The Future is Now

The home care industry is constantly evolving to meet shifting market demands. Currently, it faces challenges such as an increasing patient volume, healthcare policy changes, fluctuating reimbursement rates, and workforce shortages. To gain deeper insight into how these trends are impacting home care, we connected with leading industry figures: Jennifer Sheets, Board Member of the National Alliance for Care at Home; Mia Haney, CEO of Pennsylvania Homecare Association; and Ananth Mohan, COO of Elara Caring. These experts share their first-hand experiences navigating the complex landscape of modern home care.   

Shifting Market Dynamics  

The Covid-19 pandemic pushed the home care industry into the spotlight – the general American population emerged with greater knowledge and recognition of home and community-based care as a viable alternative to facility-based care, leading to growth of the sector. Yet, the industry still faces many challenges in meeting patient care demands and ensuring access to care.  

When you reflect on the current market for home care, what have been the biggest challenges and where do you see the greatest opportunities for impact? 

Jennifer: Our industry certainly shows no signs of slowing down, and the vital services we deliver are becoming even more critical. In the past three years it has become abundantly clear that home-based healthcare clinicians are integral to how this country can meet the increase in healthcare demand. With a growing percentage of patients and their families now preferring to receive post-hospital care in the home – marking a huge shift in consumers’ healthcare preferences – the value of home care is apparent. However, the industry is experiencing rate cuts and wage pressures that are impeding our ability to respond to the patients and families that need us most. As I look towards the future of the industry, the ability for industry leaders and legislators to look at the lifetime trajectory of a patient’s healthcare journey and assess how to bring real value and cost-efficiency, rather than just look at their piece of the puzzle, will be required to meet the demands of the population and connect the continuum of care.  

Ananth: Home health has significant potential. We’re facing an aging population with greater comorbidities and chronic illness, along with increased patient demand for convenient, flexible and personalized care options. The demand is only growing. At the same time, we’re navigating increasingly complex care models, payment models, and regulatory requirements. Scale and sophistication matter more than ever. The industry is at a turning point, necessitating a shift from volume to value. Providers must prove that they can create value and improve outcomes. Combining service lines is also key, facilitating seamless intersections between Clinical and Personal Care Service offerings, making a sustainable longitudinal difference. The whole is greater than the sum of its parts. Looking ahead, high performers will win and consolidate by bridging the gap in alignment between patients, payers, and referral partners. 

Pressure from Regulatory Changes   

Key regulatory changes are impacting how care is delivered: revised reimbursement rates and structure, a gradual shift from fee-for-service to value-based care models, and new metric reporting requirements. In response, operators must continually adapt to these changes while striving to maintain positive patient outcomes and high satisfaction levels 

What have been the most impactful regulatory changes on the industry? How can the industry best position itself to respond to additional changes including modifications to regulatory requirements, reimbursement rates, and fee structures?  

Mia: Government policies and regulations continue to support home care as a viable alternative to institutional care. The cost-effectiveness of home care combined with strong patient outcomes is appealing to both patients and payers, including insurance companies and government programs like Medicare and Medicaid. However, rate cuts have had a significant impact on the industry. These cuts have led to financial strain for many home care agencies – contributing to the closures of many regional agencies across the U.S. and tightening the margins into the single-digits for many larger organizations. Rate cuts are also influencing operational decisions, care delivery models, caregiver wages, development opportunities, and ultimately affecting the overall quality of care an agency can provide.  Similarly, rate cuts can lead agencies to become more selective about the patients they accept, often preferring those with less complex, lower-cost needs – or patients with insurance companies that reimburse at higher rates. Bringing care home continues to be the most cost-effective option but is too often the last option to receive government funded support.   

Ananth: Historically, home care providers have not articulated their value to payers well. As a result, payers often view home care as an additional utilization and spend rather than a reduction in the total cost of care and an effective option for keeping patients out of higher-cost care settings like skilled nursing facilities. Especially given the increasing acuity of patients being seen in the home. Changing the conversation, demonstrating value, and working collaboratively to create a winning construct is a key objective for the leaders in the industry. That said, recent rate cuts have created pressure on the industry, especially at a time when wages and costs have risen quickly. Some of the pressure will force innovation, scale, and sophistication, but it will also exacerbate access issues. Home care is a scarce resource with significant capacity limitations, and reimbursement variation will impact how capacity is prioritized. We need to increasingly tie reimbursement to outcomes, as well as close the gap between Traditional Medicare and Medicare Advantage payment measures. Ultimately patients and the entire healthcare value chain will win.     

Tackling the Caregiver & Nursing Shortage 

The homecare industry faces a significant workforce shortage due to various factors, including rising service demand, high turnover rates, and the need for specialized training. A key priority for home care operators is developing a comprehensive workforce strategy that can sustain industry growth, create development opportunities for caregivers, and ensure high-quality patient care.  

As a leader in the industry, how do you navigate workforce shortages? Have you implemented technologies to better manage workforce shortages? 

Jennifer: The reality is, we are facing both a caregiver and a nursing shortage. The need to recruit and retain caregivers is more important now than ever before. It is crucial to check in with employees at every stage of their journey with their employer. For example, asking employees “Why are you here, what makes you stay, and what would make you leave?” can help mitigate retention risk. Investing in specialized training programs and professional development opportunities can help attract and keep top talent. Additionally, looking for opportunities to hire mission-oriented professionals – who truly want to work in the industry, can improve recruitment and drive retention. When examining the industry more broadly, low pay remains a significant barrier. Caring for high-need patients can be very demanding, stressful, and dangerous. Yet, current reimbursement rates perpetuate low wages that often result in burnout and high turnover. It is critical that solving the workforce shortage remains a top priority to ensure care can be delivered. If not, patients will continue to have their home health care needs turned away due to staffing shortages. 

Mia: Taking a holistic approach to workforce planning that not only recruits but retains and develops talent within organizations is critical to sustain the growth of the industry. With most home healthcare organizations reporting workforce shortages, it’s clear that more comprehensive strategies are needed. Effective workforce development often begins before the interview stage. Engaging with high schools, nursing programs, and other educational institutions to highlight career pathways can cultivate interest early on. Once employed, prioritizing education for both field employees and management teams can create advancement opportunities and boost engagement. Leveraging online learning platforms with home care-specific training can further enhance talent attraction and retention. 

Attracting caregivers to this field will remain an ongoing challenge for leaders. However, substantial investment in workforce development initiatives can help mitigate long-term shortages. The industry must continually adapt its approach to meet the evolving realities of the home healthcare sector. 

The home care industry is at a pivotal moment, balancing rapid growth with significant challenges in regulation, workforce shortages, and evolving patient needs. As highlighted by these leading operators, by continuing to innovate when navigating these complexities, home care leaders can ensure that the industry not only meets current demands but thrives in the future, providing essential care to those who need it most.