Home health market responds to aging population

Jason Kaplan
Dr. Phillip Dove examines 95-year-old Dorothea Preston's feet at her home in SE Portland.

Partnerships between providers and insurers aim to make home health care affordable.

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Lucille Blende represents the new age of old age.

At 96, Blende is homebound due to severe arthritis and related chronic medical conditions. She almost never leaves her motor home in Tigard. When she told her primary care physician she could no longer make it to the clinic for medical care, her primary care physician connected her to Housecall Providers, a Portland medical practice that only makes home medical visits.

Her new doctor, Rachel Prusak, a family nurse practitioner, visits her at least monthly,and a social worker comes by more often to check in on Blende. “I’ve been real pleased with the service,”she says. ”They’re tops!”


Blende is typical of a fast-growing segment of the U.S. population: older patients with multiple chronic diagnoses who are either permanently homebound or can only visit a clinic with great difficulty. It is the costliest segment of the population to provide medical care for, and the riskiest to insure.

That’s largely because they only get medical care in a crisis —when they have to be transported to the emergency room, or hospitalized for an advanced illness. Experts agree that 5% of the Medicare population —the sickest of the sick —is responsible for 50% of the cost of care for all those covered, because they do not get regular medical care.



And that 5% is about to drastically increase, as millions of Baby Boomers become eligible for Medicare and Medicaid. This bulge is known as the Silver Tsunami, and it’s a terrifying prospect both for the federal healthcare insurers and private insurers that offer Medicare Advantage Plan coverage to seniors.

By 2050, an estimated additional 40 million Americans will be added to Medicare’s ranks compared to today. The cost of caring for them —and the 5% in particular — could easily bankrupt the insurance system if nothing changes.

Private sector solutions

When the doctor has to go to the patient’s home, the existing financial model for health care —fee for service —breaks down. A 20-minute consult with a physician in a clinic becomes a 90-minute or longer house call.

Many elderly chronically ill patients are handicapped, either mentally or physically, and can’t easily describe what’s going on with them. 

In the meantime, insurers get hammered by these patients because they generally only receive medical care when they wind up in the ER or hospital, where costs can spiral out of control. (Hospitals also suffer because they often can’t collect for services rendered.)

Fee for service models are based on volume alone, says Terri Hobbs, former executive director of Housecall Providers.

The solution, she says, is to substitute “value-based care,”a form of care based on quality and outcomes.  

“It’s about cost and quality on a given population, in this case one with multiple chronic diagnoses who can’t get to a clinic for checkups,” Hobbs says. “It’s the triple aim: better care, better quality and lower cost. The extra cost of providing this care at home is balanced by the insurance money saved by managing patients this way.”

In recent years, a number of insurer/medical practice alliances have appeared in the Portland area to serve the home health population with value-based models.

The partnerships operating here in Portland, already a pioneer in home health, demonstrate the private sector’s response to a national issue that government has failed to address. The gridlock in Washington, D.C. over healthcare reform has dashed any hopes that the federal government might find a solution to insuring and caring for the Silver Tsunami population.

Because of the urgency on the part of insurers, this private sector focus on managing the cost of care of this population will likely lead to a new care mode lin the U.S., one that is no longer dependent upon the brick-and-mortar clinic system that dominates medical care today. 

Bob Baretta: The ideal patient

Five years ago, Bob Baretta was the patient no insurance company wanted to cover. Today, everybody wants to insure and care for him. He’s the ideal 5% patient.

Baretta, in his 80s, has been diagnosed with 10 chronic conditions, including Crohn’s Disease and congestive heart failure. He takes about eight pills daily for his disorders, and before he began receiving quality care where he lives, he made regular trips to the emergency room and hospital when things went haywire. 

Now he lives in an assisted living facility in Tualatin, Marquis Tualatin Assisted Living, where he’s right in the middle of an innovative insurer/medical service partnership. Marquis Companies owns and operates 26 care facilities of varying types, from the fully integrated community where Baretta lives to acute care, assisted living and long-term care facilities. The facilities have nurses on staff.

But, until a year ago, Marquis’ mission was to house elderly and chronically ill people. Someone else handled the medical care and insurance.

