Drive Home Health Sales with These 3 Key Account Management Changes

Key account dynamics for home health agencies is on the verge of major change. Thanks to pressures on hospitals caused by today’s proposed healthcare reform movement, the individuals you are selling to and the primary benefits used for selecting your agency will no longer be the same. This article discusses new Medicare proposed reimbursement rules, plus 3 important changes you should consider in developing your key account strategy for 2010 and beyond.

New Medicare Reimbursement Rules:
Changing the Way Home Health Agencies Sell to Hospitals
The relationship between home health agencies and hospitals is undergoing significant change. A primary driver for this change is new proposed legislation, which is likely to be part of the healthcare reform effort. Starting in fiscal year 2013—according to the summary text of the Baucus Health Care Bill —hospitals with readmission rates above a certain threshold would have payments for the original hospitalization reduced by:

  • 20%—if a patient with a selected condition is rehospitalized with a preventable readmission within 7 days.
  • 10%—if a patient with a selected condition is rehospitalized with a preventable readmission within 15 days.

For these readmission penalties, the Secretary of Health and Human Services will choose 8 clinical conditions with the most financial impact. Heart attack, heart failure, and pneumonia are likely to be included in the group, for example, since reporting on readmission rates for them already began in July 2009.

These new Medicare reimbursement regulations are designed as an incentive for hospitals to help reduce avoidable readmissions. Additionally, the Centers for Medicare and Medicaid Services (CMS) has listed several evidence-based interventions in its publications that can help prevent readmissions including:

  • Discharge to a proper setting of care
  • Timely follow-up visits with physicians
  • Clear discharge and medication management instructions.

Key Account Management Changes for Your Home Health
As a result of this proposed Medicare legislation, you’ll find that hospital administrators’ perception of home health is evolving. Until now, home health was typically viewed as a “commodity service.” In other words, all home health agencies were considered the same. Now with hospitals facing the threat of greater financial penalties for readmissions of Medicare patients, it will become more important for home health agencies to differentiate themselves and their services.

As you look for new strategies to drive your home health sales, you should consider the following account management changes:

1. The Key Decision Makers – or “Buyers” – Will Change.
You’ll find that vendor selection of home health by hospitals will shift from discharge planners to more senior hospital management. The new “buyers,” for example, will include chief nursing officers and chief financial officers. As the stakes for readmission of Medicare patients increase, so will the importance of home health, requiring a more sophisticated sale on the part of home health agencies.

2. Your Value Proposition to “Buyers” Will Change.
No longer will hospital administrators view home health agencies’ primary value as helping them get patients out of the hospital on time to reduce additional unpaid bed days. Rather, minimizing readmissions will become your new value proposition. That means you’ll need to show hospitals that you can help them minimize readmissions and avoid the new more severe consequences – additional unpaid bed days, plus financial penalties for readmissions.

3. Your Measurements of Success Will Change.
You’ll likely find that developing personal relationships with your “buyers” will take a back seat to demonstrating measurable results. In addition to showing hospital administrators that your home health staffing is adequate (a current key vendor requirement), you’ll also now need to demonstrate you have a program in place that prevents readmissions, such as telemonitoring.

Healthcare Market Resources Can Help Your Agency Drive Sales
Healthcare Market Resources can provide you with crucial data to help sell your home health services in today’s changing environment. With our data, you can share the key information hospital administrators need to help determine the optimum percentage of patients who should be discharged to home care versus self-care to minimize the risk of readmission. In Healthcare Market Resources’ Medicare Hospital Discharges by DRG Report, [link to http://www.healthmr.com/our-reports/home-health#medicarehospitaldischargesdrg] for example, you’ll find the following statistics, which are identified by facility:

  • The number of patients who are discharged with the 3 DRG sets most likely to be included in the proposed legislative change: heart failure, pneumonia, or heart attack.
  • How many of these patients are discharged to home care or self-care.
  • The “best practices” for nationwide hospital discharge, against which local hospital performances can be benchmarked. After studying more than 3,000 acute care hospitals nationwide, Healthcare Market Resources identified the top 10% (the “best performers”) to determine the best-practices statistics.

Every hospital has a unique situation in terms of discharge patterns and patient mix. With Healthcare Market Resources’ data, you can help them realize just how significant their opportunity is for reducing the risk of readmissions.

Click on the following links for sample reports, as well as a previous newsletter article that illustrates an example of how to use the data provided in our reports:

Click here or give us a call at 215-657-7373 for more information about how Healthcare Market Resources can help your agency develop an effective key account strategy and drive home health sales.