We’re hoping that the Humana acquisition of Kindred ends up sending a message to the rest of the managed care industry that they might want to look again at whether a partnership with home care could be a good pay-off. Sometimes, buying the cheapest visit isn’t going to get you the best return.
On Medicare Advantage home health payment rates:
Too many of the plans pay less than cost. We’re concerned that going forward, with pressure on Medicare rates, [agencies] will no longer be able to subsidize those plans. As the proportion of patients grows on the MA side, the ability to subsidize is diminished.
So, the plans don’t yet have a willingness to accept value. You can talk to some of the large companies walking in with all kinds of data, they talk about value-based [arrangements], dynamic value, they talk in terms of readmission rates, and those conversations more often than not end up with, that’s all well and good, but how much are you going to discount your services? They just don’t see that there’s value beyond that visit itself. Beyond taking care of that momentary need. While they talk about population health, are they really doing population health?
On CMS allowing Medicare Advantage plans to start offering non-skilled, in-home care:
From what we have seen, interest has been growing in learning more, but most of the plans were already set for 2019 when CMS announced this. Anthem being one of the exceptions.
When I first contacted AHIP, America’s Health Insurance Plans, and said, I’d like to talk to you about this new opportunity, their awareness of it was limited … that’s no longer the case. They are now thinking about it. Their members are thinking about it. The Anthems of the world are coming forward, and they’re looking at Anthem and they’re looking at Humana, and maybe they’re going to let someone else take the first journey down that road, but it’s now something that’s on their radar.
I still have a cautious approach to it. I was just with a group of private-pay personal care services companies, and you can ask the rhetorical question: Would you rather sell your service for $25 an hour to a private-pay patient or $15 an hour to a managed care plan? That’s the situation that I think the industry will be facing.
We’re hoping that the industry that offers this kind of [personal care] service does not think that if they get their foot in the door, they can raise the price to what they think is a market price. We saw that happen in home health more than once, and instead, what happens is, the plan says, “If you’re not going to take our price, we’ll find someone who will.”
If I were running a private-pay company, I would be suggesting that if they pay $25 an hour, they’re going to get a highly skilled personal care workforce that can be used for more than just personal care — can be used as the eyes and ears to know when there’s something wrong starting to develop, and can be a manager, making sure [patients] see their doctor, take their medications, have food that’s fresh rather than moldy in the refrigerator. So the plan can avoid a $50,000 hospitalization by paying a few more bucks on the personal care side. I’m not sure the plans are ready to have that conversation.
Home Instead Steps Up Advertising Game With ‘The Third Stair’
By Robert Holly | October 24, 2018
A middle-aged man and woman sit down at a circular table, their arms stretched outward toward an older gentleman with silver hair, wearing a sweater vest, sitting across from them. “Dad, we need to talk about something important,” the middle-aged man says.
The important — yet difficult — conversation about to unfold is about long-term care plans and staying at home. With thousands of baby boomers turning 65 years old everyday, the talk is becoming more common.
The older gentleman immediately begins to reflect on the memories he created in the house with a woman named Martha, presumably a wife who has passed away. Martha playing the piano with all the house’s windows open. Waking up every morning to the smell of Martha cooking pancakes. Martha asking him to fix the third stair that always creaked.
That creaking third stair “is home,” the gentleman says.
“You don’t have to go anywhere, dad,” the middle-aged woman says, just before a professional caregiver walks into the house.
The emotion-packed scene plays out in Omaha, Nebraska-based Home Instead Senior Care’s newest advertising endeavor, a roughly two-and-a-half-minute video produced by Chicago-based Energy BBDO. The home care franchise company hopes its “The Third Stair” video — which has been praised by AdWeek, Biz Journals and other outlets — will help bring attention to the value home-based care offers in keeping seniors at home as they age, Home Instead Director of Advertising and Marketing Research Katie Cox told Home Health Care News.
