In the midst of sweeping industry-wide change, hospices are still contending with the ongoing COVID-19 pandemic that has affected almost every aspect of their businesses. As this difficult year comes to a close, hospice leaders are looking ahead to 2021 with their minds on leveraging the expansion of telehealth, encouraging equitable access to care, industry consolidation and the implementation of value-based payment models.
Hospice News spoke with a group of hospice and health care leaders about what they see on the horizon for five key trends that came to the forefront during 2020.
Telehealth expanded rapidly across the health care continuum due to efforts to prevent coronavirus infection. These developments will likely shape health care for years to come, including for hospice and palliative care providers. CEOs and other leaders in the hospice space generally foresee continued growth and utilization of telehealth beyond the pandemic, but questions abound regarding how Medicare will reimburse providers for these services.
“Pre-COVID-19, investments in telemedicine were slowed by lagging consumer adoption, provider adoption, and reimbursement. When the industry eventually returns to ‘normal,’ providers will face the choice between traditional capital investments and virtual alternatives. Without reimbursement, providers will almost certainly return to traditional capital spending, a decision that will leave many consumers without a choice, especially the most vulnerable in remote/rural communities where primary care is limited and significant health disparities exist.”
— Nick Wesfall, CEO of VITAS Healthcare, a subsidiary of Chemed Corp. (NYSE: CHE)
“There will always now be some telehealth in hospice care delivery, because it has some great benefits. You’re going to see hospices sort out what works with telehealth and what does not work, and they’ll use it in ways that will make them more efficient.We’re all waiting for the reimbursement issues to be completely settled. The worry is that I could see [the U.S. Centers for Medicare & Medicaid Services] and [the Medicare Payment Advisory Commission] saying they want to pay us less because we are providing some lower cost services.”
— Susan Ponder-Stansel, CEO of Alivia Care
“To take telemedicine to the next level we’re going to need to have more patient contact and innovation in the home, whether that’s through remote patient monitoring, or 24/7 surrounding care models. We’re actually looking now at potential advancements in robotic care.There can still be some innovation around that kind of space that would help people feel like they’ve got some resources around the clock.”
— Jonathan Fleece, President and CEO, Stratum Health
Pursuing Equitable Access to Care
The issue of equitable access to care came to the forefront during 2020 in the wake of violent incidents against African Americans and subsequent civil unrest. Hospice leaders nationwide have affirmed their commitment to reaching underserved communities, but whether such initiatives will continue to pick up momentum remains to be seen.
“This shined the light on underserved populations, including those in rural areas who just don’t have access to care. I don’t think a one-size solution will work for every underserved group. It’s going to take several iterations and approaches as well as some time, patience and continued investment to find solutions that work. Rather than us asking patients to fit into this model that we have created for hospice, we’re going to have to be willing to do some things differently.”
— Ponder-Stansel, Alivia Care
“We have a long way to go. The onus is on us as health care providers to bridge that gap and try to provide whatever resources and education we can to allow these different communities to have this tremendous benefit of hospice care. I’m absolutely convinced that hospice is the greatest value in health care, and it’s a benefit that these folks need to have.”
— Heath Bartness, Founder and CEO of St. Croix Hospice, a portfolio company of H.I.G Capital
“I’m cynical about the broader health industry’s efforts around this. There was a lot of talk about this issue as we started to experience social unrest in the June and July timeframe, but the subsequent action around it has been super thin. We can win in the marketplace when we become a better employer and when we get better at serving a diverse population. You have to get right to the soul of the company to start to make these kinds of changes.”
— Sachin Jain, M.D., CEO, SCAN Health Plan
“I hope that those efforts will crescendo with a transition in [presidential] administration. The incoming administration hopefully has a different perspective on what health equity and access to resources are and will make it a priority. It is one of the fulcrums upon which the entire health system and a significant portion of the U.S. economy balances, in addition to being the right thing to do.
— Timothy Ihrig, M.D., Chief Medical Officer, Crossroads Hospice & Palliative Care
“We are going to dedicate an entire leadership team to diversity, equity and inclusion, not just looking at our organization, but also out in the community. We need to make sure that we’re serving all segments of the community around the missions that we serve.”
— Rafael Sciullo, President & CEO, Empath Health
Navigating Value-Based Care Models
Hospice providers stand at the threshold of value-based care. CMS is planning to test coverage of hospice through Medicare Advantage starting in 2021 through the value-based insurance design model demonstration. Also coming next year is the Centers for Medicare & Medicaid Innovation’s Primary Cares initiative, including the Serious Illness Population payment model and direct contracting programs.
