Nursing homes and home healthcare companies are branching into new lines of business to increase revenue as demand for post-acute care rises and Medicare and Medicaid reimbursements stagnate.
It is a trend that Ash Shehata, a partner at business consulting firm KPMG, has been tracking for the past two years. Healthcare providers are under increasing pressure from insurers to quicken the move of patients to less-costly settings.
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“Hospitals want to work with community partners who can provide services that will keep patients safely in post-acute care or return them to home without creating the recurrence of an inpatient admission,” Shehata said.
Here's a look at what some post-acute care providers are doing.
Pharmacy services
Nursing homes and senior living facilities typically contract with long-term care pharmacies for patient medication. Last year, Elkhorn, Nebraska-based Vetter Senior Living decided to capture some of that revenue. It partnered with Topeka, Kansas-based Senior Rx Care to open a pharmacy serving Vetter’s 2,600 residents at 25 nursing homes and 16 senior living facilities in Nebraska, Missouri and Wyoming.
Falling occupancy at Vetter's nursing homes during the COVID-19 pandemic forced the nonprofit to pursue other lines of business to increase revenues, said Glenn Van Ekeren, the nonprofit's president. Although he would not disclose revenues, Van Ekeren said he “has been very comfortable with the profits that the pharmacy has been able to produce so far.”
The joint-venture also provides pharmacy services to two assisted facilities that Vetter Senior Living does not own. Van Ekeren said one goal in 2024 is to expand the services to more senior living providers.
Dialysis treatment
Kidney failure affects approximately 37 million Americans and 40% require dialysis, according to the Centers for Disease Control and Prevention. Patients with kidney failure who are in nursing homes or rehabilitation hospitals usually travel to dialysis centers for treatment. A small, but growing number of post-acute care providers offer dialysis at their facilities.
Encompass Health began rolling out dialysis suites at some of its 157 rehabilitation hospitals a few years ago and about half of its hospitals offer dialysis onsite.
Evangelical Lutheran Good Samaritan Society opened its first hemodialysis suite two years ago at Sioux Falls Village, a nursing home in Sioux Falls, South Dakota. Up to eight patients can receive treatment at a time, according to Aimee Middleton, vice president of operations for the nonprofit. Sanford Health, which owns Evangelical Lutheran Good Samaritan and provides dialysis services at nearby Sanford USD Medical Center, staffs the nursing home’s dialysis suite, she said. Middleton estimated 50 residents have been treated since the suite opened.
Having dialysis and other services in one location saves transportation costs and has helped the nursing home attract patients in need of both dialysis and therapy.
“Patients can do their physical therapy and dialysis at the same location and that allows the care team to develop a comprehensive care plan,” Middleton said. “We can coordinate that and it makes a big difference getting that resident out of the hospital and into a lower level of care sooner.”
A 2022 study published in Hemodialysis International found patients receiving dialysis at nursing homes had better clinical outcomes and were at lower risk of infection. With dialysis expected to increase in nursing homes, the Centers for Medicare and Medicaid Services toughened regulations for dialysis treatment at nursing homes last spring. CMS required stricter agreements between nursing homes and dialysis companies that provide services. It also required nursing home operators to develop emergency plans.
Mental Health
Some home health providers are finding behavioral health is a good strategic fit, as the CDC estimates 1 in 5 adults struggles with a mental health issue. Home-based mental health services can be less costly than facility-based care and can help home health providers negotiate more lucrative contracts with Medicare Advantage plans.
In January, Dallas-based Elara Caring began offering behavioral health services through virtual and in-home visits to Medicare patients in 11 of the 16 states it serves. Social workers and nurses provide services for Medicare patients with depression. Psychiatric nurses treat patients with more severe mental health issues. Revenues from behavioral health represent about 7% of the company's revenues, but could grow to as much as 25% as the company scales the business, according to Elara Caring CEO Scott Powers.
Last year, Bayada which provides home health services in 22 states, began offering home-based treatment for children and young adults with autism in New Jersey. The Moorestown, New Jersey-based company has been offering behavioral health services in Hawaii for nearly a decade. Behavioral health comprises only about 1% of revenues, but has the potential for growth, CEO David Baiada said.
