The leader of post-acute services of a major hospital system in the Midwest was almost giddy with excitement in a recent meeting of her home healthcare peers from nearby states.

“With Medicare readmission penalties on the horizon, the rest of my system is suddenly noticing me,” she said. “We're being engaged with a level of urgency and interest I've never seen before. Now, instead of being seen as a drag on the system's bottom line, they're recognizing our potential as a major profit center.”

The willingness by hospital leaders to cast a fresh eye on home healthcare is driven by more than the threat of readmission penalties, however. They are also recognizing the need to build relationships across the continuum of care in preparation for accepting greater levels of accountability for patient and population health in their communities. Even if accountable care organizations never take flight under Medicare, most hospital system leaders agree that, at minimum, their feet will be held to the fire to do more to improve patient health, especially among patients with multiple and costly chronic conditions.

In the short term, strategies for improving the transition from hospitals to post-acute settings are attracting the most attention and resources. One example, building on transitional care models, is the idea of “health coaches,” who prepare patients and their families as patients leave the hospital, offering education in self-care, support in coordinating follow-up appointments, and even making home visits to check on progress. These models have proven to be highly effective in reducing preventable hospitalizations and improved patient satisfaction.

Yet, over the long term, we need to challenge the system to do more than simply ensure a safe discharge from the hospital to the home or a post-acute facility. It is certain that poorly managed discharges from the hospital are a huge source of waste and risk, but patients with multiple chronic conditions (especially older Medicare patients) face a host of other profound challenges long after both the discharge and the all-important 30-day window.

Juggling multiple specialists, managing 10 or more medications, maintaining daily functioning, battling the debilitating effects of depression and dementia, or dealing with a spouse's care needs all present huge challenges to many of these patients and undermine their health goals.

Home healthcare is betting its chronic-care expertise is perfectly suited to ACOs.

This is where the expansive capacity of home healthcare comes in. Innovative thinkers such as Beth Hennessey and Paula Suter, both of Sutter VNA & Hospice, part of Sutter Health, Sacramento, Calif., have built a powerful case in the literature documenting the ways home-health agencies can leverage their long, deep and successful experience managing patients with complex chronic conditions in the home. For more than 100 years, the best agencies have deployed multidisciplinary teams of nurses, therapists, social workers, aides and others to the homes of patients with some of the most vexing chronic clinical conditions. These highly trained teams provide a host of assessment, treatment, education, coordination, referral, monitoring and behavior modification counseling services to achieve superior quality and financial outcomes, as documented in at least one published study.

As Hennessey, Suter and others have noted, however, home health's real potential has barely been tapped. To some degree, home health has been constrained by Medicare's limited vision of what these agencies can do and be paid for—namely, intermittent care for a limited period of time for homebound patients. Despite their ability to support patients with chronic conditions indefinitely, and to help them improve their self-care skills and independence, Medicare currently will not typically reimburse home-health agencies for such an extended role, and certainly not indefinitely.

Medicare's current skepticism about the value of such “chronic-care coordination” services has not stopped many home-health agencies from strengthening their capacity to provide them to more patients, partly in response to growing demand from less skeptical quarters. Progressive hospital and physician leaders busily constructing ACOs, for example, are beginning to ask home-health agencies for proposals to share responsibility for achieving long-range care goals for these complex and costly patients. For their part, the agencies are betting that their chronic-care management talents are perfectly suited to help ACOs achieve their clinical and financial goals.

Rapid adoption of these chronic and transitional care models, and a wider acceptance of the value of a partnership between hospitals and home-health agencies, depends on better data proving their effectiveness. Fortunately, help is on the way thanks to the Patient Protection and Affordable Care Act. A combination of pilot and demonstration programs will create opportunities to collect extensive data and conduct solid evaluations. Assuming the evaluations support the findings of cost-effectiveness and good clinical outcomes already reported, the challenge for home health will quickly turn to ratcheting up capacity to meet demand from ACOs and anyone else striving to improve the care of these patients.

From being seen all too often as a financial drag to becoming an engine for clinical excellence, financial success and community health, home healthcare will become a hotly sought-after partner. That's a transformation that will soon captivate the imagination and attention of policymakers and academics, finally bringing them in line with the general public, which for more than 100 years has consistently been saying its favorite setting for care is right in the home.

Andy Carter is president and CEO of the Visiting Nurse Associations of America, Washington.