“Predictions rest on questions about whether national plans will participate in one of their major markets, and if dominant providers that are not integrated with risk-bearing entities (RBE) will participate in smaller markets. While many of these experimental models haven’t been successful, only time will tell whether these new iterations are truly designed to achieve the coordination of services and outcomes desired. Regardless, I think one thing the pandemic has reinforced throughout the country is for patient’s preference, when possible, to receive care at the place they call home.”
— Westfall, VITAS Healthcare
“There is a tremendous value from a futuristic payer universe where hospices can really participate. Hospice has never had the full breadth of opportunity to really do that. The hospital or health system has really been the party that’s been invited to the table, but I’m hoping that we get that opportunity because I know that we can deliver.”
— Bartness, St. Croix Hospice
“Hospices over time will see a lot more managed care companies become their competitors, and they’ll see their service become more commoditized. Managed care manages costs, so I think that there’s going to be real pressure on hospices to reduce costs and to look at how much they’re charging those managed care companies for the outcomes that they get. It will change the benefit as we know it.”
— Ponder-Stansel, Alivia Care
“You’re going to see higher degrees of integration and coordination between health plans and hospice providers. At a high level, you’re seeing more Medicare Advantage entities actually, thinking about getting into the hospice business. There’s lots of innovation happening in the hospice space. What’s been remarkable about that industry is how much it has pivoted and changed in the face of COVID-19. This higher degree of integration is only going to accelerate that pace of change within the hospice community.”
— Jain, SCAN Health Plan
Rising Industry Consolidation
Among the various segments of the health care industry, hospice continues to be the one to watch in the mergers and acquisitions market, even as valuations soar and multiples continue to hit record highs. In 2020, transactions slowed early in the year as providers turned their attention to responding to the pandemic. Activity has since ticked back up as demographic tailwinds and rising demand continue to whet the appetites of investors and hospice companies looking to grow.
“It’s going to be a market space where a lot of the big insurers, private equity and health care organizations are going to seek to acquire organizations that have an expertise in end-of-life care. It coincides with value-based practices. The payers look at it as a financial play; the health systems are trying to mitigate downside financial risk. They’re held accountable to value outcomes, which include decreasing per capita expenditures. We’ll continue to see acquisition of organizations that can be integrated into a payer or health care delivery system.”
— Ihrig, Crossroads Hospice & Palliative Care
“Without a doubt the pandemic has applied pressure to certain providers within the health care space which is going to accelerate what is already a hot marketplace for M&A activity within home care. This disruption, along with an ever-growing appreciation for the value high-quality end of life services provide to the health care community, continues to drive interest for existing providers to expand their footprint as well as new entrants into the space. Significant revenue loss occurred across nearly every area of the healthcare industry, and many providers will be unable to survive independently without consolidation.”
— Westfall, Vitas Healthcare
“We’re starting to see programs that have grown quite significantly, and at that level there’s a critical need to have robust clinical and business systems. That results in significant capital expenses. Some of these operators are not going to want to make that investment or take that risk. They’re going to look at potentially divesting their business.”
— Bartness, St. Croix Hospice
Stemming the Tide of Staffing Shortages
COVID-19 put new staffing pressures on hospice and palliative care providers, even as organizations continue to wrestle with existing clinician shortages resulting from limited availability of specialized training, burnout, and retirement as employees age.
“COVID-19 has exacerbated staffing shortages and turnover. A good number of our colleagues have accelerated plans to retire. We also have a real shortage here in Florida of higher education graduates in health care. That’s a systemic issue that requires more funding for teachers in health care disciplines, which will then lead to more open slots for students and then ultimately lead to graduates.”
— Fleece, Stratum Health
“We have had to increase our recruitment resources [during the pandemic]. I think having those internal resources that are constantly monitoring the opportunities out there for additional colleagues can really help us move our vision forward. We have to do a lot of collaboration to support our colleagues, during the pandemic or otherwise, whether through appreciation, gestures or policy changes.”
— Sciullo, Empath Health
“We’re going to have a continued labor shortage. The nurse and social work workforce averages in their late 50s and mid 60s. They’re going to be leaving the workforce in the next few years. The solutions to me are not really a hand, particularly with some of the challenges we’ve had with immigration. Many nurses and the certified nurses aides were folks who came to this country as immigrants, and that’s been curtailed so much.”
— Ponder-Stansel, Alivia Care