“The real value is showing people they’re not alone,” Cox said. “There are families all over struggling with this decision on how to care for their loved ones, but they have a choice. That choice is the ability to stay at home, to be able to stay in comfortable surroundings where memories were made.”
Preparing for ‘critical point’ in the demographic shift
With about 1,130 individual franchise locations across the globe and more than $1.58 billion in systemwide sales, Home Instead Senior Care is one of the most well-known non-medical in-home care agencies in the industry.
To that point, “The Third Stair” isn’t necessarily about increasing brand recognition, Cox said. Rather, it’s about educating consumers about long-term care options and getting challenging conversations started.
“[Home care] is a service that you don’t think about until you really need it,” Cox said. “The oldest boomer is 72 and the average Home Instead client is about 78, so we’re just on the edge of this demographic shift. One of the challenges we face is really getting across this idea of choice and that there’s this option to stay at home.”
The tear-jerking video isn’t just about educating seniors and their families, however. “The Third Stair” is also meant to show professional caregivers the value of their work and how Home Instead appreciates the personal relationships they develop with clients.
“In the spot itself, we do target the senior, as well as the loved one of the senior, who’s helping to make decisions,” Cox said. “But we also target the caregiver because we know there’s a caregiver shortage that’s happening right now, and we want caregivers to understand the difference they can make.”
Employment of home health aides and personal care aides is projected to grow 41% from 2016 to 2026, much faster than the average for all occupations, according to the U.S. Bureau of Labor Statistics. With a tight labor market and sky-high turnover rates, home care executives often cite staffing as their No. 1 challenge.
All about ‘the emotional connection’
Similarly to how “The Third Stair” isn’t just about targeting seniors or their family members, the video isn’t solely about emphasizing Home Instead’s specific services. Most of the home care agencies competing in the fragmented market offer companionship services or light-housekeeping services, for example.
Instead, Home Instead and Energy BBDO chose to take a more evocative approach to get potential clients’ attention.
“We feel like our service is more about our relationship and our connection with clients over tasks,” Cox said. “That’s really what we were trying to get through in the spot.”
Andres Ordonez, chief creative officer at Energy BBDO, a part of international advertising titan BBDO Worldwide, echoed that idea.
“We’re working as a brand on a responsibility that we have going beyond just giving a service,” Ordonez told HHCN.
While Home Instead has not worked with Energy BBDO in the past, the home care franchise company and advertising agency plan to further highlight the value of home care in “many stories” still to come, Cox said. The full “The Third Stair” video is available online. Shorter national television spots have appeared on strategically chosen networks — including on HGTV, A&E, USA Network and the Hallmark Channel — since Oct. 15.
Cox declined to comment on the cost to produce the video or on Home Instead’s media budget.
Home Instead isn’t the only senior care company to pursue ambitious advertising projects with strong storytelling components.
BBDO Worldwide is widely regarded as one of the most creative agencies in the advertising business, garnering awards such as Network of the Year at the 2018 Cannes Lions International Festival of Creativity.
Energy BBDO, in particular, is known for its storytelling skill.
“We’re recognized for creativity and effectiveness,” Ordonez said. “And we believe in the power of storytelling and innovative experiences.”
Other prominent work from Energy BBDO includes the love story “Sarah & Juan” for Extra Gum, which has tallied more than 110 million YouTube views and was one of the most watched YouTube videos of 2015. “The Story of Lucy,” the tale of a father’s love for a daughter, is another well-known spot. It was produced for Windex.
Energy BBDO “works pretty much everywhere” and “across every category,” including in the health and wellness spaces, Ordonez said. Home Instead’s “The Third Stair” is Energy BBDO’s first foray into home care, however.
That’s likely to change as demand for home care services continues to grow.
“What makes your home your home? We all have something,” Ordonez said. “We all have this thing that connects us back and reminds us of the beautiful moments. What we want to do is tell those stories because they have so much magic and power.”
