3 Ways to Increase Revenue in Home Health and Hospice

Given the recent inadequate reimbursement trends in Medicare, most home health and hospice organizations are finding that they need to grow their top lines to maintain the current level of profitability. There are three classic ways to increase revenue:

  1. Increase the number of customers
  2. Increase the revenue per transaction with each customer
  3. Increase the frequency of transactions with each customer.

This article discusses how each of these concepts can be applied to home health and hospice to help you increase your organization’s revenue.

  1. Increase the Number of Customers

    As we discussed in a previous feature article, home health and hospice firms need to do more than compete with other agencies for market share to succeed in today’s competitive environment. An important way to do that is by adopting a Blue Ocean Strategy, which involves creating new market niches that offer opportunities for growth. Here are some examples of Blue Ocean Strategies that can help you increase customer numbers:

    • Take market share by differentiating your firm. How can you set your home health or hospice firm apart from other providers in the eyes of your clients and referral sources? To answer that question, you need to take a look at the patient needs in your service area and what your competitors are currently offering. The implementation of a telemedicine program, for example, is a way some home health and hospice firms are successfully differentiating their businesses today.
    • Find new customers for home health and hospice.
      Two possible ways to increase home health customers include:

      • Approach hospitals with low referral levels and help them identify patients at the time of discharge who could benefit from home health services.
      • Develop clinical programs that address the specific needs of chronic “homebound” patients.

      For hospices, inpatient beds at hospitals in your service area may offer significant opportunity for increasing your customer numbers. Click here to learn how you can use hospital-specific data to calculate potential hospice inpatient days.

    • Expand into new markets. Targeting marketing efforts on underserved population segments is one expansion strategy frequently overlooked by home health and hospice firms. Because usage levels of home health and hospice by non-white ethnic groups in the United States have been historically low, this strategy may provide a great opportunity for growth in your service area. Click here for a step-by-step method for identifying the underserved segments in your market, as well as examples of ways to attract more patients from these segments.
    • Diversify by entering a new geographic market. But is geographic diversification right for your home health or hospice? That depends largely on the market’s maturity and competitiveness levels. Click here for a diversification model that can help you determine if geographic diversification is a viable option for your organization.
  2. Increase Revenue per Transaction with Each Customer

    In addition to growing your customer base, increasing the number of transactions with individual customers is another way to boost your organization’s overall revenue.

    For Hospices:

    • Expand your hospice’s focus to include non-cancer patients, since they tend to have longer lengths of stay. This would involve marketing to referral sources for patients with such terminal conditions as dementia and heart disease.
    • Increase awareness of hospice within the community, which can help lead to hospice referrals earlier in the disease process.
    • Promote hospital inpatient hospice services to physicians and the local community.

    For Home Health:

    • Reduce the percentage of cases with Low Utilization Payment Adjustments (LUPAs). Click here for several important ways to help you improve the management of Medicare patients subject to LUPA and increase your organization’s revenue per transaction.
    • Eliminate “missed” visits by improving internal operational procedures.
    • Shy away from patients who are strong LUPA candidates, such as same-day surgeries, mental health diagnoses, B12 shots, and catheter changes.
    • Target your marketing efforts on patients who tend to have higher average case weight, such as orthopedic cases.
    • Assure that patient assessment is accurate. You can accomplish this by better educating your clinical staff and using artificial intelligence capability to hard test each assessment.
  3. Increase the Frequency of Transactions with Each Customer

    This concept is not relevant for hospices; however, it can be a very effective way for home health organizations to boost their revenue. How can your home health firm increase the frequency of your customer transactions? By increasing the number of home health admissions that have more than one episode. Here are two ways to do just that:

    • Focus your marketing on patients with chronic conditions, such as congestive heart failure and diabetes. Keep in mind that these types of patients are more likely to come from the community, rather than as part of a post-hospitalization recovery.
    • Train staff not to discharge too quickly. In other words, stress the importance of continuing home health care when opportunities to improve a patient’s quality of life still exist.

Do you need help in developing and implementing an effective strategy for increasing your organization’s revenue? Click here or give us a call at 215-657-7373 today for information about how Healthcare Market Resources can help.