the triple aim goals, payment system innovation is key (see box above). Health care payment systems have traditionally been fragmented and noncollaborative, but they are moving toward a cohesive system centered on population health management and outcome-driven payments. Fraudulent medical claims cost United States taxpayers millions of dollars each year. Fraud prevention strategies can play a major role in deterrence and early detection, and technology holds the key. The federal government's ability to mine data and detect potentially fraudulent activity will become more refined moving forward. CMS launched a specific task force to reduce health care fraud—the Healthcare Fraud Prevention and Enforcement Action Team (HEAT). While most home health agencies are hard-working, honest and ethical, operators would be wise to put initiatives in place to safeguard their organizations from unethical employees. Technology provides a measure of prevention in both these situations. Health care is a field of innovation. From diagnostic tools to pharmaceuticals to communications and record keeping, we have already seen technology change health care for the better. Most recently, mobile device companies are offering consumer-driven health care apps to give consumers more empowerment over their own health. Today, mobile applications can do so much more than help people keep track of their calories or how far they run. Mobile technology is redefining health care for both patients and providers. In home health, for instance, the proof-of-care data and real-time patient signatures made possible through Electronic Visit Verification (EVV) are helping improve patient outcomes and keeping agencies efficient in multiple ways:

  • Support HIPAA compliance
  • Improve billing accuracy and speed of reimbursement
  • Streamline payroll processing
  • Reduce the possibility of data errors
  • Facilitate scheduling
  • Free home care professionals to focus on the patient rather than the paperwork

Looking Ahead

As the Affordable Care Act continues to be implemented, growing the ranks of the insured, expanding Medicaid in many states and requiring greater transparency and efficiency throughout the industry, home health agencies that are adaptive and embrace technology effectively will not only be able to survive, but they will also thrive.

Payment Systems Innovations

  • Bundling of services under a central convener, such as a hospital, an accountable care organization (ACO) or a health care system
  • Payment systems being organized in regional markets
  • Interconnectedness of data among hospitals, physician clinics, nursing facilities and home health agencies through use of interoperable technology