Debunking the hospital home health referral myth

By Stephen Tweed, CSP

As I speak at home health care association conferences and corporate meetings across the US, I frequently hear the complaint from free standing agencies that the hospitals in their local marketplace have their own home health agency, and that "all the patients go to the hospital's own agency."  Based on my experience with hospital based agencies, including being the interim President and CEO of a very large home health agency that was a department of a hospital, I have always questioned that complaint.

Some time ago, I was working with a hospital based agency and we conducted some focus groups with discharge planners in their system hospitals.  I was surprised how little these discharge planners really knew about their own home health agency, and what their hospital was doing to reduce readmissions and length of stay. These discharge planners and their supervisor were adamant about providing patients freedom of choice, and giving them a list of other agencies in the local marketplace

Despite this frequent complaint across the industry, we did not have any data to know what the real facts are.  Now we do!

Rich Chesney and his team at Healthcare Market Resources have conducted a study of 2009 Medicare data to examine the specific home health agencies that each patient went to from each hospital.  He was able to identify "high market share hospitals" in each state.  Rich defines "high market share hospitals" as those hospitals "which refer to a dominant home health agency. A dominant home health agency is defined as an agency which receives 70 % or more of business from that hospital during the given year."

You can see the list of states and what percent of hospitals fall into this category. You can also get a report that is specific to your local marketplace, showing the hospitals, and the dominant home health agencies to which they refer.

As many of you know, I'm a bit of a data junky, and I like to make strategic decisions based on good information supported by data. I've found that the data provided by Healthcare Market Resources to be a very valuable tool to help you in your home health and hospice strategic business planning process.

Take a look.  Then let us know what you think.