Amedisys Inc. (Nasdaq: AMED) has already logged an uptick in diversions from skilled nursing facilities as the COVID-19 pandemic rages on, and leaders at the home health giant see even more opportunity ahead with a more expansive SNF-at-home model.
“We have not seen a material recovery in elective procedures, yet we have seen a significant recovery in our admissions, which means we are winning market share and new referral sources,” CEO Paul Kusserow said during the company’s second-quarter earnings call on Wednesday. “Our admissions would also suggest that we are starting to realize the trend of patients wanting to avoid admission into SNFs and other facility-based settings. It is without a doubt that the home is the safest place to care for patients.”
In terms of diversions, the company has historically focused on what Kusserow described as “jump-ball business” — the 10%, in his view, of post-acute patients who could either recover at home or in an institutional SNF. In normal times, Amedisys typically ends up sharing that slice of the population 50-50 with SNF operators, but the COVID-19 pandemic has scrambled that pattern.
For instance, while Amedisys’s referrals from physicians and hospitals dropped early in the year amid the blanket cessation of non-emergency surgeries, they had largely returned to normal by the end of the second quarter, according to chief operating officer Chris Gerard.
But with SNF occupancy scraping at the bottom of a cycle low and elective procedures still only at 75% of normal, the overall business-as-usual referral stream indicates a shift, Gerard said.
“That would suggest we’re getting a little bit of a different type of referral from the hospital and the institutional referrals,” he said. “We are also seeing case-mix weight come up on our patients as well — that would suggest a little bit different-type patient, and we feel like that’s really going to be a diversion from these patients landing into a skilled nursing facility first, and then coming to us. They’re coming to us directly.”
The Baton Rouge, La.-based Amedisys — which provides home health and hospice care to more than 400,000 patients annually — became the second public post-acute company in as many days to report an upswing in SNF diversions stemming from the coronavirus pandemic.
Executives at fellow home health heavyweight Encompass Health Corporation (NYSE: EHC) observed a similar pattern as Amedisys, with referral volumes running at 98% of normal despite the lagging demand for post-acute services associated with elective procedures.
“All of that would lead us to believe that we’re getting some SNF patients that we wouldn’t have otherwise gotten, particularly directly from physicians,” April Anthony, CEO of Encompass’s home health and hospice business, said Tuesday.
For the Birmingham, Ala.-based Encompass, the opportunity for even more SNF diversions rests in its network of inpatient rehabilitation facilities (IRFs), which executives argued could provide better long-term care and cost outcomes than SNFs despite the initial higher expense of an IRF stay.
“From a post-acute perspective, the patients that we’re treating in our IRFs really cannot go directly home from the hospital,” Encompass CEO Bruce Tarr said. “They require an inpatient stay. So those patients, it becomes a choice between an IRF and SNF in almost all cases — and I would ask you for your opinion as to how the skilled nursing facilities have distinguished themselves during this pandemic.”
But for Amedisys, which does not operate IRFs, consumers’ and physicians’ aversion to nursing homes in the wake of COVID-19 provides a clear justification for a more aggressive “SNF-at-home” model.
“‘We really see that model as being a realistic future for us, and for home care in general,” Gerard said.
It may not necessarily be feasible yet: To truly succeed, having SNF-level care in the home would require coverage of a variety of ancillary services, including non-skilled home care aides, technology, meals, and transportation services, Gerard noted. Increasing Medicare Advantage penetration may help make that a reality, but the funding mechanisms for such a complex grouping of services remain nascent.
Amedisys has already started the higher-acuity home care process by investing in dialysis and telemedicine, and while Gerard admitted that SNF-at-home is in its early stages of viability, he was confident in the model’s ability to replace institutional post-acute care in many cases.
“If it can be done in the right way, you can see a complete shift of the type of patients that normally will spend weeks in the SNF before they go home; [they] can actually go home and get that same care in the home,” Gerard said.
The model has gained traction elsewhere: The Des Moines, Iowa-based health system UnityPoint began developing its SNF-at-home program last year, combining home health services and non-medical home care into a more comprehensive alternative to brick-and-mortar SNFs.
“Our goal is definitely to provide the right level of care in the right setting,” Mag VanOosten, president and chief clinical officer of UnityPoint at Home, recently told our sister site Home Health Care News. “We really believe home is where people are meant to recover.”
Kusserow did acknowledge that Amedisys does partner with SNFs for hospice and home health services.
“We want to make sure we’re the ones going into these SNFs,” he said. “But at the same point, we compete with them.”
And as the COVID-19 pandemic shows no signs of slowing, both inside nursing homes and among the general community, Kusserow and Amedisys believe that more referring physicians will agree with that sentiment.
“As we continue to innovate as an aging-in-place company, we believe there is compelling post-acute market share capture proposition from offering a SNF-at-home product, and finding other ways to capture patients that historically would have received care in facilities,” Kusserow said.
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