Then Phil Fogg, Marquis’ president, had an idea: Why not offer our own insurance coverage and medical care to our residents? We know these people and we know what they need.

Fogg launched a Medicare Advantage plan, AgeRight Advantage, intended initially for Marquis residents. Any resident who chose AgeRight as their insurer also had 24/7 access to an onsite Nurse Practitioner employed by the company. Residents can remain with their existing primary care physician; the Nurse Practitioner coordinates care with the patient’s primary care physician. 

The idea behind AgeRight was simple, explains Lindsey Schaub, manager, provider and member engagement for AgeRight. Marquis already knew how to manage the daily housing needs of its residents. Why not take the next step and manage their health — and get the revenue for their insurance coverage as well?

Fogg’s brainstorm ignited a lively competition within Marquis buildings for patients. In less than a year, 30 of 130 Tualatin residents have switched to AgeRight. The goal, says Schaub, is to have 100% AgeRight coverage in every Marquis building. 

“And they come here, even in the middle of the night, to help me.” — Dorothea Preston

But AgeRight isn’t limiting its marketing campaign to Marquis buildings. Already, AgeRight has made inroads among patients at four Portland area facilities managed by Frontier Management, which operates assisted living facilities in 10 states.

“It’s a pretty easy sell,” Schaub says. “We have a full time nurse practitioner on site at every facility where we have clients. The Nurse Practioner’s patient load is capped at 80 residents. They have access to the nurse practitioner whenever needed, and they keep their original primary care physician. But they don’t have to leave the facility to have the benefits of our medical team.”


Another approach is being tested by insurer HealthNet, which has established a financial arrangement in which it shares the savings realized from home medicine with Landmark, a provider of such services.

Landmark is a national home medical service based in California that contracts with insurers to provide doctors, nurse practitioners and others to visit patients in their residences. Its mission is to offer limited home-care medical services in partnership with insurers to make sure patients like Dorothea Preston, 95, have regular checkups at home. Such checkups have been proven to reduce costly ER and hospital visits.

Preston spends most of her time in her apartment off her son and daughter-in-law’s house in East Portland. She has multiple chronic conditions, including macular degeneration. As her conditions worsened, she was making fewer trips to her medical clinic, and more urgent trips to the ER and hospital. Twenty months ago, she signed up for home medical care with Landmark through her insurer, HealthNet.

She hasn’t made a single trip to the ER or hospital since then, she says. During a recent check-up with Landmark’s Dr. Phillip Dove, she says Landmark’s home-based care has helped her avoid “at least three or four times when I would have gone to the ER.”

Now, when she feels a health crisis coming on, she or a family member calls Landmark. “And they come here, even in the middle of the night, to help me.” 

Dove, who pays hour-long check-up visits to Preston at least once a month, is not her primary care physician, but he does coordinate care with her PCP. “We don’t replace the patient’s primary care physician,” he says. “We’re an additional to their care team. You can find out so much more about someone’s health by visiting their home. It makes a huge difference.”

HealthNet and Landmark are banking on that difference. Landmark provides services to about 2,900 people insured by HealthNet in the Portland area, all of whom have at least five or more chronic health conditions. Any coverage cost savings that result from Landmark’s work, compared to the cost of care for a similar Medicare group not managed by Landmark, are shared by the parties. (They would not divulge details of the split.) 

Dove says he can see six or seven patients a day. Not only does he spend more time with each patient than he did when he worked in a clinic, but he must drive from one patient to another — time that no insurer is willing to pay for. His contract with Landmark ensures that he can make a reasonable wage.

Housecall Providers and CareOregon

Due to the difficulties of making ends meet serving homebound patients, Housecall Providers gave up its independence this year after 20 years of going it alone. It agreed to be acquired by CareOregon, a Portland-based insurer that, like Housecall Providers, was formed as a nonprofit. 

“We shared the same mission,” Hobbs says of CareOregon. “With their greater resources, Housecall Providers can be competitive.”

New executive director Rebecca Ramsay, says the parent company expects Housecall Providers to be sustainable within the next few years.

