During the pandemic, hospital-at-home programs grew significantly, and the trend will likely continue. Writing for Modern Healthcare, Diane Eastabrook explains why hospital-at-home programs are becoming more popular, the disruptors that might join the market, and the obstacles that could slow its growth.

Hospital-at-home is growing rapidly

Hospital-at-home programs have been around since the 1970s in Canada, the United Kingdom, and Israel, but only came to the United States in 1995 after Johns Hopkins School of Medicine and Public Health began an initial pilot program.

These programs allow patients who need acute care to receive treatment at home instead of in a hospital. Providers monitor and communicate with patients remotely. Some illnesses treated through hospital-at-home programs include congestive heart failure, pneumonia, and COVID-19. These programs allow hospitals to free up beds for their sickest patients while reducing care costs for both providers and payers.

During the pandemic, hospital-at-home programs grew significantly after CMS launched the Hospital Without Walls initiative to help hospitals increase their patient capacity amid COVID-19 surges. The program was later expanded into the Acute Hospital Care at Home program, which gave hospitals more flexibility to treat patients at home while still receiving the reimbursement rates as patients in hospitals.

In 2021, there were almost 170 hospitals and health systems in 29 states that offered hospital-at-home programs. Now, there are over 400 hospitals and health systems in 33 states with these programs. These programs are also expected to grow by 50% over the next few years as the U.S. population ages.

What's driving the hospital-at-home market?

According to healthcare research firm Chilmark, the hospital-at-home market is expected to grow from roughly $200 billion in 2023 to $300 billion by 2028.

Elena Iakoveva, a Chilmark analyst, said technology and healthcare disruptors, such as Amazon and Best Buy, could also enter the market by adding hospital-at-home services to their current healthcare offerings.

Payers, particularly Medicare Advantage plans, are also looking to build their home health services. For example, Home health company Amedisys recently announced it has agreed to be purchased by UnitedHealth Group* (UHG) subsidiary Optum in an all-cash deal for around $3.3 billion.

According to Advisory Board's Miriam Sznycer-Taub and Blake Zissman, there are two main things driving the race to acquire home-based care assets:

1.  Home-based care is a cost-effective alternative

Payers want to direct their members from acute care back to the home without a skilled nursing stay. Especially for Medicare Advantage patients, there is a financial incentive to avoid sending patients to a skilled nursing facility (SNF).

Amid the push to improve patient quality, SNFs are often seen as a cost center that payers are eager to cut out — leading many to invest in home health agencies and services.

2.  Home-based care operators need to grow their workforce

All home-based care operators, whether part of a payer organization or not, need to grow their workforce. According to Advisory Board research, this was the number one factor hindering the expansion of home-based care.

If payers combine their workforce with that of an existing home-based care workforce, they will be able to overcome this challenge.

The challenges to hospital-at-home programs

Although hospital-at-home programs are currently expanding rapidly, they still face several challenges that could limit their future growth, including:

• Medicare and private insurers may not continue to offer the same reimbursement rates for patients receiving care in hospitals and at home
• Patients in rural areas may not be able to access home-based care easily due to a lack of reliable internet to connect them to medical staff
• Nursing shortages make it difficult for hospitals to ensure that there are enough providers to make necessary visits, especially in more remote areas
• Some patients may prefer to receive care in a hospital rather than at home
• Some patients may not have in-home support from caregivers to safely stay at home or some family caregivers may lack the skills to safely care for patients.

(Eastabrook, Modern Healthcare, 6/7)

*Advisory Board is a subsidiary of Optum, a division of UnitedHealth Group. All Advisory Board research, expert perspectives, and recommendations remain independent.