As a recovering bone marrow transplant patient, Ruth Ann Bailey didn't like the hospital, the smell of its sanitized sheets or the sound of its constant intercom.
She endured its environs for 20 days after her first transplant, then for another 17 days following her second transplant.
But she likely would have stayed even longer if Humana, her managed-care insurer, hadn't hooked her up with Coram Healthcare Corp., a Denver, Colo.-based home-care provider. The typical length of stay for a bone marrow transplant patient is 40 days at a cost of $3,800 per day, according to Milliman & Robertson, a Radnor, Pa.-based consulting firm.
"I wanted to stay at home," Bailey said. "Home is familiar and safe. The hospital is disorienting, very chaotic and not very restful. It gets to be intolerable."
Coram is among the growing number of home-care providers competing to serve patients like Bailey who traditionally haven't been catered to by for-profit healthcare providers, much less fought over.
They are patients with chronic diseases such as asthma, diabetes, hemophilia, cancer, cystic fibrosis or AIDS. They are patients who have been diagnosed with diseases that are the most difficult to treat and the most costly.
In the past, their options in many cases have been limited to hospital stays and treatment at publicly funded clinics. Few, if any, market incentives encouraged the development of alternatives.
But now, managed-care cost controls coupled with technological advances are driving major changes in how these patients can receive care.
"Those things have combined to ask us in the home-care industry to look at what could be provided in the home that previously was in the hospital," said Gary Mangiofico, vice president of clinical services for Apria Healthcare Group in Costa Mesa, Calif.
And payers are expecting the home-care industry to provide some answers. "The managed-care companies are spending 90% of their costs on 10% of the people," said Robert Wasserman, vice president of research for Southeast Research Partners in Boca Raton, Fla. "Rather than deny primary-care visits, they're trying to lower the costs of the really high-cost illnesses," he said.
As a result, home-care companies are finding a growing demand for chronic-care programs that help managed-care plans control costs and get access to a wide range of services.
"The goal is to decrease the total length of stay at the hospital and to reduce the need for re-hospitalization," said Linda McBride, director of transplant services for Coram. "Our job is to be the eyes and ears of the transplant center at the patient's home so we can identify problems early and help create an intervention so that the problem doesn't become a catastrophe."
Through the use of special equipment and drug therapies, highly skilled home-care nurses are now able to treat rejection episodes, administer antibiotics, inject platelets and perform other functions for transplant patients that used to be restricted to the hospital.
These highly specialized and high-risk services are different from the image many people have of home care.
"I thought home care meant people who couldn't cut it in nursing, and they wanted to try it out," Bailey said. "It was very surprising to me that (my nurse) was a specialist in bone marrow transplants and HIV patients. That made me feel very comfortable."
Despite their complexity, Coram estimates that such high-tech home-care services can cost less than 60% of inpatient care at a hospital, where overhead, staff, housekeeping and equipment costs all add up.
Such savings have helped Coram win contracts with more than 700 managed-care organizations. The company expects to see $25 million in revenues from its transplant program this year. And it plans to continue building its chronic-care programs.
"We are emphasizing care for clinically complex patients, care for people with HIV/AIDS on multiple drug regimens and pre- and post-transplant patients," said Donald Amaral, Coram's president and chief executive officer, in a recent earnings report.
The company announced last week that it has joined with Managed Health Services, Milwaukee, and National Jewish Center for Immunology and Respiratory Medicine, Denver, to offer an asthma-management program for a managed Medicaid plan in northern Indiana.
In addition, Watts said the recently announced $655 million merger of the company with Integrated Health Services will bolster its existing programs by providing access to a network of subacute, long-term-care and rehabilitation services.
Over the summer, several other of the largest home-care companies made bold, multimillion-dollar moves designed to meet the chronic-care needs of managed-care organizations.
In June, a year after it was formed with the merger of Abbey Healthcare Group and Homedco Group, Apria Healthcare Group purchased Vitas Healthcare Corp., the nation's largest hospice-care company, for $212 million. Vitas, based in Miami, provides hospice care for adult and pediatric patients diagnosed with terminal illnesses such as cancer, cardiovascular disease, Alzheimer's, AIDS and liver disease.
For Apria, the purchase is a chance to complement its already established infusion and respiratory therapy programs. It also has developed chronic-care programs for asthma, chronic obstructive pulmonary disease and HIV, and plans to create programs for oncology, congestive heart failure and diabetes patients.
"Vitas provides us with the capability of monitoring patients across the entire spectrum of care," said Mangiofico. "We don't have to transfer patients to another provider. We are positioned to be able to manage patients who need chronic care across the entire continuum."
In July, Olsten Corp. completed its
$300 million merger with Quantum Health Resources, an Indianapolis-based company that specializes in providing alternate-site therapies to patients with chronic diseases.
The deal allowed Melville, N.Y.-based Olsten to expand the home infusion, disease management and pharmaceutical services of its Olsten Kimberly QualityCare subsidiary, the nation's leading home-care provider.
Before the merger, Olsten's programs had emphasized home nursing care for diseases such as asthma and diabetes. Quantum had focused on providing drug therapies at home for hemophilia, genetic emphysema, cystic fibrosis, primary pulmonary hypertension and other illnesses that require the use of intravenous drugs.
Pete DeComo, Olsten's senior vice president of infusion therapy services, said the combined companies can now offer managed-care organizations "one-stop shopping" to meet the needs of enrollees with both rare and more common chronic illnesses.
While reimbursements cover most of the major drug therapy costs, he said, the basic risk is that more enrollees than anticipated will be diagnosed with chronic illnesses.
"No one really has good data when they enter an agreement," he said. "Most rates are set by competitive pressures. The pertnership agreement has to be such that you can adjust the rate."
Researcher Wasserman said it's too early to tell whether the companies' aggressive moves into chronic care will pay off.
"The partnerships between managed care and home care are fueling the growth of the business, but home-care companies have to be careful that they can be profitable even if they get all the new business," he said.