Grow Your Business Strategically Using the Home Health Utilization Metric
When it comes to growing your home health business, should you focus your marketing efforts on “stealing” market share from competitors or finding new sources of patients? The Home Health Utilization metric can serve as an important guide in helping you make this key marketing decision.
Home Health Utilization is the number of patients served by the Medicare home health benefit in a year divided by the number of enrollees in the Medicare fee-for-service program. This metric displayed here is calculated for each state, but also can be performed at the county level, where it may be most relevant to your organization.
Home Health Utilization Can Help Indicate Growth Opportunity
Keep in mind that what is important with the Home Health Utilization metric is not its absolute value, but rather its relative value to national and state norms. Being above or below these norms will indicate whether there is significant opportunity to find new patient sources. And as we discussed in a previous feature article on Blue Ocean strategy – “Don’t Fight for Market Share, Create New Business” – it’s much easier to find new patients than to be “bloodied” in the battle for market share.
Factors that Affect Home Health Utilization
By looking at the 2007 state-by-state Home Health Utilization, you can readily see that there is significant variation in the utilization levels among the states. This is based, in part, on historic variation in:
- Physician referral patterns
- Availability of alternative settings
- State Medicaid programs
- High prevalence of chronic disease populations.
Looking Beyond the Traditional Factors Affecting Home Health Utilization
There can be a variety of other environmental, regulatory and competitive factors that also may affect Home Health Utilization. Three states with the highest Home Health Utilization, for example, are Texas, Florida and Michigan. This could be a function of the “If you build it, they will come” phenomenon demonstrated in the movie Field of Dreams. All three of these states have seen rapid growth in the number of providers in recent years; possibly caused by competitive pressures, agencies are looking everywhere to find patients. It remains to be seen, however, if these high levels of utilization will pass regulatory muster in the future.
In contrast, the three New England states of Vermont, Massachusetts and Connecticut have experienced minimal provider growth. As a certificate-of-need (CON) state, Vermont added a single agency to its provider list in recent years, yet has relatively high usage of Medicare home health. Although Massachusetts and Connecticut are not bound by the regulatory restrictions of CON, they also have experienced little change in their provider line-up during the same time frame. Other possible factors affecting Home Health Utilization could include community awareness and the longstanding tradition of the Visiting Nurse Associations in New England.
Click here or call 215-657-7373 to learn more about the Home Health Utilization metric and ways to use the information Healthcare Market Resources provides to help your agency determine the most successful strategies for growth.