Wrapping around clients

Providence Health & Services has been serving patients where they live for years and has gradually grown its home medical care practice. Providence and Housecall Providers each provide primary care practitioner services to about 1,500 homebound patients, the largest PCP patient count of any of the practices. They both offer additional “wraparound” services — social workers, spiritual counselors, mental health professionals — and each operates palliative care and hospice services.

To compete more effectively for high-end Medicare patients, Providence has gone beyond the wrap-around basics with its Optimal Aging service. Optimal Aging connects the homebound with contractors who prepare meals to order for clients, clean houses, do minor home repairs and drive them to appointments or on errands. The program isn’t covered by insurance, so the clients have to pay out of pocket for the services.

But, says Optimal Aging Director Marika Rausa, 100 people in the Portland area signed up for the service after it was available in April “because these kinds of services keep people in their homes. Minor home maintenance, transportation, meal preparation — these are the core reasons seniors move out of their homes.

Elder At Home differs from other models in operation here because Providence is both the insurance and medical services provider. Currently, the only patients covered by Providence Medicare Advantage insurance who can access Elder At Home services are those recommended by the insurance side of the business.

This is somewhat controversial internally. Providence medical staff have reportedly complained that doctors, not insurers, should say who needs in-home care.

Providence says that, while the initial recommendation comes from the insurance company, the primary care physician reviews patient referrals and either confirms or rejects them based upon their knowledge of the patient.

“One of the backbones of the Elder At Home program is using the Providence Health Plan data to initially identify a possible participant. However,  knowing data isn’t information, we use the [primary care physician] to validate and approve the member’s participation.  The last step is the patient also has the step of saying yes, or no, to the program,” says Ruth Johanson, Providence’s director of strategic management services.

Even Providence, the largest healthcare provider in Oregon, is challenged by the financial constraints imposed on those who practice in-home medicine.

James Arp, Chief Executive Home and Community Services, for Providence Health & Services in Oregon, is confident a new financial model will emerge that recognizes the value of providing home-based services.

“We are driving a definite shift from fee-for-service to fee-for value, and our home-based service programs are a key enabler of our movement toward providing value-based care for people who choose Providence,” he says.

Labor shortage

As these new models move forward, many face an acute shortage of medical personnel trained to treat the five percenters.

Most home-medical care practitioners take a big hit financially when they choose this career track. Sources familiar with the salaries of clinic-based and home-based PCPs say home-based practitioners earn about two-thirds of what a clinical primary care physician earns.

“It is unfair for the house call visit to be reimbursed the same way as a clinic appointment is. It is not sustainable.” — Nengliang Yao


The same MD who earns $150,000 working at a clinic might make $100,000 making home medical visits. That clinic-based MD might see 25-30 patients a day. The home-based clinician might see eight on a good day.

Medical school programs are slowly beginning to emerge that address home-based medical care, including one at the Oregon Health & Sciences University that pairs students with homebound patients. The American Academy of Home Care Medicine has had success in encouraging universities to offer home-based care curricula, and the Home Centered Care Institute (HCCI), a Schaumburg, IL-not-for-profit, offers training programs for medical professionals preparing for an in-home care career.

But the game-changer would be the death of the fee-for-service payment system that incentivizes volume over outcomes andfails to take into account patient wishes — in particular, where they want to receive their medical care.

“The major challenge [to expanding home medical services] remains the payment model, fee for service pay,” says Nengliang Yao, assistant professor, University of Virginia School of Medicine.

Yao is the co-author of “Geographic Concentration of Home-based Medical Care Providers,” a study that found that Portland is one of the few home-based medical care “hot spots” on the West Coast. “It is unfair for the house call visit to be reimbursed the same way as a clinic appointment is. It is not sustainable.”

Housecall Providers founder Benneth Husted looks back two decades, when she carried her little black medical bag to shut-ins in homes all over the Portland area,and acknowledges the progress that has been made. Yes, she agrees, more needs to be done. Too many elderly, sick individuals are slowly dying without medical care or dignity.

“But it is better than it used to be for these patients,” she says. “I will have succeeded when home medical care is just an accepted part of every medical practice. That’s the direction it’s moving in.”

Correction appended: Correction: A previous version of this article misstated the profile of HealthNet clients that are eligible for Landmark home health medical services. Not all are elderly, but all have at least five chronic health condition diagnoses.