There’s a growing opportunity in state-funded programs
Do you or don’t you get involved?
State-funded community programs haven’t gained too much favor with hospital-based home health agencies. There are a variety of reasons behind this, most of which concern money. But for the right agency, this relatively untapped field offers an opportunity for expansion, especially for those agencies looking to diversify in the wake of the prospective payment system.
Larry Leahy, MHA, CHCE, is the director of program integrity for Beaumont Home Health Service in Victoria, TX, a three-office, freestanding agency. His agency has been involved in state-funded, community-based programs since their arrival in Texas in 1994, he notes, adding that this new area of home health care just seemed like a good one in which to diversify.
These programs, he says, are geared toward keeping residents out of nursing homes and were developed with the idea of saving Medicaid funds. "They’re attempting to keep the costs of these waiver programs under 95% of the tile rate, or the cost of keeping someone in a nursing home," Leahy says of the Texas programs.
This is possible, he says, because while "nursing home care is more complex and requires skilled-nursing and therapy services, these state-funded community-based programs are more attendant-based in nature and provide services to help with daily living." Cooking and cleaning services are just a few of the duties involved, he explains.
Entry is easy
According the Leahy, it’s been primarily freestanding agencies that have become involved, although he’s not really sure why. Getting involved, at least in Texas, isn’t too difficult.
"There’s no bidding for programs and anyone can get involved as long as you meet the licensing criteria," says Leahy. "To get a contract you have to prove you’re Medicare licensed and certified, that you have a home health agency license, and that personal assistance services are part of that license. You must prove that you are a member in good standing in the community and certify that you have no outstanding debts. That and a resolution of commitment to the program from your board of directors" are required.
At the present, it’s relatively easy to join, but that may soon change, warns Leahy. "Sometime in the future — probably in the next four years — as the state looks for further ways to cut costs, it may open up to some form of competitive bidding. At that point, a new player’s cost structure might not be competitive enough to bid, and long-term agencies will have the advantage because they have a larger patient volume and economy of scale."
Certainly, for the right agency, (one with capital funding in place) the community-based program offers a new arena in which to expand. Still, the relative dearth of participating home health agencies is not an automatic guarantee for success, he points out. For starters, "the profitability margins are slim so it takes a while before you can generate any significant profit."
Moreover, the point of referral is entirely different. In standard home health cases, dispatch planners are the ones referring patients; with community-based programs, it’s the case workers in your geographical area. One problem: "It can take a while before you develop a rapport with [case workers] and before they are comfortable with your services and capabilities," admits Leahy, adding that this could be a major deterrent to hospital-based agencies.
Still another potential obstacle in the road to success is the working environment. He points out that not only must agencies become accustomed to looking at these cases as more social service than medical in nature, but also they require a different type of employee, usually one who is not as well-trained as a home health aide or nurse. "You may have to have one person in charge of making sure the attendants make their daily visits." With minimum-wage salaries, Leahy points out, "you’re getting an entirely different type of work force, one that you need to help develop job skills."
Where’s the funding?
No matter the challenges of employee training, says Greg Solecki, vice president of Detroit-based Henry Ford Home Health Care, the real issue at stake is funding — or more specifically, the lack of it.
"The intentions of these programs are very good and noble, but they often come without funding," he says. "As a home health agency, we weren’t doing the kind of job we wanted to do with these state-waiver programs because you just don’t get paid enough.
"We’ve just avoided them, and we’ve taken some pressure for that. We are qualified, and we have the staff to provide the care, but we got tired of losing money. We were delivering care at less than cost and sometimes free. The [Balanced Budget Act] helped us to see that if we give too much care away, then we won’t be able to help anyone in the future. We must do what we have to remain here for the community, and so we got out of that business."
While Leahy agrees it’s not for everyone, he encourages agencies to at least consider entering the state-funded, community-based market. He predicts that despite a lack of interest from the hospital-based home health community, these programs will continue to proliferate.
Thanks to the "disenfranchisement of the long-term care patient from Medicare and as a result of consumer activism in health care, the old days when you went to a nursing home are gone," he explains. "Many people want to stay home with family and friends and have some control over how they are cared for . . . and rightfully so."
Sources
• Larry Leahy, MHA, CHCE, Director of Program Integrity, Beaumont Home Health Service, No. 1621, 1501 Mockingbird Lane, Suite 404, Victoria, TX 77904. Telephone: (512) 578-0762.
• Gregory P. Solecki, Vice President, Henry Ford Home Health Care, 1 Ford Place, No. 4C, Detroit, MI 48202. Telephone: (313) 874-6500.
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