Dresher, PA – Healthcare Market Resources, a leading provider of custom market data for hospices and home health agencies, conducted an in-depth study on hospice utilization, examining data from the years 2002-2008.
Their analysis or “snapshot” of the hospice industry during this timeframe revealed that while the first 6 years were characterized by robust growth and increased utilization, in year seven, this growth came to a screeching halt.
According to the National Hospice and Palliative Care Organization, the number of patients using hospice services grew by 100% from 2002 to 2007. Medicare utilization of these services saw a growth of 47% during that same timeframe. However, hospice utilization nationwide declined by 1% from 2007 to 2008.
Remarkably, in that last year, statistics revealed that seven out of 10 states that garnered positions at the top of the hospice utilization list with 57% growth during 2002-2007, were virtually flat in the final year of the study, 2007-2008. The numbers invite us to ask, have some hospices reached the limit or a ceiling?
No state was immune to this trend. Even the 10 fastest growing states in Medicare hospice utilization saw their utilization drop to 2.0% growth in 2008, compared to their vigorous 136% growth rate or 26.6% annual growth during 2002-2007.
“When you have such a high number of states that have stalled or experienced a decline in growth rate, I believe we may have reached a barrier in some markets above which you can’t go,” explained Rich Chesney, CEO of Healthcare Market Resources.
Many states were riding on a success curve that appears to have flat lined in the year 2007- 2008, leaving them with minimal increases in utilization rates. States such as Nevada and Maryland, for example, experienced high utilization rates in the years 2002-2006, yet in 2007-2008, their rate of change from the year before was just .06%.
With some hospices even experiencing declines in volume, healthcare executives have to begin to utilize these statistics as benchmarks when carving out future strategies.
“The growth curve has bent quite quickly and dramatically across the country, and with death rates falling and medicine improving, the pool of hospice candidates could actually drop,” Chesney remarked.
The 2007-2008 change in hospice utilization by state can be found in a map at www.healthmr.com/hospiceutilizationmap. A state-by-state view of hospice utilization growth rates during Healthcare Market Resources’ 7-year data analysis is also available by opting in on the Web site at www.healthmr.com.
Healthcare Market Resources’ data provides a means for hospices to assess their local market utilization and determine if it mirrors their statewide stats.
“If you are in one of those states that exhibited tremendous growth during that timeframe, you may find yourselves very vulnerable now as you wrestle in a market that penetration has maxed out,” Chesney said.
The picture may even be less rosy for hospice markets as Washington carves out health reform initiatives that decrease reimbursement.
A review of the Healthcare Market Resources reports may reveal that the “grass” just over the proverbial fence may in fact be greener, and a hospice could opt to expand services in a nearby geographic location with lower utilization rates.
Yet, Chesney cautions that today’s hospice environment warrants new strategies.
“It is like reading a financial prospectus: past performance does not ensure future growth,” Chesney explained. “The bloom is coming off the rose and hospices cannot assume that they can sustain their existing growth rate.”
Expansion alone into a neighboring geographic location may not prove to afford opportunities for a higher growth rate.
Hospices who find themselves in this scenario may want to explore an expansion of their service line to differentiate themselves from their competition. Adding complementary areas of business can offset a decline in traditional utilization rates.
“Given this scenario, hospices find themselves challenged with letting go of old notions that the solution lies in growing their way out of the situation,” Chesney comments.
Realizing growth in today’s market has gotten much more difficult, and data is needed to make better decisions. Knowledge of growth and utilization patterns enable hospices to better anticipate trends in order to plan future strategies. An examination of the state-by-state utilization will reveal the implications for your local market.
About Healthcare Market Resources
Healthcare Market Resources, Inc., a leading provider of reliable data, enables home health agencies and hospices to make market decisions based on data and not perceptions. Its customized local market reports give healthcare executives a competitive edge for business development and strategic planning initiatives. www.healthmr.com
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