Amazon’s $15 Minimum Wage Turns Up the Heat on Home Care Providers
By Robert Holly | October 3, 2018
Online retail giant Amazon (Nasdaq: AMZN) has turned up the heat on U.S. home care agencies in the battle to attract and retain workers.
Amazon has pledged to increase its minimum wage to $15 for all full-time, part-time, temporary and seasonal employees, regardless of where they work or what their position is, starting next month. The Seattle-based company, which is still in the midst of finding a home for its new $5 billion second headquarters, announced the move Tuesday.
Faced with a caregiver shortage, tight labor markets and wages that have already risen in many markets, home health and private duty providers are struggling with workforce challenges. Even prior to Tuesday’s announcement, Amazon had become a direct competitor, drawing away potential caregivers to its massive fulfillment centers across the country.
“We are seeing it in Maryland, where we operate company-owned offices and franchises,” Mike Magid, COO of Griswold Home Care, told Home Health Care News last February. “They’re offering sign-on bonuses and a good starting hourly rate, promising overtime.”
More than 250,000 Amazon employees and over 100,000 seasonal employees who work during holidays would be affected by the new $15 minimum wage hike, according to the company. Jeff Bezos, Amazon’s founder and CEO, described the increase as a way for his company to lead in nationwide efforts in securing higher compensation for traditionally low-wage workers.
The federal minimum wage is currently set at $7.25. State laws vary, with some states — California, Massachusetts and Washington — setting minimum wages at or above $11.
“We listened to our critics, thought hard about what we wanted to do, and decided we want to lead,” Bezos said in a statement. “We’re excited about this change and encourage our competitors and other large employers to join us.”
One of those critics has been Vermont Senator Bernie Sanders, who recently introduced a bill to tax companies if their workers are on public assistance programs such as food stamps, as is the case with some Amazon fulfillment center employees.
Sanders’ bill was known as the Stop BEZOS Act.
Home care likely to take a hit
The home care industry faces several regulatory and economic pressures, but most agencies cite staffing as their biggest concern, punctuated by crippling turnover rates that hover in the 40% to 60% range. One of the most common reasons worker leave home care agencies, experts say, is compensation.
Although her organization “adamantly supports the raising of minimum wages,” Hayley Gleason, interim executive director of the Massachusetts-based Home Care Aide Council, said Amazon’s new $15 standard may exacerbate those difficulties.
The Home Care Aide Council — formerly the Massachusetts Council for Home Care Aide Services — is a not-for-profit trade association that promotes home care aides and the services they provide.
“With a thriving economy and rising wages, the competition for workers is intense,” Gleason told Home Health Care News. “In an industry that relies heavily on government funding and rates that have remained stagnant, it is exceptionally challenging for home care agencies to remain competitive with other industries.”
As more companies follow Amazon’s lead, agencies will likely continue to lag behind, adding to a workforce shortage that already exists and will only get worse as demand for in-home care skyrockets, she said.
Even if agencies aren’t aware of it, Amazon’s presence in certain markets has already possibly impacted their staffing levels. The online retailer’s presence in certain markets has contributed to 10% of area caregivers having interviewed or worked for the company, according to a 2018 report from myCNAjobs.com, a Chicago-based recruitment platform for senior care workers.
As of early this year, Amazon operated more than 200 facilities nationally, regularly holding hiring events recruiting tens of thousands of people in a single day, according to myCNAjobs.
“Home care aides are critical to the provision of care to the millions of elders and individuals with disabilities that want to remain in the community,” Gleason said. “Agencies must be able to provide their workforce with a competitive, living wage to draw new individuals into the field and retain those who hold these important jobs.”
Several home care agencies have taken creative approaches to slash their turnover rates and keep workers. Major franchisorSenior Helpers, for instance, has strategically tried to create “caregiving ladders,” or ways for caregivers to advance their careers through added expertise.
