The home health care and hospice industries both experienced growth in 2017, according to recent data shared in an article by the National Homecare & Hospice (NAHC). That’s good news for both sectors and for those of us committed to helping to protect these organizations by facilitating their growth with insurance products that serve to safeguard their patients, employees, property and assets.
According to data from Excel Health as cited in the NAHC article, by the end of December 2017 there were 57.7 Medicare beneficiaries, representing growth in the Medicare-enrolled population of 2.2% or 1.2 million citizens over 2016. In the next 30 years, this number is expected to grow to 92.6 million.
Hospice Growth
Medicare enrollees admitted to hospice grew 6.5% in 2017 to 1.3 million with nearly half of the admissions for patients over 84 years old, and 13% under 70 years of age. The average length of a hospice stay was 62 days for patients who died or were discharged in 2017, with significant variations from state to state.
The data also indicates that as the Medicare population grows older, hospice admissions will significantly increase even if no other change drivers (such as physician referral patterns or increasing numbers of hospices) are present. Additionally, according to the Centers for Medicare & Medicaid Services (CMS), the increase in the number of for-profit hospices is in part contributing to the growth. For-profit providers comprised 30% of the 2,255 hospices in operation in 2000, and by 2016, two-thirds of the nearly 4,400 hospices in operation were organized as for-profit enterprises. This along with an aging Medicare population and more awareness of hospice is responsible for the sector’s growth.
Hospice utilization in 2017 among Medicare enrollees inched up 1.4% from 2016, standing at 47.7% among Medicare decedents. Hospice expenditures rose to $17.5 billion last year.
Home Health Care Growth
The home health care sector saw 3.7 million home health admissions for the four quarters ending September 30, 2017, which represents a .5% growth rate over the same four quarters in 2016. While the growth in this sector was significantly lower than for hospice, the data points out a couple of important factors to consider. Of the ten states that saw declines in home health admissions, four (Florida, Texas, Illinois and Michigan) are the subject of active moratoria as a result of high home health utilization and focused enforcement activity. This could suggest a more cautious approach on the part of home health agencies regarding admission of new patients for whom eligibility may be questionable. In addition, two states, Illinois and Louisiana, have experienced population declines.
Eight of the ten states that show home health admission increases had fewer than 100 active home health agencies in 2016, which suggests potential expansion opportunities in markets that are not yet saturated. All are rural states (Idaho, Wyoming, Hawaii, New Mexico, West Virginia, North Dakota, Utah, and South Dakota), according to the data, and of the 11,623 active home health agencies in 2016, these states together accounted for only 6% of the total.
From the third quarter of 2016 to the third quarter of 2017, home health utilization rates ranged by state, with a high of 14.7% utilization precipitated by direct physician referral in Florida, to a low of just 2.7% in Hawaii. Approximately three-quarters of all home health episodes originate with a physician visit and referral to home health without an inpatient stay, CMS estimates.
Florida, Massachusetts, Michigan, Connecticut and Mississippi had the highest utilization rates, ranging between 12% and 15%.
California, Texas and Illinois had “surprisingly low” utilization rates compared to other metrics, according to the report’s data, as Texas has the most home health care agencies and more than Illinois and California combined. California, meanwhile, has the largest Medicare population in the nation and also the largest number of physicians to treat them, but is only ranked 7th for utilization from physician referrals. Illinois, ranked 11th for overall utilization of home health services, has the 4th-highest number of agencies; is 7th in terms of beneficiaries and sixth for physicians.
“In these three high profile states with large Medicare populations, it would certainly seem that there is opportunity for providers to increase both their census and utilization of home health services,” the report concluded.
About Manchester Specialty
Manchester Specialty provides total business insurance solutions to home health care and hospice care providers. We can help you provide the following insurance lines to your clients: General Liability, Professional Liability, Workers’ Compensation, Management Liability, Cyber Liability and Non-Owned & Hired Auto insurance, among other key coverages. For more information about how we can help you protect home health care and hospice providers, please contact us at 855.972.9399.
Sources: NAHC, Excel Health