With vendors such as Best Buy backing away from hospital at home, what does that say for the future of the care model?
Health system leaders told Becker’s they still believe in hospital at home despite Best Buy offloading Current Health, a remote patient monitoring company it bought four years ago for $400 million. The tech retailer also restructured Best Buy Health to the tune of $109 million because of slower-than-expected growth from hospital at home.
“Hospital at home isn’t dying; it’s just shedding its tech tourism phase,” said Michael Maniaci, MD, chief clinical officer of advanced care at home for Rochester, Minn.-based Mayo Clinic. “What’s left are the true builders: health systems, digital clinical leaders and care-at-home architects who know how to deliver complex care outside four walls.”
Somerville, Mass.-based Mass General Brigham, which has partnered with Best Buy on hospital at home, will keep pursuing and expanding the care model regardless of what vendors in the space do, said Stephen Dorner, MD, chief clinical and innovation officer of Mass General Brigham Healthcare at Home.
“Best Buy Health’s financial decision to restructure their healthcare work will not disrupt our approach or affect our day-to-day operations,” he said. “We have seen firsthand what extensive research has borne out — that high-quality acute care at home transforms patient satisfaction and clinical outcomes. We will continue to collaborate with forward-thinking partners who share our vision to deliver that safe, exceptional care and experience to our patients and their families.”
Other retailers, such as Walmart and Walgreens, have similarly discovered the difficulty of facilitating direct-to-consumer healthcare, said Eric Alper, MD, chief quality and clinical informatics officer of Worcester, Mass.-based UMass Memorial Health.
“As we have seen over and over again, it’s hard to run an effective healthcare delivery system and earn a significant overall margin,” he said. “It’s hard for large publicly traded retailers to earn the types of margins that shareholders expect in this space. So it doesn’t surprise me that companies like Best Buy are exiting the space.”
In June, hospital-at-home company Medically Home merged with at-home care provider DispatchHealth under the DispatchHealth brand. Dr. Maniaci compared what is happening in the market to the EHR business 15 years ago, when there were numerous players; now, the space is largely dominated by Epic and Oracle Health.
“Walking into a hospital-at-home conference three to four years ago, there were probably 15 or 20 booths, different people saying, ‘We’re an RPM company. We want to do hospital at home. We have technology that can do it, and we’re sponsoring here, and we’re going to talk to you about our thing,'” he said. “And the same conference I walk into last week has five [booths] at it.”
These moves are not an indication that hospital at home has failed but rather that it needs to recalibrate, said Maura Nazario, MSN, RN, vice president and chief nursing officer of home-based services at Altamonte Springs, Fla.-based AdventHealth.
“The recent exits of some tech companies and vendors from the hospital-at-home space reflect a broader inflection point,” she said. “As the sector matures, operational complexity, reimbursement uncertainty and the need for health system-led innovation are becoming more apparent.”
To truly thrive, hospital at home will require more support from the government — the CMS waiver for acute hospital care at home expires Sept. 30 — and health systems themselves, Dr. Maniaci said. He said the sweet spot for generating positive margins from hospital at home is an average daily census of 25 to 30 patients.
“No tech company who’s supplying the virtual hospital space can survive with a customer who has three to five patients in it,” he said. “The whole hospital world has to continue to expand with volumes and make this worthwhile to the people investing into it, both our healthcare systems and the tech companies that want to stay on board.”