Along those same lines, other agencies — including Interim HealthCare, Right at Home and Cypress HomeCare Solutions — have launched dementia-focused training programs for caregivers. Caregivers who have completed Cypress’ dementia program typically have turnover rates that are lower than non-program peers, according to the Phoenix company.
Amazon turns attention to D.C.
Despite creative solutions, Amazon has another edge over home care agencies in terms of scheduling, as home care workers often deal with unsteady and stressful hours.
Plus, in addition to higher wages, Amazon also offers its global workforce of 575,000 employees a strong benefits package, which includes comprehensive health care, company-paid life insurance, 401k matching and up to 20 weeks of paid parental leave.
The $15 minimum wage increase includes Whole Foods workers and those in other Amazon subsidiaries.
Along with its U.S. wage hike, Amazon’s public policy branch will likewise turn its attention to Capitol Hill and begin advocating for an increase in the federal minimum wage, according to company leadership.
“The current rate of $7.25 was set nearly a decade ago,” Jay Carney, senior vice president of Amazon’s global corporate affairs department. “We intend to advocate for a minimum wage increase that will have a profound impact on the lives of tens of millions of people and families across this country.”
Amazon’s market capitalization passed $1 trillion in September, and Bezos is now seen as the wealthiest person in the world, followed by Bill Gates and Warren Buffett, according to the Bloomberg Billionaires Index.
The minimum wage increase is set to go into effect on Nov. 1.
Non-skilled in-home care services will be allowed as a supplemental benefit for Medicare Advantage (MA) plans in 2019, the Centers for Medicare & Medicaid Services (CMS) announced in a final rule issued Monday.
The benefit marks the first time CMS has allowed supplemental benefits that include daily maintenance in Medicare Advantage.
“CMS is expanding the definition of ‘primarily health-related,” the agency stated in its announcement. “Under the new definition, the agency will allow supplemental benefits if they compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization.”
The rule was originally proposed in February and was met with enthusiasm from the home health and private duty home care industries. Home health care providers have already made great strides as partners in MA contracts, and adding non-skilled services opens the door to the growing MA population even further.
In 2015, 35% of Medicare beneficiaries were participants in MA, according to CMS data. And that figure is expected to grow quickly over the next several years.
Home care providers are not the only ones welcoming this change, as many also believe MA payors are ready and willing to pay for non-skilled in-home care services.
“The Medicare Advantage plans have a very different payment environment [than fee-for-service],” Tracy Moorehead, CEO of industry group ElevatingHome, told Home Health Care News at the association’s National Leadership Conference in March. “They have greater flexibilities than the fee-for-service providers do. They don’t have a homebound requirement in many cases. So they are tasked with full capitation, where they have an amount they are provided [with] to care for a patient and they will do whatever they need to make sure that patient doesn’t cost them more money than necessary. And if that [includes] private duty services, then I’m sure a plan is more than ready to pay for that.”
In fact, insurers and payors have been positioning themselves to better align with post-acute care services for years. As the focus also shifts toward the high-cost, high-needs dual-eligible patient populations of people who qualify for both Medicare and Medicaid, that has provided additional incentive to cover personal care services as well.
Even before today’s final rule, some providers have been positioning themselves to take on more personal care, with an eye toward MA trends.
“What Humana, UnitedHealthcare, and Aetna have been saying for several years is that we’ve had a great relationship for skilled home health and hospice for quite a while,” Keith Myers, CEO of LHC Group (Nasdaq: LHCG), told HHCN. “In the last few years, they’re starting to focus more on dual-eligible population and have needed us to have a bigger commitment in personal services.”
With the merger of Almost Family closed as of April 1, LHC Group sees itself as having a big advantage to add in-home care supports to its MA contracts.
“[With] Almost Family, many people don’t know that they started 40 years ago as a personal care services business,” Myers said. “So they have a long history of personal care services and are second to no one with recruiting, retention and managing those type of employees. We want to leverage that.”
Access the full rate announcement and call letter here.