September 13, 2020, Alex Spanko, Skilled Nursing News - Major home health care provider LHC Group (Nasdaq: LHCG) is already preparing for a future in which in-home services don’t necessarily replace skilled nursing facilities entirely, but pick up growing levels of slack after reform efforts result in stricter caps on capacity.
“I think in the next five years, the SNF industry is going to undergo a significant transformation,” Bruce Greenstein, LHC’s chief strategy and innovation officer, said during a virtual presentation at the Baird Global Healthcare Conference last week. “The facilities themselves are designed very well for efficiency but not infection control. You can see policies that will roll out over the next two years that will help the SNF industry, but reduce their capacity.”
That bold prediction builds on the company’s existing attempts to capitalize on growing demand for in-home care as an alternative to nursing homes as the COVID-19 pandemic continues to rage through institutional care settings.
Back in June, Greenstein told SNN’s sister site Home Health Care News that the trend of hospital patients bypassing SNFs entirely and heading straight home was already “picking up more steam right now,” with the acute settings themselves driving the flow.
“Hospitals were calling us and saying, ‘Hey, is there a way that you can help out in taking patients that would otherwise go to the SNF?’” he said. “So early on, we started to work with hospital partners in building this.”
Speaking last week, Greenstein — who served as the chief technology officer for Department of Health and Human Services (HHS) for about a year early in the Trump administration — emphasized that nursing homes still play a role in the overall health continuum.
“We view SNFs as a vital and important part of the American health care system, so we don’t have a program that is trying to eviscerate them,” he said. “But we know there is a need today for options for families and hospitals to discharge safely and appropriately.”
While Greenstein’s prediction of future restrictions around nursing home capacity remains theoretical, the pandemic has prompted serious public discussion about the fate of the traditional institutional care model.
The Green House Project, a non-profit that helps developers build small-home style nursing campuses with all-private rooms and strict caps on individual buildings’ capacity, has received particular attention, particularly given the model’s impressive COVID-19 track record.
Greenstein and LHC Group aren’t alone in their bullish attitude toward the potential for more SNF-to-home diversions in the wake of the COVID-19 pandemic.
“I think the whole period of this pandemic helps to really put an exclamation point on our goals and our quality outcomes,” Encompass Health Corporation (NYSE: EHC) CEO Mark Tarr said during a virtual conference held by investment banking firm William Blair in mid-June. “From a more global standpoint, it’s helped to point out the differences of the post-acute settings and how certain patients have much better outcomes.”
Paul Kusserow, CEO of fellow home health heavyweight Amedisys Inc. (Nasdaq: AMED), in June spoke of the potential for his company to steal away more “jump-ball business” from nursing homes, referring to the portion of lower-acuity residents who have historically been able to receive care either at home or in a SNF following a hospital stay.
“We think now, obviously, that business is going to shift into the home,” Kusserow said. “We also think there’s actually another 10% to 20% — probably close to 10% — that, if we could add some custodial care to it, we can take care of these patients quite well. We need to be able to figure out how to add that custodial piece, and there’s a big ability to steal share.”