What the chaos era for Netflix and Disney spells for healthcare

The home might grow noisy and crowded in the years to come. 

One of healthcare's few likelihoods for any strategic plan is that, more and more, care once delivered in their brick-and-mortar facilities will move into patient homes. But as comforting as that well-accepted probability may be in an industry eager for any sense of certainty, it still comes with its fair share of question marks. 

The boon of home care will be driven by a culmination of advances in digital health capabilities and more favorable payment. Home care volumes are projected by Sg2 to rocket by 20 percent over the next 10 years, while inpatient hospital volumes are set to increase by 2 percent in the same time frame. McKinsey estimates that up to $265 billion worth of care currently delivered in traditional facilities for Medicare fee-for-service and Medicare Advantage beneficiaries could shift to the home by 2025. 

What's the caveat given the rosy projections? 

"Organizations could be at risk of losing control over that patient population," Trine Tsouderos, senior vice president of intelligence for Vizient and Sg2, said. "We want hospitals to understand that this is likely going to be a site of care that's going to see a lot of disruption. So in the same way that we've seen third parties enter the ASC and ambulatory space, we need to start anticipating that same trend may take hold in the home space."

Streaming wars are one analogy that comes close to the enhanced choice consumers will have for care in their home. Streaming disrupted traditional content gatekeepers of movie studios and TV networks, much like home care could disrupt the traditional care gatekeepers of health system contracting and networks.

"When you move into the home, even in this day and age, you're sort of returning to the ability to a la carte your care. You might have these third parties offering pieces of care that used to be delivered only by the hospital," Ms. Tsouderos says. "You can imagine what that will end up looking like — confusing for anybody involved in that care and very fragmented. People might have a whole lot of options to sort of piece things together for themselves if there's no overarching provider coordinating it all for them." 

Streaming may have given us a preview of what healthcare's great migration into the home could resemble, and it's crowded and noisy. Not only do consumers have an overabundance of subscription streaming platforms to choose from, but the platforms increasingly offer redundant content — dueling documentaries about the same true crime events, miniseries about guests of high-end resorts, reality TV dating shows anchored in the same process of elimination. 

Viewers search for content spread out across a dozen streaming platforms. The churn rate among U.S. viewers has remained consistent for years — the most recent figures from Deloitte show the average cancellation rate for streaming services at about 37 percent since 2019. In an attempt to retain or draw people back, streamers keep turning out a greater volume of shows and content than possible via linear television while dropping big money on individual titles to draw attention from new subscribers and cut through the self-made noise.

"TV has always been first and foremost a business," Time wrote in a 2023 piece calling this year the chaos era for streamers. "Yet what feels noteworthy here is not the expediency of streaming executives' decision making; on the contrary, it's the randomness and uncertainty and outright flailing that seems to surround so many recent strategic shifts." 

The streamers' chaos era might be pre-dating the same for healthcare. This is why Tori Richie, senior director of the Sg2 Intelligence team, advises health systems to go holistic with a home care strategy.

"We highly encourage leaders who are taking a portfolio approach to care at home to make sure that they think through that full suite of services that a particular patient cohort is going to need," Ms. Richie said. "Instead of thinking about single-point solutions, we find that organizations are much more successful at scaling care at home initiatives when they do take that portfolio approach."

Health systems' strategic plans are generally in a vulnerable place right now, with COVID-19 rendering pre-pandemic plans less relevant, thin finances pausing or slowing investments, and VUCA — volatility, uncertainty, complexity and ambiguity — frosting most decisions about health system access, costs and reimbursement. 

"Many hospital organizations lost significant competitive ground during the pandemic," Kenneth Kaufman, managing director and chair of Kaufman Hall, recently wrote. "Failure to invest right now, failure to plan right now, all accompanied by a reluctance to issue additional debt poses the imminent risk of losing further ground in a healthcare marketplace that seems more random and disorganized every day." 

Health systems have no shortage of health companies bidding and investing their way into homes. Optum is bidding $3.29 billion for home health provider Amedisys in a deal facing scrutiny from the Justice Department. CVS Health completed its $8 billion acquisition of Signify Health, which uses analytics and tech to support in-home care, evaluations and service coordination for employers, physician groups, health systems and health plans. Amazon recently expanded its new telehealth service, launched in November 2022, to all 50 states with $75 self-pay appointments. 

These retail goliaths are moving toward the home at a faster clip than legacy systems have in the past. Consider "hospital-at-home," one form of home healthcare that, like streaming, received renewed attention throughout the pandemic. While it runs the risk of being seen as pandemic-born innovation, hospital-at-home dates to the mid-1990s, when it was developed by Bruce Leff, MD, a geriatrician and health services researcher at Johns Hopkins University in Baltimore. 

The strategy struggled to gain traction for years, in part because Medicare didn't reimburse for services under the model. That changed in November 2020, when CMS launched its Acute Hospital Care At Home program to let Medicare-certified hospitals treat patients with inpatient-level care at home for more than 60 medical conditions. CMS extended the program to remain in effect through Dec. 31, 2024, with 125 health systems and 295 hospitals in 37 states participating as of Aug. 14.

In addition to the risk of fragmentation in home healthcare, there are also opportunities for variation and standardization. As much as hospital infrastructure may vary, there is a level of standardization that is simply a necessity for hospitals to operate — things like housekeeping, healthy food, security and Internet. The same isn't necessarily the case for people's homes. About 1 in 5 U.S. households are not connected to the Internet at home, for instance.

"One question around social determinants of health is, if you're moving care into the home, is the home properly set up for caring for that patient?" Ms. Tsouderos says. "Do they have good internet access? Do they have someone at home who can provide transportation to physician or office visits? All of these questions are becoming really important when the care is positioned in the home — where that home is and what kind of resources that family has matter enormously."

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