Now that spring has come – at least according to the calendar – it’s a great time to scrub the floors, open the windows and let the fresh air in. But if you work in the home health industry, it’s also an opportune time to reassess your agency’s budget and strategic priorities. The seasons aren’t the only things changing – so is home health spending.
Recent findings from the Centers for Medicare & Medicaid Services Office of the Actuary predicts that home health spending will increase 6.7 percent by 2020, which is a higher growth rate than any other health care category, Home Health Care News reported. With spending set to compound over the next several years, HHAs should consider their future growth and resource needs today.
Let’s take a closer look at changing spending patterns in the home health industry and what they mean for your agency:
A growing market
In addition to the 6.7 percent annual growth rate between now and 2020, the Office of the Actuary forecasted that home health spending will rise to $103 billion this year alone, representing a growth rate of 5.9 percent compared to 2017. Furthermore, industry spending is expected to increase to $173 billion by 2026.
It’s not just home health investment that is increasing, however, but total health care expenditure across the board. CMS predicts national health spending will display a 5.5 percent annual growth rate between 2017 and 2026, rising to a total spend of $5.7 trillion by 2026. This follows 4.3 percent spending growth in overall health care in 2016.
Medicare and Medicaid spending in particular will also see an increase, rising 7.4 percent and 5.8 percent annually per year by 2026. Expenditures in these categories have already kicked off their forward momentum, with Medicaid spending growth anticipated to jump to 6.9 percent this year from the modest 2.9 percent growth seen in 2017.
Why the increases?
There are a number of factors that industry analysts attributed to the rise in home health spending. One main reason is an aging population – researchers say 20 percent of U.S. citizens will be age 65 and older by 2030, according to the Census Bureau. By 2050, there will be 83.7 million people age 65 and older, nearly double the amount in 2012.
The CMS Office of the Actuary cites higher incomes and more expensive medical goods and services as other reasons for the spending growth.
So what do all these numbers mean to you?
It’s time to invest
Your HHA needs to be able to remain competitive with fellow agencies that are all spending more of their resources to improve quality of care. There are two key steps critical to doing this.
First, your HHA needs to adopt a forward-looking approach to operations – what will you need to do now to set yourself up for success five years down the line? How will your agency capitalize on an accelerating market over the next decade, while navigating inevitable payment reform and downward pressure on reimbursement? Taking a long-term view of strategy can help you ensure the sustainability of care and remain agile.
Second, it’s time to invest in the best home health technology. With competitors enhancing their platforms, you can’t afford to skate by with a solely adequate system any longer. An innovative and responsive EMR like Thornberry’s NDoc® solution can provide your agency with the dependable technological infrastructure it needs to grow productivity and manage and administer care seamlessly and efficiently.
With home health spending surging over the next several years, you need to make sure your HHA earns part of the pie. Invest in industry-leading home health technology to remain competitive and improve your quality of care.